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Enrollment, Penalties, Covered Drugs in Medicare Program Explained

Posted on: Saturday, 1 October 2005, 03:01 CDT

By Larry Lipman, The Palm Beach Post, Fla.

Oct. 1--QUESTION: Who is eligible for the Medicare prescription drug program, also known as Medicare Part D?

ANSWER: All 43 million elderly and disabled Medicare beneficiaries are eligible for the prescription drug program, regardless of their income. Certain low-income beneficiaries -- individuals with income below $14,355 and and couples below $19,245 with assets of less than $10,000 for an individual and $20,000 for a couple (not counting residence, vehicle or burial plot) -- are eligible for extra assistance in the form of lower premiums, deductibles and co-payments.

Q: Should Medicare beneficiaries who have drug coverage through a former employer apply for the Medicare prescription drug program?

A: Generally, employer-sponsored drug coverage will be at least as good as or better than Medicare's and will cost the retiree less. If the employer later discontinues coverage, beneficiaries can enroll in a Medicare drug plan without paying a penalty.

Q: Should beneficiaries with low prescription drug costs enroll?

A: That's a question each beneficiary will have to answer based on individual circumstances. Medicare provides a "calculator" at www.medicare.gov to help determine what a beneficiary's average savings would be for his or her current drug use. But advocates for beneficiaries suggest it is wise to join a low-cost plan now as insurance against unexpected high drug costs later in life, just as beneficiaries now join Medicare Part B for doctor coverage, regardless of whether they are in ill health. Beneficiaries who don't enroll when they are eligible face higher premiums if they enroll later.

Q: When and how can beneficiaries enroll in the program?

A: There are a variety of ways to enroll in a plan. Beneficiaries can enroll in a company's plan by going through the Medicare Web site at www.medicare.gov or through the Medicare hotline at (800) MEDICAR (1-800-633-4227). TTY users may enroll by calling (877) 486-2048. Or beneficiaries can enroll directly with a specific plan, either through a paper application, the plan's Web site, or by calling the company. But the company is prohibited from calling beneficiaries to encourage them to enroll.

Q: What is the penalty for late enrollment?

A: Beneficiaries who are currently eligible for Medicare have until May 15, 2006, to enroll in a plan or face a 1 percent per month increase in their premium for each month they delay. Beneficiaries who turn 65 in 2006 have two months to enroll prior to their birthday, the month of their birthday and the month after their birthday in which to enroll. So a person who turns 65 on May 15, 2006, would have until June 30, 2006, to enroll without a penalty.

Q: When do the Medicare benefits begin?

A: Benefits begin Jan. 1, 2006. For beneficiaries who enroll between Jan. 1 and May 15, 2006, they will begin on the first day of the following month. Eligible beneficiaries who do not enroll by May 15, 2006, will have to wait until November 2006 to enroll, and coverage will begin Jan. 1, 2007. However, people who turn 65 after May 15 will be able to enroll as outlined in the question above.

Q: What is covered in the basic plan?

A: In the basic plan, beneficiaries would pay a monthly premium of about $32 and all drug costs up to a deductible of $250. Above that, the plans would cover 75 percent of certain drug costs up to a total drug expense of $2,250. The beneficiary then would pay for all drug costs up to a total of $5,100. After that amount, plans would cover at least 95 percent of drug costs. Many plans will offer more generous benefits, including lower premiums, deductibles and co-payments, and less of a gap in the amount covered.

Q: Are all prescription drugs covered?

A: No. Each company must publish a "formulary" indicating which drugs are covered. Each plan must cover at least two drugs in all 146 drug categories, but not all drugs will be covered in each plan. Beneficiaries who need a specific drug not on their plan's formulary may go through an appeal process if it is medically necessary that they receive that drug.

Q: What is the best way to pick a plan?

A: Medicare officials and beneficiary advocates urge beneficiaries to consider several factors, including: the cost of premiums; the levels of deductibles and co-payments; whether there is a gap in coverage; what specific drugs are covered; and whether the plan would be accepted at the beneficiary's favorite pharmacy. Beginning Oct. 13, Medicare will offer a tool on its Web site (www.medicare.gov) that will allow beneficiaries to list their drugs and compare plans against others.

Q: What should beneficiaries do if they are members of a managed care plan?

A: Many managed care plans are offering the Medicare drug benefit as part of their plan -- some at little or no increase in premium. The plan will inform its members of how to enroll in the drug benefit. Beneficiaries who are in plans that don't offer a drug benefit, or who want to enroll in a different drug plan, can enroll in a stand-alone Medicare prescription drug plan. Beneficiaries who have fee-for-service Medicare coverage also can join a stand-alone plan.

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Source: The Palm Beach Post

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