The Health Insurance Guys: His Medicare drug plan was canceled. Now what?

Dear Kyle & Alan:

I ran into an unexpected problem. Actually, it was two problems:

1. Anthem Blue Cross canceled my drug plan effective 12/31/25.

2. When I called an agent for help, I was told he didn't do drug plans anymore because the companies no longer pay their agents. Instead, I was referred to a website that I couldn't figure out. Do you guys help people with signing up for a plan?

Butch

Kyle: Yes, pretty much daily! Anyway, health insurance agents are contracted with the insurance companies and receive a commission for writing a policy. If the company doesn't pay, we're kind of stuck because California law prohibits us from collecting a fee for consulting in matters relating to health insurance. When we walk people through Medicare.gov to find a drug plan we do it for goodwill and the possibility of becoming the agent of record on the person's existing health policy.

Alan: As you can imagine, that seldom creates goodwill with the agent we're replacing!

Kyle: OK. The bottom line is that we only have 12 prescription drug plans (PDP) in Napa County. Three from Humana, two each from Blue Shield, AARP, Wellcare and HealthSpring, and one from SilverScript. The monthly premiums range from zero to $227.

Alan: I was helping one man through the process and the Wellcare plan at $104 covered his brand-name drug better than the HealthSpring at $0.

Here's how it goes: medicare.gov, health and drug plans, zip code, list the medications, choose the pharmacy, look at the list, find the best one, and…click ENROLL.

It is simple because we do it every day, but it can be a mind-bender the first few times.

Kyle: What if you just say, "The heck with it, it's too darned hard" (or the equivalent)?

Yes, the government has something for that also. It's called the Part D late-enrollment premium penalty (LEP).

Should you go 63 days without "creditable" drug coverage, you are subject to a penalty of about 38 cents per month for each month you could have had a plan but did not. The worst part of the penalty is not the amount but the fact that it adds up and never goes away. VA and Tricare are considered "creditable."

If you are on Medicare, still working, and covered under a group plan, it behooves you to verify that your group drug plan is "creditable" for purposes of Medicare Part D.

Alan: When the 12 plans pop up, it is startling to see the HealthSpring Assurance Rx at zero premium. The next two are usually Wellcare Value Script $5.70 and the other Wellcare at $6.20. A $70 and $103 premium follow. Finally, the last, and most expensive plans, are the two Blue Shield plans at $199 and $227.

I guess the best news is that the insurance "donut hole" is long gone and the maximum out-of-pocket for covered drugs in 2026 is $2,100.