Medicare Part D (Prescription Drug), 10/2005

Key Lecture Points:

• In 2003, Congress passed the Medicare Modernization Act which established (among other things) a prescription drug benefit for all people who are entitled to Medicare. The Prescription Drug Benefit, also referred to as Medicare Part D, begins on January 1, 2006.

• The open enrollment period for Medicare Part D begins November 15 and closes on May 15, 2006. Seniors are not required to enroll. However, any eligible enrollee who signs up after May 15, 2006 will have to pay a higher premium.

• Seniors who currently have prescription drug coverage from another source (private or public) should check with their benefits administrators to find out what (if any) the new benefit will have any effect upon their coverage.

• The Prescription Drug benefit will have costs for the beneficiary: a monthly premium, a deductible and a co-payment. The specific costs will vary depending upon the type of plan chosen by the enrollee. Additionally, low-income enrollees may be eligible for partial or total waivers of the fees.

• Typically, the benefit will pay 75% of drug costs (after the deductible) up to $2250; and 95% of drug costs above $3600. Medicare Part D covers none of the cost of prescription drugs between $2250 and $3600 This is the so-called “doughnut hole”. Some insurance companies will provide supplemental insurance to cover this gap in Medicare coverage.

• As opposed to “traditional” Medicare which is administered by the Federal Department of Health and Human Services (HHS), Medicare Part D will be administered by private health insurance companies, approved by HHS. In Colorado, 17 different insurance companies are offering a total of 43 plans to choose from for those eligible for Part D.

• Seniors have two choices to make:
1. Should I sign up for Medicare Part D?
2. What Medicare Part D plan should I choose?

• In making these decisions, Seniors should consult with family, friends and trusted professionals. Unfortunately, the possibility of fraud is significant.

• When signing up for a Part D plan, one should take into account its cost as well as the drugs that the plan covers.

For More Information:
• Main Medicare website which provides information about all Medicare issues, including Part D: www.medicare.gov
• AARP coverage of Medicare Part D: http://www.aarp.org/health/medicare/drug_coverage/medicarerx_coverage.html
• Medicare Rights Center: www.medicarerights.org/drughelp.html
• National Council on the Aging: www.benefitscheckup.org

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