Over the past year Medicare part D plan providers have mailed an explanation of benefits statement to their members every month. These monthly statements are often looked over as a waste of time but they are very important. One of the most important times of the year that these statements are important is during the annual enrollment period. These are the statements that truly reflect the out of pocket expenses for the year when it comes to Medicare part D plans.
Explanation of benefits statements are statements that Medicare part D plans mail to members, explaining how their benefits have been used for the month. These statements will tell members what medications have been filled using their part D prescription insurance, how much their copay or coinsurance was, how much the retail price of the medication vs the negotiated price of the medication. These statements will also tell a Medicare part D member what level of coverage they are in and how much they have to spend to get to the next level of coverage.
The Usefulness of an Explanation of Benefits Statement
The open enrollment period for Medicare part D plans ends Dec. 7th. It is during this time that all Medicare part D providers are advertising their plans and trying to get members to leave their provider and join their plan. Those that are considering it should use their explanation of benefits statements as a true measure of how much their current provider is and compare it to how expensive another plan will be.
Most Medicare members will have a statement that looks the same every month because they take the same medications every month. Even with this happening, members can see the negotiated prices of medications their current plan has and can get information about the negotiated prices of another company before they switch. For people on a fixed income, this information is very important.
Budget Savings, Negotiated Prices and EOBs
When a Medicare member is on a fixed income, the costs of medications become very important. Members that have to take medications daily want to pay the lowest cost. Members that have a plan with the lowest negotiated prices on medications may stay in the initial coverage period longer, allowing them to continue paying only a copayment or coinsurance at the pharmacy. All these things are helpful to members because it allows them to predict their monthly budget.
Medicare part D members that are concerned with a monthly budget can use their explanation of benefits to monitor what has been paid over the past year, each month. There are a lot of people that are impressed by low copayments or coinsurance payments but don’t pay attention to the negotiated prices of medications. By using the monthly explanation of benefits as a standard, it’s easy for Medicare members to find the right part D plan for their budget.
An explanation of benefits is mailed to help inform members of how their benefits are being used each month. At the end of the year, an explanation of benefits can be used to find the best Medicare part D plan for their budget.