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How Urgent Is It That You Make A Decision About Medicare Part D ?
Most of us will need to make a decision about whether we want to participate in Medicare Part D at all, and, if we decide yes, we will need to choose from the approximately 42 Stand-Alone Medicare Prescription Drug Plans available in Indiana and 24 Medicare Health Plans (HMOs, PPOs, and PFFS Plans - See page ___).
These choices are extremely complicated - and critical information needed to make good decisions is not readily available.
Fortunately, for most of us, there is NO need to rush into a decision. And there are plenty of good reasons NOT to rush into a decision.
There are two important exceptions: It may be valuable to sign up for a plan by the end of 2005 (so your coverage will start January 1, 2006) IF you meet one of these criteria:
- You are eligible for Extra Help, but won't get it automatically.
Your monthly income is below $1,196 (single) or $1,604 (couple) and financial assets below $11,500 (single) or $23,000 (couple), and you are NOT on Medicaid, a Medicare Savings Program, or SSI. **
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This extra help coverage is excellent, without the high deductible and co-pay or the coverage gap of the basic Medicare Part D benefit, and you may want to sign up for this coverage as soon as possible, so that you don't go without it after January 1st.
** Important note: These income and asset figures are for 2005. They will increase in 2006. |
- You expect to have prescription drug costs significantly in excess of $6,000 in 2006, and do NOT have good coverage.
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The best part of the Medicare Part D coverage (except for the extra help available to people with low income and low assets) is the catastrophic coverage that pays 95% of your drug costs each year AFTER your covered prescription drug costs have reached $5,100 (of which you will have paid out of your own pocket $3,600 plus your monthly premium which will average $386 for the year.
So if you have drug costs significantly in excess of $6,000 you may want to sign up for Part D coverage by December 31st, so your coverage will be in effect on January 1st, and your drug expenditures will start counting toward the $5,100 needed before catastrophic coverage kicks in. |
The Premium Penalty: After May 15, 2006
The premium penalty which Congress wrote into the MMA (the Medicare prescription drug legislation) starts taking effect after May 15, 2006 for people fully eligible for Medicare Part D as of January 1, 2006.
So May 15th may be a target date for making your decision for 2006. However, the penalty if you did not sign up until the very end of 2006 would only be 7% of the average 2005 premium, or $2.24 per month. So let's say your premium in 2007 was $40 a month, your monthly penalty would be $2.80. And you may have saved hundreds of dollars by not paying a premium during 2006.
One option you can exercise in May if you still don't feel comfortable about choosing a plan, but you want to avoid a future penalty is to select Indiana's least expensive option at $12.30 a month(offered by Humana, see your Medicare & You 2006 Handbook, page 97E). You might choose to sign up for that plan for 2006, and not use it at all (see Other Ways To Lower Your Drug Costs, page ___)
Why To Avoid Making A Rushed Decision
For most of us, there are plenty of good reasons to NOT rush into a decision.
- The decision really involves several decisions, each of which is VERY complicated:
Could I save more on my prescription costs with an alternative approach, such as importing my prescriptions (see page __) than I can with any Medicare D plan?
If I want Medicare Part D prescription coverage, do I want a Stand-Alone Prescription Plan, or a Medicare Advantage Plan that combines Medicare Parts A and B coverage with prescription coverage? (See page ___)
Once I decide on the type of Medicare prescription coverage I want, how do I compare the many different choices available in Indiana and decide what's best for me? (See page ___)
How do I weigh my present prescription needs and possible future needs I may want to protect myself against.
- No one has any experience whatsoever with most of the Medicare Part D plans in Indiana.
- It is very difficult to get good information and answers to questions you may have about many of the available plans.
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The Medicare Rights Center is warning people with Medicare, their caregivers and professionals who assist them, to avoid using the internet based "Medicare Prescription Drug Plan Finder" that the Bush Administration launched in mid-October. "The tool is misleading at worst, useless at best. . ." said Robert M. Hayes, president of the Medicare Rights Center, a national consumer service group. The Drug Plan Finder offers no information on what drugs specific plans cover or what a consumer will pay for those drugs, Mr. Hayes said.
The Medicare Rights Center also warns that another Centers for Medicare and Medicaid Services tool, the "Formulary Plan Finder," is not much help either. This web tool lets users enter the medications they take and see which plans cover them, but it does not tell them how much the consumer will pay for the drugs under the various plans.
Finally, the consumer group warns that the "Medicare Prescription Drug Plan Cost Estimator" is extremely misleading. The savings it estimates is based on the lowest premium in the region, does not take into account if the drugs are covered in that lowest premium plan or what the cost sharing for each drug will be.
When United Senior Action tried to contact the plans for information, we called the phone numbers listed in the 2006 Medicare and You Handbook, and most of them were answered not by the companies who were offering the policies, but by companies under contract to answer the phone and arrange to send you literature and/or send an agent to your house. Many of these could not (or would not) even provide a phone number to call someone in the insurance company who could answer questions.
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So, unless you are one of the exceptions listed above, don't let anyone push you into making a decision quickly. You have at least 6 months from the time this special issue of the United Senior Advocate is published (early November, 2005), and perhaps months more, before you need to make up your mind. That will give you time to research options, and seek out help (see page ___) before you need to make a decision.
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