Q: How will the new Medicare drug plans work? How can I learn what my expected costs will be?
A: Medicare prescription drug plans and their costs will vary. You will be receiving more information from Medicare starting in October, but the following is how they are expected to work.
If you are enrolled in Medicare, you will be able to get the coverage in one of two ways, either through a stand-alone prescription drug plan that you can use for drug coverage with Original Medicare, or from a Medicare private plan like a Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO). The private plans offer medical and hospital benefits in addition to the drug coverage.
The monthly premium will vary between plans but the Medicare.gov web site says it should generally be about $32 in addition to any other Medicare premium you already pay. There is also an annual deductible of the first $250 per year for your prescriptions. This again is in addition to your Medicare Part A and Part B deductible.
You will pay 25% of your yearly drug costs from $251 to $2,250 and your plan will pay the other 75%. You will then pay 100% of your drug costs from $2,251 - $5,100. At that point you pay 5% of your drug costs or a small co-payment for the rest of the calendar year and your plan pays the rest. If your income is low, there is extra help for these costs.
Complicating matters, each plan will have its own list of covered drugs (or formulary). You will have to pay the full cost of the drugs that are not on your drug plan's formulary, and you will also need to fill your prescription at a pharmacy in your plan's network.
Enrollment begins November 15, 2005 and goes through May 15, 2006. It is your choice, but if you don't join when you are first eligible, you may have to pay a delayed enrollment penalty if you choose to join later.
For seniors who already have prescription drug coverage, existing programs are required to notify you this fall whether your coverage is as least as good as that being offered by Medicare.
For more information visit www.medicare.gov or call 1-800-MEDICARE (633-4227).
October 2005
