The Medicare Drug Plan’s Ticking Clock

By Congressman Jim Davis

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Since the new Medicare Part D prescription drug benefit was introduced this January, many seniors and people with disabilities have struggled to determine which of the numerous drug plans available will best meet their health needs at a price they can afford.  Unfortunately, those who do not make a decision before the program’s May 15^th deadline will pay a significant price.  With the stakes high for seniors who grapple with limited incomes and high drug costs, Congress should act to extend this deadline.

 

Although enrollment in Medicare Part D is voluntary, to avoid a significant late penalty, beneficiaries must enroll in Part D either by May 15th, when they first become eligible for coverage, or within 63 days of losing their comparable coverage.  This penalty is 1 percent of the national average premium at the time of enrollment, multiplied by the number of months the beneficiary delayed enrollment - and beneficiaries must pay this penalty every month they remain in the program.

 

Because the penalty is calculated at the time of enrollment, and premiums are expected to rise with inflation in drug costs, the longer a beneficiary waits to enroll, the larger the Part D premium will be.  For those who enroll in a less expensive plan, the penalty will represent a higher percentage of their payment, because the penalty is based on the national average premium - not on the premium of the plan they selected.

 

I did not vote for the Medicare Modernization Act, which created Medicare Part D; but, now that it is law, I believe Congress should ensure this programs works for seniors.  I have sponsored the Medicare Informed Choice Act, the House version of Senator Bill Nelson’s legislation to delay late enrollment penalties and to allow every beneficiary to change plans once during their first year of enrollment.  This bill will also protect beneficiaries who mistakenly sign up for the new Part D benefit even though they have superior coverage through a former employer.

 

Unfortunately, the Senate recently rejected Senator Nelson’s proposal by a vote of 49 to 49.  I hope the House of Representatives will reconsider.  With countless Americans still trying to make sense of Medicare Part D, Congress should take steps to help seniors make the health care choices that are best for them - not endorse a deadline that forces seniors to make hasty enrollment decisions. 

 

In the meantime, I encourage all those who are eligible for Medicare Part D to pay heed to the May 15^th enrollment deadline.  Those who need additional information about the program can contact the Elder Helpline, sponsored by SHINE (Serving Health Insurance Needs of Elders) at (800) 963-5337.  SHINE counselors have received training in Medicare Part D, can answer questions and help beneficiaries select a prescription plan that meets their health care needs.