We have reached that time of year again…the Medicare Part D annual election period. Anyone who is currently enrolled in a Part D plan can switch plans from 11/15 to 12/31, with the plan becoming effective 1/1/08. Also, anyone who is eligible but has not previously enrolled may take this opportunity to enroll. There have been some changes, new plans, and of course, many people have had health changes. So, for many, it is worth at least evaluating whether they are on the best plan. If someone does not wish to change, they do not need to reapply.

When someone first becomes eligible for Medicare (age 65 or typically, 25 months after Social Security Disability payments begin) they must make a decision to participate in Parts B and D within a 7 month window (including the 3 months before and after eligibility) or face penalties later for not applying. If someone is covered by an employer or other plan, they should confirm their plan is “creditable” (the same or better than what Medicare offers) and save their letter of creditable coverage. If later, this coverage ends through no fault of the individual, they can enroll without penalty.

The penalty for not enrolling in a Part D plan is 1% of the national base beneficiary premium (changes yearly) multiplied by the number of months you did not enroll and were eligible (and went without creditable coverage for 63 continuous days or more), rounded to the nearest 10 cents. This amount is added to your monthly premium every month as long as you are enrolled. Therefore, it is important for individuals to consider some type of coverage to avoid potentially steep penalties later.

In most cases the only chance to enroll or switch plans after initial eligibility for Part D is this annual election period. Exceptions include moving out of a plan’s coverage area, losing creditable coverage, or being misled or not fully covered by a plan (or if a plan stops coverage). Some individuals have older Medigap (supplemental) polices that included prescription drug coverage, and they may choose to keep this if it is a creditable plan (again, save proof of creditable coverage) but will face penalties if it is not creditable. One cannot have one of these older Medigap policy with drug benefits and a Part D plan. Current Medigap policies do not include drug benefits, but only serve to help with copays and deductibles and some extra benefits. These plans are all standardized and cannot be used in conjunction with a Medicare Advantage plan.

People who are “Dual Eligibles”, eligible for both Medicaid and Medicare, will be automatically enrolled by Medicare into a Part D plan, but can chose another plan if they would like. The Part D plan pays the majority of drug costs, whereas Medicaid used to pay these. Individuals will have co-pays on their medications through Part D, unless they are “institutionalized”, i.e. in a nursing home or long term care facility (note: this does not include assisted living facilities and these co-pays can become a big issue for someone in assisted living under Medicaid who receives limited personal needs allowance).

Many Part D plans have what is known as a “donut hole” or coverage gap, meaning that once you received a certain amount of coverage each year, you pay all out of pocket costs until you reach “catastrophic coverage” (no more than $4050, but may be less depending on the plan). There are a number of plans that offer gap coverage, although it may only be for specified drugs. This, along with the varying premiums and co-pays for medications, dictates the importance of comparing plans individually and estimating which plan best fits your circumstances. Many people did not switch plans during the last annual enrollment period, which hopefully signifies they are happy with their plan, but for many it may not be their best option. There is also special help available for those who have limited income and assets.

Medicare offers a plan compare tool that is very helpful in looking at personalized choices. To use this tool, the individual should have available their Medicare #, effective date for Medicare (both are found on the Medicare card), last name, date of birth, and zip code, as well as a list of all medications including dosages and frequency. In addition to showing cost projections for the plan, you can review the plan’s performance and see details regarding customer service.

The Medicare Advantage Plans (AKA Part C) are privately run plans approved by Medicare, and generally combine a number of the different benefits into one plan. These include HMOs, PPOs, and Fee for Service plans. Medicare pays a nice incentive to them per enrollee, so they are often able to include extra benefits such as health club memberships or vision/dental coverage. These companies do a lot of marketing and we find that clients sometimes enroll without a full understanding. They are being more carefully monitored because of some past deceptive marketing practices, but it is still easy for clients to enroll without a full understanding given the complexity of choices.

These plans may be appropriate for certain individuals, especially those looking for extra benefits at lower cost. However, many individuals who sign up do not realize the potential restrictions. The HMO and PPO plans have networks of providers, meaning the potential doctors, specialists, and rehab./nursing facility choices may be limited. The Fee for Service plans do not have networks per se and are thus marketed as having full choice, but not all providers chose to participate due to the negotiated fees and thus in reality, choices may be limited. Clients should review all options carefully and weigh the pros and cons of each plan. If clients find themselves in a plan they do not like, especially when in a crisis, there are options for disenrolling.

If you or your clients need help with this or other insurance and benefits issues, our Benefits Specialists at Aging Wisely can help. We can run comparisons for clients and help them or their families in selections, assist with paperwork, deal with customer service and appeals issues, research claims or insurance issues, and help with filing claims or reviewing explanation of benefits.

We have also enclosed a 2008 Medicare Fact Sheet, with the latest copay and deductible information for the coming year, which we welcome you to reproduce for your clients or post in your office. Contact us if you would like additional copies or need any additional Aging Wisely brochures or information for your office.

Contact us at 727-447-5845 or 813-249-6507 or toll free at 1-888-807-2551. We can also be reached via email at admin@agingwisely.com.

Aging Wisely, providing Comprehensive Care Management and Consultation for seniors, disabled individuals and their families since 1998 throughout Pinellas, Pasco & Hillsborough counties.