We encourage families to discuss coverage and ask questions before making major changes in insurance. Many families find their loved ones have been convinced to change plans or signed up for a Medicare Advantage plan without a full understanding of the implications. Aging Wisely’s staff receives ongoing training on insurance, Medicare, and Medicaid in order to help us guide our clients. Please contact us if we can help with any of your insurance questions or concerns.

What is Medicare Part D?

Medicare Part D provides prescription drug coverage to everyone who is eligible for Medicare. All of the Part D plans are private insurance plans. It is a voluntary program; eligible beneficiaries must choose to enroll. If you receive Medicare and Medicaid you will be enrolled automatically. The initial enrollment period was November 15, 2005-May 15, 2006. The annual enrollment period is from November 15-December 31st yearly. For those newly eligible for Medicare, the enrollment period is the same as it is for enrolling in Part B (3 months prior and 3 months after turning 65 or becoming otherwise eligible).

Does it cost to participate?

There will be a monthly premium, depending upon the plan you choose, approximately $32 per month, automatically deducted from your Social Security payment. If you are eligible and do not enroll and later decide to participate there is a late enrollment fee of approximately one percent of your premium for each month you delay for as long as you are enrolled in Part D (i.e. if you do not enroll for five years-60 months, your premium will be 60% higher for the remainder of the time you participate in the plan).
If your assets and income are below certain limits your premium and co-pays may be less. If you are receiving Medicaid benefits, Medicaid will pay for your premium. Medicaid will no longer pay your drug costs, the pay source will switch to one of the Medicare D providers (you may choose a provider, or will be randomly enrolled automatically).

Will I get free prescriptions if enroll?

No. Part D will only pay a portion of the cost for your prescriptions. This is an outline of the general coverage Medicare requires the plans to provide. You will be responsible to pay for the first $250 of prescriptions. Once you reach that point Part D will cover 75% of the next $2,000, meaning you have paid a co-insurance of up to $500. At this point you will have spent $2,250 in drug costs. There is not any coverage from the plan for the drug costs between $2,250 and $5,100, you will need to pay this amount in full. Once your total drug cost is greater than $5,100 in the calendar year, you will pay a co-pay which is the greater of 5% of each prescription or $2 for generic drugs and $5 for brand name drugs. See www.medicareadvocacy.org for a sample chart.

Remember, each plan is slightly different because they are being provided by private companies. Many offer better coverage than required. You should analyze the plan based on your situation. Remember, you can change plans yearly.
If your assets and income are below certain limits, your deductibles and co-pays will be substantially reduced or eliminated.

How do I choose a plan?

You will have to choose a plan. All plans are operated by private companies, not by the government. There are two types of plans. One is prescription drug plan (PDP) which only covers drugs and is used with your traditional Medicare and/or supplemental plan. The second plan combines a prescription drug plan with a Medicare Advantage plan (similar to a HMO) that includes medical coverage for doctor visits and hospital expenses; this is known as a Medicare Advantage plus Prescription Drug Plan (MA-PD).

There will be government requirements that each plan must provide, however the plans may be different. Each plan will have a list of what drugs are covered (called a formulary) and what pharmacies you may use. Before you choose a company plan you will want to see a list of drugs to see which company will best meet your needs. (Medicare’s Compare Plans on www.medicare.gov is a helpful tool). You will be able to change plans only once a year.

What happens if my retirement plan already provides prescription drug coverage?

If your current prescription drug plan provides coverage equivalent or similar (called “creditable coverage”) to the new Medicare Part D program you will be allowed to keep that coverage and not be penalized later by Part D for not immediately signing up when eligible. You should have received information from your current plan regarding whether or not you have creditable coverage-retain this paperwork in case you later need to prove you had coverage.

Other good resources for information:

• Medicare Helpline 1-800-633-4227
• Social Security Administration 1-800-772-1213 (Medicare and You handbook)
• Centers for Medicare & Medicaid Services – www.cms.hhs.gov
• Medicare – www.medicare.gov* Plan Compare tool
• Center for Medicare Advocacy – www.medicareadvocacy.org
• Medicare Rights Center – www.medicarerights.org
• FL SHINE (Serving the Health Insurance Needs of Elders)- 1-800-963-5337

This information provided by Aging Wisely, Inc. for general information. Please contact us at 727-447-5845 or www.agingwisely.com for more information or specific assistance with this and other aging/medical issues.