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Medicare Prescription Drug Plan
What you should know before signing up.
From Congressman Robert Wexler
Starting November 15, 2005, Medicare beneficiaries can begin to enroll in the Medicare Drug Benefit (Part D), which will go into effect on January 1, 2006. While I did not support the Medicare prescription drug bill because the plan does not provide sufficient coverage, I believe that all Americans must be armed with the most accurate information necessary to make an informed decision. Here is what you should know.
Who qualifies?
Anyone who has Medicare can sign up for a drug plan under Medicare Part D. The program will include a wide range of plans provided by private insurers, including managed care companies like HMOs with varying premiums. The plans will not be managed by Medicare.
However, if you have creditable prescription drug coverage, which is coverage equivalent to or better than the Medicare plan like from a former employer, union or the government (FEHBP, Veterans Administration, military, postal services other state or local government plan), you need to check with them to see if they will continue to offer their drug program. In most cases, these plans will have better coverage and you do not need to sign up for the Medicare drug program and will not be penalized for signing up for the drug program at a later date should you lose coverage.
If you are on Medicare and do not have prescription drug coverage, you have until May 15, 2006 to sign up for the program. If you do not sign up for the program, you will be penalized by getting a 1% increase in your monthly premium for each month you are late in signing up. For instance, if you are six months late, your monthly premium will go up by 6%. If you wait 2 ½ years, your monthly premium will increase by 30%.
Basic Benefit Coverage (for Individuals who do not qualify for low-income assistance)
If you do not qualify for low-income coverage, keep in mind that while plans may vary, they are required to offer at a minimum the following basic coverage:
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If your drug costs are…
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You pay…
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up to..
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Cumulative total amount out of your pocket
(Excluding monthly Part D premiums)
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$0 - $250
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100%
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$250
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$250
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$251 - $2,250
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25%
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$500
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$750
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$2,251 - $5,100
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100%
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$2,850
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$3,600
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Over $5,100
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5%
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No limit
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$3,600 plus 5% of costs above $5,100 |
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*What this table means is that you will be required to pay the first $250, which is the deductible. After that and from $251 to $2,250, the plans pay 75% and you pay 25% of the cost of the drugs. Then, from $2,251 to $5,100, you pay 100% of the cost of the drugs since most plans will pay nothing (this is referred to as the donut hole). Finally, for drug costs above $5,100, the plans pay 95% of the cost, while you pay 5%.
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Keep in mind that benefits vary from plan to plan. Some plans with higher than average premiums may have a lower deductible and cover part of the donut hole ($2,250 to $5,100). So compare plans carefully.
Individuals applying for Medicare Part D who are not receiving low-income assistance should keep the following things in mind when reviewing drug plans:
Premium - Review what monthly premiums you will be required to pay as premiums will vary. Most HMOs do not require you to pay additional premiums for Part D. You would merely pay the monthly Part B premiums, which will be $88.50 per month for 2006.
Deductible - Most standard plans have a $250 deductible; however, some plans may have a lower deductible.
Co-payment - Most plans have a 3-tiered co-payment structure. The first tier is generic drugs, followed by preferred brand-name drugs, and then non-preferred or specialty drugs.
Drug formulary - Make sure the drugs you are taking are covered by the plan you choose. If they are not, you may need to speak to your doctor to change drugs or speak to the plan provider to obtain an exemption or appeal the drug formulary. With the exception of low-income individuals who can change plans at anytime, you will only be able to change your plan once during open season.
Preferred pharmacy - You should ask about the list of participating pharmacies so that you can determine if your pharmacy is on the list or which pharmacy you will be required to visit.
To compare plans or sign up for the Medicare Part D program, you should visit www.medicare.gov or call 1-800 MEDICARE (1-800-633-4227). You can also contact the State Health Insurance Assistance Programs at 1-800-963-5337 to speak to a counselor who will be able to assist you in reviewing and choosing a plan.
Low Income Assistance
Some individuals may qualify for low-income assistance. To find out if you do, you need to contact the Social Security Administration at www.ssa.gov or call 1-800-772-1213. Your income and assets must fall below the following levels:
| Maximum Income and Assets to Qualify for Low-Income Assistance |
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Individual |
Couple |
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Income |
$14,355 |
$19,245 |
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Assets |
$11,500 |
$23,000 |
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Income based on 150% of 2005 poverty levels
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Assets do not include value of home or vehicle
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Individuals who qualify for low-income assistance are usually dual-eligible (you are on both Medicare and Medicaid), receiving Supplemental Security Income (SSI), or receiving the following benefits from Social Security: Disability Insurance or Disabled Adult Child benefits.
If you are dual-eligible, you will be automatically enrolled in a plan. However, you should check the plan’s formulary (list of drugs covered under your plan) and pharmacy to see if it is the best plan for you. If it is not, you can switch plans.
Low-income individuals who qualify for assistance will be required to pay $1 to $2 for each generic drug, $3 to $5 for brand name drugs. However, individuals who qualify for low-income assistance but have incomes that fall between $12,919 to $14,355 (for individuals) and between $17,320 to $19,245 (for couples) will be required to make a co-payment that is equal to 15% of drug costs.
If you are a Medicare beneficiary who does not have prescription drug coverage and you are not taking prescription drugs, you may want to consider signing up for the cheapest plan available. Remember, if you do not sign up by the May 15, 2006 deadline, you will be penalized when you join the program at a later date.
Useful Links:
Medicare: www.medicare.gov
Benefits Checkup Rx: https://ssl1.benefitscheckup.org/
Social Security Administration (for low income assistance): www.ssa.gov
SHINE Medicare Counselors: http://elderaffairs.state.fl.us/english/shine.html |
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