Legislative Issues

Medicare Prescription Drug Coverage:
Information for Constituents

Starting January 1, 2006, Medicare will offer limited prescription drug coverage. Medicare beneficiaries can choose a "drug-only" plan to supplement their traditional Medicare coverage, or get drug coverage as part of a comprehensive private-sector Medicare managed care plan (now called "Medicare Advantage" plans). The enrollment period for 2006 coverage will be from November 15th, 2005 to May 15th, 2006. The enrollment period for 2007 will begin November 15th, 2006.

Congressman McDermott opposed the law that created this program because the drug benefit is inadequate, overly complex and was set up to maximize profits for the pharmaceutical and HMO companies rather than maximizing help to Medicare beneficiaries.

Now that the plans have been announced, these concerns remain. People need to be armed with the information necessary to make the best decision about whether to join and, if so, which plan may best meet their needs.

Whether you are a senior, a person with a disability or someone trying to help a parent or friend, it is important to carefully research the available options before making a choice. Most people have until May 15th, 2006 to sign up for a plan before late enrollment penalties apply, so take your time, check your facts and know
your options.

Below is some basic information to help you face these complicated choices.

Important considerations for the new drug benefit

Marketers may contact you about their plans and people pretending to be marketers may use the sign-up period to try to take advantage of you. To avoid fraud, do not give out any personal or financial information over the phone.

Whether to enroll in a Medicare prescription drug plan depends upon what kind of coverage, if any, you have today.

If you have prescription drug coverage through a retiree plan
Check with your former employer about your options before doing anything. If you are happy with your employer coverage, and it is continuing, you should not need to do anything.

Caution: if you drop your employer or union health coverage, you may not be able to rejoin it later.

If you are on both Medicare and Medicaid
Your Medicaid drug coverage will end on December 31, 2005 and your new Medicare-based coverage will begin on January 1, 2006. Because Medicaid will no longer provide drug coverage for you, you should choose the plan that best suits your needs. You will be able to change plans monthly if need be.

Caution: If you fail to choose a plan, you will be automatically assigned to a plan. To receive free premiums, you will need to pick a plan with average or below average premiums.

If you are currently enrolled in a managed care plan
(such as Group Health Cooperative or Pacificare)
Your plan will send you information about your options. If you want to stay with your current plan and it offers a prescription drug plan, you may enroll. If you do not want to remain in that plan, you may either enroll in a different Medicare managed care plan or return to traditional Medicare and select a private drug plan.

If you currently do not have prescription drug coverage
Evaluate your needs and investigate your options, but remember monthly premiums will be higher if you do not enroll by May 15, 2006. You will also want to determine if you are eligible for limited income assistance. The next section describes how to determine if you are eligible.

Extra assistance for people with limited incomes
Help with paying for Medicare drug plans is available for people with limited incomes. You may qualify for this assistance if your 2005 income is less than $14,356 for an individual / $19,245 for couples and you have limited assets.

If you think you may qualify for extra assistance, you should call the Social Security Administration at 1-800-772-1213 or visit online at www.socialsecurity.gov for more information.

Organizations that can provide more information

Washington State Office of the Insurance Commissioner
Statewide Health insurance Benefits Advisor (SHIBA) Helpline
1-800-562-6900

Medicare
www.medicare.gov
1-800-MEDICARE (1-800-633-4227)

Social Security Administration
www.ssa.gov/prescriptionhelp
1-800-772-1213

Have the following information with you when you call
  • Medicare identification number (on your Medicare card)
  • Drugs you currently take, the dosage and what you pay for them
  • Your refill schedule and preferred method of receiving prescriptions
     (at the pharmacy or via mail-order)
  • Your annual income, and a basic accounting of your personal assets in case you
    qualify for low-income assistance

Important dates to remember

October 1, 2005
Drug plans can send information on what plans are available in your community.

November 15, 2005
Enrollment period for Medicare drug benefit for 2006 begins.

December 31, 2005
Last day to enroll for coverage that begins on January 1, 2006.

January 1, 2006
Coverage begins for beneficiaries who enrolled by December 31, 2005.

May 15, 2006
Last day to enroll in a Medicare drug plan without incurring a 1% per month premium surcharge and last day to enroll to receive any benefits in 2006.

November 15, 2006
Open enrollment period for Medicare drug benefit begins for 2007. This is also the first opportunity for those who enrolled in a Medicare drug plan for 2006 to switch plans if they wish (except beneficiaries in both Medicaid and Medicare, who can switch plans during the year).