The Medicare Prescription Drug Plan: Don’t Let Seniors Throw Out the Baby with the Bath Water

I don’t know what they were thinking in Washington, when they came up with the Medicare Prescription Drug Plan (aka Medicare Part D). If it turns out they were on drugs, it wouldn’t surprise me.

The promise – that Medicare would pay about half the drug costs for seniors – is certainly a step in the right direction. But I don’t see how the program could be more confusing and complicated. Still, those who sign up by May 15th can save a substantial sum, not just in 2006, but for the rest of their lives. Folks who don’t will pay penalties … essentially forever.

Yet you really need to be ‘Net savvy to make the most of the program – which must deter lots of seniors. Also, the press accounts of its problems have no doubt discouraged many others from applying.

And who knows? Maybe President Bush’s current campaign to get seniors to sign up is  having the opposite effect. With his popularity down the tubes, I’m afraid many will decide that since Bush is for it, it can’t be any good. Yet it’s way better – and cheaper – than no drug coverage at all.

Feel the program should be significantly reformed and the May 15th deadline canceled? I agree! Sign a  petition aimed at those two goals. Then be sure to get your folks to sign up for a drug plan by the 15th!

Be the Solution
If you’re reading this, chances are good that you can help loved ones figure out which of the 40 or more plans makes the most sense for them. If you do it before May 15th, you’ll help them save a lot of money for years to come, and maybe get yourself some "brownie points." (Hey, we can all use some of them!)

So volunteer right now to help your mom, dad, grandma, grandpa, aunts, uncles, etc. navigate Medicare’s site! If they don’t already have drug coverage, the new drug plan can save them money – but if they make a bad choice, their annual drug costs could easily increase by thousands of dollars. This is no joke!

First, though, they may already have a drug plan – via "Medigap" or private insurance (e.g., through a former employer). This coverage is often better than what’s available through Medicare, and they should have received a letter from their plan making that clear. If that’s the case, you get the points and don’t even need to sit down at the keyboard!

Also important to know up-front: There are new subsidies for those with low incomes.

There’s No One Size Fits All
Unfortunately, no one plan is going to be best for everyone – or everyone who has arthritis – or even everyone with arthritis who lives in Detroit. There are way too many variables, including:

• Location.
• Deductibles, which range from $0 to $250.
• Co-pays, which vary by company and by drug.
• "Formularies" – the list of drugs that are covered by each plan, sometimes in limited quantities. If the specific meds aren’t on the list, they won’t be covered. If they’re on the list, keep your fingers crossed that they won’t be removed, which the insurers can do after giving notice.
• "Doughnut" coverage – for the built-in gap in coverage.

The Skinny on the Doughnut
There’s an initial coverage limit of $2,250, which is calculated according to the total cost of a person’s meds – not the total amount the senior has spent. So folks on pricey prescriptions get there pretty quickly. After that amount is reached, seniors pay the full cost of all drugs – until their out of pocket cost reaches $3,600.

The price of the drug remains the same, since the seniors are still in a plan. But instead of paying about 25% of the bill, all of a sudden, they have to pay the whole amount -  until they’ve laid out $3,600.

Fortunately, for those who must take a lot of meds, there are plans that fill the hole. In any case, once that $3,600 is reached, catastrophic coverage kicks in, and about 95% of drug costs are covered (with some exceptions).

Punch a Few Keys for Someone You Love – NOW!
To make sure your loved ones benefit as much as possible from Medicare Part D, invest the time in the next few days to help them compare their alternatives. You’ll need a list of all their meds, including the doses and monthly quantities, plus the names of their preferred drugstore … and patience for the process.

While you can call 800-MEDICARE and give the list of prescriptions to someone, it’s too complicated imho for a phone call. It can be useful for specific questions, though.

Remember: Folks who don’t sign up by May 15, 2006 will face monthly penalties. After that, the next sign up period is between November 15, 2006 and December 31, 2006, with coverage beginning January 1, 2007. So go get yourself some brownie points and please let us know how you make out!

Tagged as: credit.com, deductibles, doughnut coverage, drug plan, formularies, Helping seniors sign up for medicare, May 15th, medicare, medicare explanations, medicare help, medicare part d, Medicare plan, Medigap, prescription drug plan, senior health insurance

Nancy Castleman