Medicare Part D - prescription drugs

What is it?

Medicare Part D is a variety of new insurance plans for outpatient prescription drugs that are federally subsidized but offered by private companies. Anyone eligible for Medicare (i.e. aged 65 and older, under 65 but with certain disabilities, or anyone with end-stage renal disease) is eligible to sign up, but except for Medicaid recipients, sign up is not automatic.

There are no income or asset limitations. Pre-existing conditions or the amount you spend currently on prescription drugs does not affect your eligibility for plans.

The plans offer different benefits, and operate like normal insurance. They may have deductibles, monthly premium costs and coinsurance payments. However, drugs purchased by patients under the plan may have a lower, negotiated cost. Over the counter drugs are not covered.

How do I choose a plan?

If you are Medicare eligible, you have probably received reams of material from companies marketing their plans. In Minnesota there are over 30 companies listed, some with multiple plans, that offer Part D drug insurance under Medicare programs.

Consider:

• Will your pharmacy accept your plan?
Bigfork Valley Pharmacy will accept the insurance of 16 of these companies. It is important to check with your pharmacy to see whether the plan you select will be accepted, if you choose to continue getting prescriptions there.

• Will your plan cover your drugs?
Different plans may cover different drugs. Check your plan’s list of “preferred drugs” or “formularies” to see whether it meets your needs.

• Cost.
The average monthly premium cost is about $35, with a deductible of $250. There is financial help available in some cases, although there is a total asset limitation to be eligible. Call (800) 772-1213 (TTY/TDD 800-325-0778) during the week from 7 a.m.-7 p.m. or visit the web site www.ssa.gov/prescriptionhelp to see if you qualify. Also see the “What will I be paying?” section below.

Pharmacist Keith Pearson will individually explain Part D to customers of Bigfork Valley Pharmacy on request. Call him at (218) 743-4444 to schedule an appointment.

What if I already have prescription drug insurance?

If you have a prescription drug plan with your former employer or union, you should ask if the plan will continue past January 1 and how it compares to the Medicare Part D plans. Similarly, if you carry a Medicare Supplement (Medigap) plan you should find out how it compares to Part D plans. If you have a Medigap plan, you must choose between that and Part D.

Plans that are as good or better than available Part D plans are considered “creditable.” If you have a creditable plan, you may switch later to a Part D plan without penalty.

I don’t need prescription drugs

Experts suggest that you consider signing up for a Part D plan if you are eligible, even if you don’t currently use prescription drugs. Why? You may need these drugs in the future and signing up now will insulate you against possibly higher premiums, you may avoid penalties for late sign up, or you may avoid high drug costs for any unexpected medical crises

When do I sign up?

Sign ups began Oct. 15 for Part D drug plans which will be effective Jan. 1, 2006. Sign ups will continue until May 15, with the effective date beginning on the first day of the following month. After May 15, there will be a one percent increase in premium cost per month, and the plan may not start until 2007. Another open enrollment will begin Nov. 15 until Dec. 31, 2006. Each year there will be an open enrollment period that will allow participants to change plans.

There are some exceptions. For instance, those enrolled in a “creditable” plan will not pay the additional premium cost penalty if they change to Part D after May 1.

Not yet 65? You may sign up for Part D during an open window that extends three months before and three months after your 65th birthday month.

I’m on Medicaid and I am assigned to a plan already

Those on Medicaid will be assigned randomly to a plan active in Minnesota. However, the plan assigned may not be honored by your regular pharmacy or may not cover your medications. Medicaid recipients have the right to choose a different plan.

What will I be paying?

Participants will typically pay a monthly premium, the initial deductible, and then a co-pay up to $2,250. From that amount to $5,100 is what is called the “Medigap,” and is not covered.

For a typical plan: Participants might pay a $35 per month premium, and (each year) the first $250 of prescription cost as a deductible, 25 percent of the next $2,000, the entire cost between $2,250 and $5,100 (“Medigap”) and then either 5 percent of prescription drug costs over $5,100 or low co-pays for the remainder of the year, according to the Lewin Group, a national health care consultant. For the first $5,100 each year in prescription drug costs, the participant will pay $3,600 plus premiums.

The Lewin Group has also developed a Medicare Prescription Drug Benefit calculator which can be accessed through the Minnesota Board on Aging web site at www.mnaging.org (Click on Senior LinkAge, Prescription Help/Medicare Part D, and Out of Pocket Costs.) or directly at webstudies.lewin.com/pdb/medicare2.htm. This calculator is based on national averages and assumptions, but the user can estimate how much he might pay for annual drug costs based on his own current annual drug cost and annual household income.