Medicare in 2006: What to do now
From November/December 2005 Psoriasis Advance
Changes are happening in Medicare and, no matter what your age, it's not too early to
learn about how they will affect you. Beginning Jan. 1, 2006, Medicare will provide prescription
drug coverage to seniors, and those on disability or who qualify for Medicaid.
What is Medicare?
Medicare, the federal health insurance program created in 1965 to assist seniors 65 and older, covers nearly 100 percent of the costs of seniors' hospital-based care (known as "Part A") and a portion of the costs of their physician office-based care ("Part B"). The benefit also provides health-care coverage to those on disability, a Social Security program that gives cash assistance to those unable to work due to a health problem. But basic Medicare has never covered prescription medication costs—at least not for medications taken at home. That is about to change.
How is it changing?
Beginning Jan. 1, 2006, Medicare will provide seniors and disabled enrollees with prescription drug coverage. Many will be receiving such coverage for the first time ever. The new benefit is available to all people with Medicare.
What does your current plan offer?
In order to take advantage of the prescription plan, called "Part D," you'll want to know what your current coverage offers. If you qualify for Medicare, starting this fall you can add a basic prescription benefit to your original Medicare coverage, stay in the plan you have (such as through your employer or a Medicare Advantage Plan in your HMO), or choose a new plan that better meets your needs.
How Medicare prescription plans work
From www.medicare.gov
After you pay a $250* yearly deductible, here's how the costs work:
- You pay 25 percent of your yearly drug costs from $250 to $2,250, and your plan pays the other 75 percent of these costs, then
- You pay 100 percent of your drug costs from $2,251 until your out-of-pocket costs reach $3,600, then
- You pay 5 percent of your drug costs for the rest of the calendar year after you have spent $3,600 out-of-pocket, and your plan pays the rest.
*In addition to the $250 deductible, most Medicare enrollees are also responsible for a monthly premium and co-pays, much like subscribers to other health plans. This premium averages $37. The co-pay for each prescription can be as low as $1 to $2 for generic drugs and $3 to $5 for brand-name drugs. |
What do your current medications cost?
Make a list of your current prescriptions and the dosages and costs of each. This will help you choose a plan that meets your needs. Next, talk to your doctor. He/she may be able to help you choose the insurance plan that best meets your needs now and in the future.
Will the basic Medicare prescription plan benefit you more?
Estimate what a Medicare prescription drug plan might cost you and if it will save you money.
According to Medicare, the average Medicare enrollee's drug costs are about $2,200 per year.
And, estimates show that if you spend more than $70 per month on prescriptions, a new Medicare
plan will be beneficial for you. There will be many Medicare prescription drug plans available to people in different parts of the country. Each plan will have coverage at least equivalent to the basic-level Medicare prescription drug plan, but many will offer a variety of coverage plans, sometimes offering enhanced coverage for higher premiums.
When do you need to enroll?
Medicare drug coverage is rolling out over several months; however, there are key dates to note on your calendar.
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Need more information?
For full details about Medicare, consult the resources below.
Basic information:
- Contact the Centers for Medicare and Medicaid Services at www.medicare.gov or 800.MEDICARE.
Rights and support information:
Enrollment assistance and eligibility information for seniors with limited income and resources:
- Contact the Social Security Administration at www.ssa.gov or 800.772.1213.
Information in this article was excerpted and adapted from "Medicare's Makeover," originally published in Arthritis Today, September/October 2005 and used with permission. Arthritis Today is published by the Arthritis Foundation. For additional information, and to access this article in its entirety, go to www.arthritis.org/resources/arthritistoday
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- Nov. 15, 2005: Enrollment period opens. This is also the day employers and unions offering
drug coverage for employees and retirees 65 and older will begin informing beneficiaries whether their plans' benefits are equivalent to the Medicare plans. Then beneficiaries can make an informed choice between their current employer's plan and the Medicare prescription drug plans. By this time, information has been sent to Medicare, Medicaid and Medigap participants regarding the drug programs. If you've made your decision on which plan to join by this date, you can go ahead and enroll.
- Dec. 31, 2005: Last day to join in a plan for coverage to begin on Jan. 1, 2006.
- Jan. 1, 2006: The Medicare prescription drug benefit begins for those who enrolled before Dec. 31, 2005.
- May 15, 2006: Open enrollment period ends. After this time, those who enroll in a Medicare prescription drug plan will have to pay an additional 1 percent premium for each month
that has passed since open enrollment closed. Medicare discount cards will no longer be
active.
If you are covered by Medicaid and don't join a drug coverage plan, Medicaid will enroll you in one to make sure you don't miss a day of coverage.
Why act now?
If you choose not to join when you are first eligible and later change your mind, you may have to pay a penalty. Also, you can switch your plan once a year if it doesn't cover the medications you need.
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