Although the choice to sign up for the new prescription drug coverage is voluntary, there's a penalty for late enrollment.  The government wants to encourage healthy people, as well as those who currently require prescriptions, to sign up as soon as possible in order to spread risk.

"Many seniors and the disabled are undecided about whether the new drug coverage will be good for them," McCutchen points out.  "But government information about the program is often incomplete, incorrect, or just incomprehensible,"[2] McCutchen declares,  "Frankly, the situation is as confused as the government's response to Hurricane Katrina - only a lot more people are affected..."

To receive the new drug coverage, Medicare beneficiaries must select a private plan and enroll during Medicare's Initial Enrollment Period, November 15, 2005 - May 15, 2006.  Beneficiaries who don't sign up for the new Medicare Part D drug benefit by May 15, 2006, will face a premium penalty of 12% of the premium per year (or 1% per month for each month enrollment was delayed) should they decide to enroll later.[3] 

While that may seem costly enough, there's more to it.  Once the deadline passes, Medicare beneficiaries won't have another chance to enroll until the next open enrollment period (from November 15 to December 31 each year).  Coverage doesn't start until the following January.  "That means beneficiaries will add at least 12% to their premiums if they miss the December deadline," explains McCutchen.  "That 12% is NOT applied to the premium of the plan they end up selecting," McCutchen continues, "but to the national average price offered by drug plans nationwide.  It makes no difference to the government whether your plan may only cost $20 per month," he says.  "If the national average cost in 2007 is $40 then the penalty is calculated on $40, and every year the penalty will grow as the national average premium grows," McCutchen explains.

"The complexity of the new drug program is unwarranted," McCutchen states.  "It's virtually impossible to access this benefit without jumping through a lot of hoops," he says.  "And that's something neither seniors nor the disabled should be expected to do."  TSCL is calling on Congress to waive the late enrollment penalty for two years or repeal it altogether, and is working with Members of Congress to simplify the program with a consumer-friendly, easy-to-use benefit.  "We urge seniors and the disabled to tell Congress, 'Simplify our drug benefit!'  Any benefit this complicated is too hard to use - and of no benefit to anyone." McCutchen says.  For more information and articles about the new Medicare Prescription Drug coverage, visit the TSCL web site at www.tscl.org.

TSCL is a national group of politically active seniors concerned about the protection of their earned Social Security, Medicare, and other retirement benefits.  TSCL members participate in a number of grassroots lobbying and public education campaigns designed to try to ensure governmental bodies, including the Social Security Administration and the Centers for Medicare and Medicaid Services, live up to their commitments. For more free information on our organization, please contact TREA Senior Citizens League, Department S609A, 909 N. Washington St., Suite 300, Alexandria, VA  22314, or visit our website at: www.tscl.org.

[1] "Official Medicare Handbook Contains Erroneous Information," Kaiser Daily Health Policy Report," October 6, 2005.
[2] "2006 Medicare and You," Centers for Medicare and Medicaid Services, October 2005.
[3] "How Much Will Enrolling Late, In a Medicare Drug Plan Costs?" Sarah Rubenstein, The Wall Street Journal Online, October 21, 2005.

Distributed by The Senior Exchange, Inc. Serving The Mature American With Timely, Low-Cost, Self-Help Information

November 2005