The New Medicare Prescription Drug Benefit
Medicare Part D
As many of you are aware, the new prescription drug benefit will begin in January 2006. The open enrollment period starts November 15, 2005 and ends May 15, 2006. Remember, you do not have to participate in a new Medicare prescription drug program, however if you choose to enroll after the initial enrollment period, you may be charged a penalty for late enrollment. With some exceptions, the penalty for signing up late is a higher premium—an extra 1% of the national average premium for each month (or 12% for each year) that you delay.
Over the next several months you will begin receive mailings from various prescription drug plans describing their coverage. Make sure to read everything carefully. While Medicare will require plans to offer some drugs from most classes of drugs that does not mean that all drugs will be covered and plans will be allowed to use a drug formulary.
Beginning October 13, 2005, you can compare drug plans online at www.medicare.gov. Medicare’s website will allow you to compare the plans point by point, such as their premiums, co-payments and which drugs they cover. If you don’t have access to the internet, you can get the same kind of information by calling Medicare at 1-800-MEDICARE (1-800-633-4227). Make sure to find the plan that best suits your needs.
Coverage of Drug Expenses
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Beginning in 2006, individuals will pay a $250 deductible.
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After the deductible is paid, Medicare will pay 75% of your drug costs and you will pay 25% until your total drug costs reach $2,250.
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You will be solely responsible for drug costs between $2,251 to $5,100.
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Once your total drug costs are over $5,100, your drug expenses will be covered by Medicare. You will then pay a $1 to $5 drug co-payment or 5% of the drug costs, whichever is more.
Extra help for People with Limited Incomes
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You may qualify for this extra help if your income is below $14,355 a year (or $19,245 if you are married and living with your spouse—and more if you have dependent children or grandchildren living with you), and if your assets are below $11,500 (or $23,000 if you are married).
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If you have very limited income, you will have no coverage gap, will pay no premiums or deductibles, and will have co-payments for each prescription of $1 or $2 for generics and $3 or $5 for brandname drugs.
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If you have slightly higher income, you will have no coverage gap, will pay a reduced monthly premium that will vary depending on your income and where you live, and a reduced deductible of $50 a year.
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You can get an application from the Social Security Administration. Call the Social Security Administration at 1-800-772-1213 or visit their website at http://www.socialsecurity.gov. |
