On December 8, 2003, President Bush signed into law The Medicare Prescription Drug Improvement Act, now also known as Medicare Part D. This law is supposed to finally close that gaping hole called “lack of prescription drug coverage” in Medicare.
This is what Part D will cover:
Premiums
- $ 35 a month
Deductibles
- You pay the first $250 of your prescription drug cost
- When your drug cost is between $251 and $2,250, Medicare will pay 75% of the drug cost
- When your drug cost is between $2,251 and $3,600, Medicare pays nothing. That is, you pay for all of your drug cost.
- When your drug cost is above $3,600 Medicare will pay 100% of the drug cost.
Did you notice something weird in that whole set up? No?
Look again.
If your drug cost is between $2,251 and $3,600 you get no help. This has been referred to as “donut coverage” because of this big hole in the coverage.
You will still have a choice to remain in the traditional Medicare system and pay for your own drugs or joining a managed care program that offers prescription drug coverage.
A lot of Medicare recipients buy Supplemental Insurance, also known as Medigap. Medigap policies cover services that Medicare doesn’t cover. Some Medigap programs cover prescription drugs. If you now have Medigap that covers drugs, you can keep it. But you cannot have prescription coverage with both Medigap and the new Part D.
If you presently have prescription coverage through your state in the form of Medicaid, you will have your prescription coverage through the new Medicare Part D.
The law takes effect in the year 2006.
What was that you said? …
“But I need help today”
Well, there is a little help to tie you over till 2006 rolls along. And that is a Medicare-endorsed drug discount card.
The Discount Card Program
Starting June 2004 and ending in January 2006 when the law takes effect, an enrollee in Medicare can sign up for a card that will provide savings of 10 to 15% of the cost of a drug. You can only sign up for one card per year.
If your income is below 135% of the poverty level ($12,569 for single and $16,862 for a couple in 2004) and you don’t have other drug coverage, the government will provide you up to $600 a year for your drug expenses and you will not have to pay the annual fee. This is known as Transitional Assistance.
The cards are issued by private companies that are endorsed by the government. The government doesn’t really tell them how much savings to pass on but have provided some guidelines.
- An enrollment fee not to exceed $30 a year
- Savings on your drug of between 10% and 20%
Since these are guidelines, there are lots of variations in enrollment fees and savings. The government has published the cost of drugs offered by the endorsed companies, as well as, their enrollment fees on a web site (www.medicare.gov) so that enrollees can compare plans. You can only sign up for one plan in a year.
If all of this gave you a headache you can call CMS at (800) MEDICARE (1-800-633-4227) to speak to a live person and they will help you understand the new program and determine of joining is good for you. They will require three pieces of information;
- Your ZIP code,
- Your medicines and doses (you can find this information on your pill bottles), and
- Your total monthly income (if you are interested in the additional financial help available for people with Medicare who have lower incomes).
Remember, this program in voluntary that means you don’t have to join. So, if you are currently getting help with your prescription and joining would not result in additional savings, then don’t enroll. Also, if you are getting prescription assistance through Medicaid, you can’t enroll in the program.
A recent study, just released by the Kaiser Family Foundation, found that the new Medicare prescription drug discount cards could provide significant savings over retail prices for medicines. They, however, stated that because of the “excessive” number of cards available, the program is confusing to seniors. The bottom line is to seek help in understanding the program, determine if you will save money and, if so, enroll in it.
Dr. David Nganele
