Q&A: Part D premiums can vary widely

Dear Liz: Regarding Medicare, there is one more point I think you need to tell readers, and that is the high cost of Part D prescription drug coverage for people who choose original Medicare. For example, if you need just a few expensive drugs that are “Tier 3″ or higher, and coupled with the monthly fee, you can easily pay $3,000 a year or more. I am not saying original Medicare is bad. On the contrary, it gives you great freedom of health choice. However, Part D is expensive.

Answer: Part D coverage, like Medigap supplemental plans and the all-in-one Medicare Advantage plans, is offered by private insurers. Part D premiums and coverage can vary tremendously from insurer to insurer. Even with the same insurer, which drugs are covered and how they’re covered can change from year to year. That’s why it’s so important to shop around every year and to be prepared during open enrollment (which starts Oct. 15 and runs to Dec. 7) to switch to a better plan.

Your credit score may matter more than your driving record

CRO_TOC_Cover_09_2015The vast majority of auto insurers use credit information to help determine your premiums, except in the three states where it’s not allowed (California, Massachusetts and Hawaii). Credit scores don’t just matter–a new special investigation by Consumer Reports has found that sometimes your credit scores matter more than your driving record.

The researchers hired a company called Quadrant Information Services, which gathers the mathematical pricing formulas insurers have to file with the states. They used the data to create 20 hypothetical policyholders and analyzed what happened when various ratings factors were changed. In Kansas, for example, a moving violation would boost a single policyholder’s premium by $122 on average, but a good (rather than a great) credit score would increase it by $233. A bad score could drive it up by $1,3o1.

The credit scores insurers use aren’t the same as the ones lenders use, and you have no right to see the insurance scores that are being used to judge you.

The researchers get a bit off track when they imply that using credit scores discriminates against the poor, because that isn’t something that’s backed up by research. But you should have a right to see any score that’s being used to judge you, and to challenge the accuracy of the underlying information that goes into the score.