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Medicare Prescription Drug Plan is a Reality
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Starting in January, Medicare will offer prescription drug insurance coverage. The new coverage is called Medicare Part D Prescription Drug plan and anyone with Medicare is eligible to join. This new coverage will not pay all prescription drug costs, but it may provide peace of mind because it protects you once your out-of-pocket prescription spending is more than $3600/year.
Who Is Affected?
The options and requirements with Medicare Part D differ by the type of coverage you have in addition to Medicare Part A (Hospital Insurance) and Part B (Medical Insurance).
For example, your coverage may be affected if:
- You have Medicare with a supplemental (MediGap) policy.
- You have benefits through your retirement plan.
- You're enrolled in a Medicare HMO.
- You have both Medicare and Medi-Cal.
- You have Medicare with income below $14,355 for one person or below $19,245 for a couple.
According to Arlene Phillips, Manager of Senior Services for John Muir Health, specific information about Part D is different for individuals in each of these categories. "The best thing to do is research to see how Part D will affect your coverage."
The Part D prescription drug plans will be operated by private companies. Coverage will be offered either through a separate drug plan or a Medicare HMO that provides drug coverage. Each plan will have a list of prescription drugs that are covered.
Enrollment begins November 15, 2005 and runs through May 15, 006. If you join before December 31, 2005, coverage will begin January 1, 2006. If you enroll between January 1 and May 15, 2006, coverage will begin the first of the month following your enrollment.
What Are The Benefits?
Lennis Lyon, Manager of Contra Costa County's Health Insurance Counseling and Advocacy Program, says that while there are many Part D programs to choose from, all must meet a standard. "Part D plans may vary in how they provide the benefits, but all plans must meet federal guidelines on the value of the benefits they provide and on the share of drug costs that individuals must pay. Premiums, deductibles, co-payments and coverage limits may vary among plans."
Some companies may also offer "enhanced" drug plans. These plans will cost more, but may include additional benefits, such as a greater selection of covered drugs.
If you are currently in a Medicare HMO, compare your needs and preferences for prescription drugs with those that will be covered by your plan in 2006. Will the coverage be a good fit for your future needs?
You may also choose to receive your Medicare drug coverage in a Medicare HMO. These plans will now be called "Medicare Advantage HMOs" and the HMOs that offer prescription coverage will be called "Medicare Advantage Prescription Drug Plans." If you are in a Medicare Advantage HMO, you cannot purchase a separate prescription drug plan.
Should You Enroll?
Enrolling in a Medicare drug plan is voluntary. However, if you do not enroll by May 15, 2006 and later want to enroll, you may have to pay higher premiums for the rest of your life. The extra charge is an additional 1% for each month that you waited to enroll. The charge is added to your regular monthly premium and is a permanent assessment. You will have to pay this additional premium if you do not have other prescription drug coverage that is at least as good as Medicare's coverage.
If you have drug coverage that is determined to be at least as good as Medicare's, you will not be subject to the higher premium if you decide to join a Medicare drug plan at a later date.
Carefully compare your preferences for prescription drugs with the drugs covered by the plans you are considering. Be sure the plan you select is a good fit for your needs now and in the future.
If you have other prescription drug coverage, such as a retiree health plan, review your options carefully. Enrolling in a Medicare drug plan could make you ineligible for continued retiree health benefits.
Additional Resources
- www.medicare.gov
1-800-434-0222,
TTY 1-877-486-2048 - www.cahealthadvocates.org
1-800- 510-2020,
TTY 925-335-8730,
Offers presentations and counseling on Medicare's prescription drug coverage. - John Muir Senior Services offers a wide range of educational programs, support groups, resource information and assessment services.
(925) 952-2759
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