Answers About the Medicare Drug Plan

The new Medicare drug program, known as Part D, has resulted in much confusion about rules, benefits and costs. Here are answers to frequently asked questions from a leading health-care advocate.

DECIDING WHETHER TO SIGN UP

My mother is in her 80s, in good health and does not take any medications. Does she need Part D? Your mother may not need coverage now, but she might consider a low monthly fee plan in case she does need coverage in the future and is concerned about the penalty. For every month she puts off enrolling after May 15, 2006 (when Part D went into effect), she will pay a penalty of 1% of the monthly premium.

For example, delaying for 15 months would mean a 15% penalty every month for the rest of her life. The typical plan charges $32 a month,* but in many states, plans may cost much less.

Note: If you enroll in Part D more than three months after your 65th birthday, when you become eligible for Medicare, you will be charged an extra 1% of the current monthly premium for every month you wait to enroll.

CUTTING COSTS

I prefer to fill my prescriptions on a 90 day basis. Do any Part D plans offer this option? Certain plans do allow prescriptions for 90 days at a time, reducing copayments. Go to www.medicare.gov. Under “Search Tools,” click on “Compare Medicare Prescription Drug Plans,” then on “Find & Compare Plans.”

Next, click on “Begin General Search.” Once you get to Step 3, click on “Continue,” then on “Continue to Plan List.” Here, go to “Select Criteria to Reduce Number of Plans Shown,” and click on “Plans that allow me to use mail-order pharmacies.” Call to confirm.

SWITCHING PLANS

I have heard that an insurer can increase premiums for the following year or drop a drug from its “formulary” (fist of available medications). Is this correct? Yes. If a plan no longer seems like a good deal, you might want to switch.
Each year, between November 15 and December 31, you can do so for the next year without penalty.

If your Part D provider drops a drug that you need, you can ask for an exception … appeal to the independent review board if your request is turned down … or ask for judicial review under certain circumstances.

HELP FOR LOW-INCOME PEOPLE

My father would like to sign up for the Medicare Part D plan, but he can’t afford it. Is financial assistance available? If his income in 2007 is below $15,315 per year ($20,535 for couples) and his assets are worth less than $11,710 ($23,410 for couples), excluding both his home and vehicle but including $1,500 per person for burial and funeral expenses, he can get Part D coverage through the government’s Extra Help program (new income limits will apply in 2008).

If he qualifies for the full subsidy, he will have to pay $2.10 for generic drugs and $5.35 for brand-name drugs, with no premiums or deductibles. Check the Social Security Administration (800-772-1213 or uwwssa.gov) for additional information.

I work with low-income people. Pharmaceutical companies do offer programs to get these people the drugs they need, but anyone who has insurance doesn’t qualify. If they sign up for Medicare Part D, their free meds will stop. What should they do? If your clients’ income and assets are low enough that they can qualify for the Extra Help program (see previous question), they should sign up for Medicare Part D. The drugs they need should be available, but check first to make sure.

Unfortunately, some people do have incomes low enough to qualify for drug companies’ patient-assistance programs but not low enough to qualify for the full Extra Help subsidy. These individuals may be better off skipping Part D in order to continue to get free prescription medications through the drug makers.

DONUT HOLE TRAP

Can you explain the “donut hole”? When Part D was originally being discussed, using a “standard plan” model, the plan in 2007 would pick up a portion of expenses up to $2,400 in total drug costs, then the individual would pay 100% of expenses up to $5,451 (the so-called “donut hole”). The plan would resume picking up 95% of costs over this amount for the remainder of the year.

In the end, there was no standard plan, so when the donut hole begins, what you pay depends on the plan you select. Read the various plans’ rules to find out what they provide.

No matter when your coverage gap begins, once you have $3,850 in out-of-pocket drug expenses in any calendar year, not including premiums, drugs that aren’t included on the plan and drugs purchased at out-of-network pharmacies “catastrophic coverage” kicks in and 95% of costs (not including the items that are listed above) are covered.

NURSING HOME CARE

My uncle is 84 and living in a nursing home. Should he sign up for Part D? If your uncle qualifies for Medicaid assistance for his nursing home bills, then he automatically qualifies for Medicare Part D’s Extra Help program.

Make sure that the plan you select includes a pharmacy that works with his nursing home. If your uncle is not getting Medicaid, he still can select a Medicare private drug plan that works with his nursing home.

CREDITABLE COVERAGE

I have prescription drug coverage via my wife’s insurance plan at her job. I also have Original Medicare.* To obtain Part D without a penalty, do I have to sign up now or can I wait until my wife’s coverage is no longer in effect? You can wait and not pay a penalty if and when you do sign up for a Part D plan as long as your wife’s coverage is “credit-able” – that means it is at least as good as Medicare Part D. (Coverage purchased privately, not through an employer, also can be creditable, although Medigap drug coverage is not.)

Your wife’s employer should have sent her a notice stating whether the coverage is creditable. Keep a copy for your records to avoid penalties when you do sign up for Part D.

I go to the VA hospital for medical care and prescriptions. Is this considered creditable coverage? Yes. (It probably isn’t necessary to get a letter from the VA stating that you have coverage, but it couldn’t hurt.)

MEDICARE HMOs

I belong to a Medicare HMO in Massachusetts. Officials there told me that they would cancel my coverage if I joined another insurer’s Part D plan. There are other Part D plans more suitable for me. Can they actually cancel me if I avail myself of one of these? Yes. If you’re in a Medicare private health plan, such as an HMO or PPO, you’ll lose coverage if you sign up for a stand-alone Part D plan.

Before you settle for your current provider’s Part D plan, consider whether you would be better off switching to Original Medicare, which covers hospitalization and outpatient services, and a Medigap supplemental policy to help with the deductibles and copayments that Medicare doesn’t cover, plus the stand-alone Part D plan of your choice.

Important: Several insurers are promoting zero or low-cost prescription drug plans that really are HMOs in disguise. Make sure you are signing up for a prescription drug plan only if that’s all you want.

My father-in-law has Medicare and Tricare, the US Military’s retiree health plan. Since the Tricare drug plan is comparable (actually better), do we need to sign him up for Medicare Part D? No, you don’t, and since Tricare is creditable coverage, you won’t face a penalty if he someday decides he does want to sign up for Part D.

HIGH-PRICED MEDICATION

I pay $20 per month for my rheumatoid arthritis medication (Enbrel) through my employer’s plan, which ends when I retire soon. My pharmacist claims the drug will cost more than $1,200 per month without insurance. I’ve checked the companies providing Part D coverage and cannot find any that adequately cover my drug. Any suggestions? Like many brand-name drugs, yours is in the more expensive, high-tier of the private drug plans. That probably means you’ll have to pay more than you’re paying now. Exactly how much more will depend on your state and the plan you choose.

Also, there may be drug plan restrictions on more expensive drugs, so you may need your doctor’s assistance to obtain coverage. DISABILITY AND MEDICARE

I’m 64 years old and on disability, Medicare and Social Security. Can I apply for Part D now, or do I have to wait until I’m 65? If your Medicare benefits have already begun, you can sign up right away.

If you’re still waiting for your Medicare benefits (for people under age 65, they don’t start until two years after disability payments begin), then you can’t sign up until three months before your Medicare coverage begins or in the month of your 65th birthday. The coverage begins the month you become eligible for Medicare.

BUYING DRUGS ABROAD

I live in Wisconsin and spend my winters in Arizona. I am on several medications which I get in Canada for a fraction of the cost I would have to pay in the US. Should I sign up for Part D or continue buying my medications in Canada? Many people have found that it’s cheaper and less of a hassle to buy their prescription drugs across the border. But there’s always a chance that you might one day reside in a state where cross-border trips are not as convenient … that you could require additional medications quickly … or that a medication you need might not be easily obtained in Canada.

Even if you continue buying your drugs Canada, to play it safe, also consider signing up for a Part D plan with a very low premium.

CHOOSING A PLAN

You are under no obligation to sign up for Medicare Part D, but if you do, make sure that the plan you choose offers the drugs you need at a fair price through a pharmacy you like. Figure in premiums, deductibles and copayments.

You can compare Medicare prescription drug plans that are available in your state at the Medicare Web site or by calling 800-MEDICARE.

Article by Carson Danfield