Seniors are likely to be besieged with a confusing welter of information this fall about the new Medicare prescription drug plans. Even if you already have drug insurance, starting November 15, 2005 through May 15, 2006, all Medicare recipients will need to decide whether to enroll in Medicare's new Part D drug coverage. The coverage will be available either as a part of a Medicare Advantage HMO that offers comprehensive coverage for doctors' and outpatient services as well, or as stand-alone "drug-only" coverage costing about $37 per month.
The coverage will be available through a number of private insurers and both the coverage and prices will vary. You will need to shop around to see which drug plans covers the drugs you need for the best price. All plans however, have a $250 deductible and, once that is met, Part D plans will cover 75% of drug costs up to $2,250. At that point you pay 100% of your drug costs from $2251 to $5,100 out-of-pocket. This is often referred to as "the doughnut hole." Once you have exceeded $5,100 in approved costs then the plan would cover 95% of your prescription costs.
Information to help you make a choice about Medicare Advantage and drug plans in your area will be available starting in October from the Medicare.gov web site (www.medicare.gov). You should also be able to get information from your local Area Agency on Aging.
Think very carefully before putting off signing up. You could wind up paying a penalty later should you change your mind and decide to sign up after all. Medicare will add a penalty surcharge to your premium of 1% per month for each month you delay — an extra amount you will have to pay for the rest of your life. If you think the coverage is too expensive, there's additional assistance available for those who are eligible. Seniors with incomes up to $1,197 per moth (individual) or $1,604 per month (for couples) may qualify for some level of extra financial assistance.
If you decide to delay because you already have prescription drug insurance, you may be able to avoid the penalty if you already are enrolled in a prescription drug plan that the government considers equal to or better than Medicare Part D, like drug plans for retired military or certain plans through former employers. You should get notification about whether your coverage is considered "creditable coverage" (equivalent to or better than Part D), but if you do not, play it safe; contact Medicare at 1-800-Medicare (1-800- 633-4227) and ask them if it is "creditable coverage".
If you have a Medigap prescription drug plan (H, I, or J), however, beware! This coverage will not be considered better than Medicare Part D. Should you decide to sign up for Medicare Part D later you could be hit with the penalty. In addition, industry analysts believe that the premiums for Medigap Plans H, I, and J will probably increase since insurers will no longer be allowed to sell these plans.
Watch your mail carefully in the next few months for information from the Social Security Administration and the Centers For Medicare and Medicaid Services (CMS). On the other hand, do not accept calls from telemarketers or persons going door-to-door purporting to be selling new prescription drug plans. Medicare rules do not allow insurance plans to be sold that way so you can bet that person trying to sell you a drug plan at your door is probably out to con you.
Sources: "Medicare Drug Plan Available Soon," Kimerly Lankford, Kiplinger.com, April 28, 2005. "Get Help Paying For The New Medicare Prescription Drug Benefit," Medicare Rights Center, April 26, 2005.
June 2005
