A History on Medicare Reimbursement

Congressman Farr on Medicare

As you may know, the new Medicare prescription drug plan took effect January, 2006. Under current law, if you were eligible to join you had to have signed up by May 15, 2006.  That means, if you were eligible to sign up and did not, your window of opportunity is closed until "open season" which begins November 15, 2006 and runs until December 31, 2006.

Here are key issues to remember about the new Medicare prescription drug program:

• If you currently have Medicare Part A (Hospital Insurance) and/or Medicare Part B (Medical Insurance) you can join a Medicare prescription drug plan. 
• Your coverage will be effective the first day of the month after the month you join.
• If you do plan to enroll you must do so in month you become eligible or face a penalty.
• If you sign up for the Medicare drug coverage plan, you can only have that plan. You cannot in addition also have a separate Medi-gap plan or a retiree health plan from your place of employment.
• You can join or change plans once each year between November 15 and December 31 ("open season").

These are cautionary notes to people who are considering the new Medicare drug plan:

• It does not guarantee a discount on prescriptions.
• Drug companies (not Medicare) determine what drugs have discounts and how much seniors pay, so costs will vary person to person, depending on which company you choose.
• Seniors can sign up for only one card, not try to maximize their savings by using different cards for different drugs. 
• The government is prohibited from negotiating for lower prices for drugs covered under the program.
• The insurance companies set the premiums to be in the program, determine the drugs they will or will not cover, and at what cost savings, not Medicare.   You may find wide variations in benefits between different plans.

The Program in California

There are over 40 million Medicare beneficiaries nationwide, and 4,076,000 of them are in California. Of those in California, 933,000 beneficiaries do not have any prescription drug coverage.

California has a combined total of 47 individual drug cards available, in addition to10 national drug cards.

Seniors are advised to really, really check their options before deciding on whether or not to enroll in Medicare Part D.  Questions can be directed to the Medicare Hotline at 1-800-MEDICARE (1-800 633-4227) or to the Health Insurance Counseling & Advocacy Program (HICAP) at 1-800-434-0222. Further general information can be found on the web at www.medicare.gov.