THE MEDICARE PRESCRIPTION DRUG PLAN

On January 1, 2006, Medicare began providing optional prescription drug coverage (also known as Medicare Part D) for all Medicare beneficiaries. This voluntary program replaces the current temporary “drug discount card” program, which will be phased out. By May 15, 2006 you will need to decide whether to join and pay for Medicare Part D. If you decline to join now, but decide to join after the deadline, you will have to pay a continuing monthly penalty.

OPTIONS

Eighteen insurance companies have offered a prescription drug plan in California. Each of these plans have met certain standards defined by Medicare. Some plans offer more extensive coverage than the basic requirements of Medicare Part D, including some coverage during the “benefit gap,” (which is described below). You should compare the plans to see which plan best fits your needs, and particularly which cover the drugs you currently use. If you join Medicare Part D, you can change from one company’s plan to another, without penalty, during annual enrollment periods. iods.

PREMIUM

There is a monthly premium for those who enroll in the new Medicare prescription drug program. This premium will vary depending on which company you select, but should be about $25 a month. This premium is in addition to the premium that subscribers pay for Medicare Part B services (doctor visits and outpatient services).

STANDARD MEDICARE COVERAGE

Each company has determined its own plan provisions, so there are differences in premiums, deductibles, and coverage. However, all plans must at least conform to certain basic requirements, which are described below.

As you can see, those with annual drug costs between $2,251 and $5,100 get zero help to meet these costs. This coverage gap is unfortunate, and I voted against this pharmaceutical plan because seniors deserve much better coverage. I am working hard for a fairer, simpler and more complete Medicare pharmaceutical benefit.

ENROLLMENT PERIOD AND “LATE” PENALTIES

The initial enrollment period for the Medicare Part D program ran through May 15, 2006. For most individuals who enroll in Part D now, there will be a penalty. However, those who had “creditable” prescription drug coverage through a private plan in place on May 15, 2006, may enroll in Part D later without penalty (see below).

Late enrollees will pay a 1% per month penalty for the period for which they were not covered. For example, if an individual chooses to enroll 36 months after the May 15, 2006 deadline, their penalty will be 36% of their Part D premium. Assuming a $25 monthly premium, this means an additional $9.00 per month in penalty charges every month for the rest of the individual’s life.

Participants who already have prescription drug coverage through their employers, unions, or managed care plans can avoid penalties without enrolling in the new Medicare program if their existing prescription drug plan is “creditable.” A “creditable” plan is one certified as meeting the minimum standards of Medicare Part D. If you currently have a “creditable” plan and your employer, union, or managed care provider stops providing “creditable” drug coverage, you may sign up for the Medicare Part D without penalty during the 63-day period beginning on the first day you do not have “creditable” prescription drug coverage.

My advice – for what it’s worth – is to enroll in Part D promptly unless you receive a notice that you already have “creditable” prescription drug coverage. Many seniors will find it troubling to pay about $25 per month, especially if their current prescription drug costs are low. However, health conditions change, and those who don’t spend much on pharmaceuticals now may need expensive drugs in future years.

LOW-INCOME BENEFICIARIES

Those beneficiaries with low incomes and limited savings may be eligible to receive additional assistance with some or all of the cost of their prescription drugs.  For information contact Social Security at 1-800-772-1213 (or go online at www.ssa.gov) or call 1-800-MEDICARE.  Likewise, you should call 1-800-MEDICARE for information if you are a “dual eligible” beneficiary, meaning you are eligible for both Medicare and Medi-Cal.

FREE ADVICE AVAILABLE

This is a new program and people will inevitably have questions or concerns about their coverage.  Please feel free to contact my Medicare specialist, John Anderson, in my Valley Office at (818) 501-9200.

In addition, the California Department of Aging runs the Health Insurance Counseling and Advocacy Program (HICAP).  HICAP provides information and counseling on a variety of health related issues including Medicare benefits, Medicare appeals, and long term care insurance.  HICAP is a free service reachable at 1-800-434-0222. 

In Los Angeles County HICAP administers its program through the Center for Health Care Rights.  You may contact them for educational materials about the new Medicare prescription drug program at 1-800- 824-0780. 

Medicare also has information available on its web site at www.medicare.gov or by calling 1-800-MEDICARE.

Please feel free to contact me about these issues or other federal issues which concern you.

Sincerely,

BRAD SHERMAN
Member of Congress

P.S. Please feel free to visit my website at http://BradSherman.house.gov and click on the link to my Federal Issues Questionnaire. I am interested in hearing about the issues that you care about. Also, please be sure to give us your email address so we can send you updates on Congressional activity.