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Frequently Asked Questions About Medicare Part D

Frequently Asked Questions About Medicare Part D

Written by:
Karen Pallarito –

Answers to common questions about the new prescription drug program

What is Medicare Part D?
It’s the largest expansion of Medicare since the health insurance program’s inception four decades ago. Part D adds outpatient coverage for prescription drugs, including brand-name and generic medications.

Who is eligible for coverage?
Anyone with Medicare Part A or Part B—or both—may enroll in a Part D drug plan. You cannot be denied coverage for health reasons.

Do I have to enroll in Medicare Part D?
No. Enrollment is voluntary. Review your options and do what’s best for you.

How does Part D work?
Unlike Medicare’s hospital and physician programs, there is no single Part D plan. Prescription drug coverage is provided through a variety of private plans that contract with Medicare. If you are in Medicare’s traditional program, you may enroll in a standalone drug plan. If you are in a Medicare Advantage plan, like an HMO or PPO that offers drug coverage, you can stay with that plan or choose another one.

What are my drug plan choices?
It depends on where you live. In every market, there must be at least two choices. One of those must be a stand-alone drug plan. In some metropolitan areas, there are dozens of drug plans from which to choose.

What does Part D cover?
It covers some of the cost of certain drugs. Drug plans must cover at least two drugs in every drug category. Plans must cover a majority of medicines in six classes: antiretrovirals, antidepressants, antipsychotics, anticonvulsants, immunosuppressants and anti-cancer drugs. Certain medicines are excluded by law, such as prescription vitamins and minerals, over-the-counter drugs and certain anti-anxiety and seizure medications.

What can I do if my doctor prescribes a drug that isn’t on the plan’s formulary?
Every drug plan must have a process for granting exceptions. Your doctor will have to certify that the drug is medically necessary or that a covered alternative would not be as effective or would pose adverse side effects. If your plan still won’t cover the drug you need, you can file an appeal.

Is there a single benefit design?
No. All private drug plans must offer a benefit that equals or exceeds the value of Medicare’s standard benefit, as defined by law. Beyond that, plans may design the benefit as they see fit.

How is the benefit structured?
If you are accustomed to picking up 20 percent of the tab after Medicare pays its share of covered doctor bills, you’ll find cost-sharing isn’t as simple under Part D. Once you meet your Part D deductible for the year, Medicare pays 75 percent of the cost of covered drugs, and you pay the remaining 25 percent—up to a point. If you reach ,250 in drug costs in a year, you will hit a gap in coverage, sometimes called the “donut hole.” You will pay 100 percent of your drug costs up to ,100. At that point, “catastrophic” coverage kicks in. Medicare pays 95 percent of covered-drug expenses through the end of the year, and you pay five percent (or a small co-payment).

How do drug plans differ?
Within certain limits, each plan may design its own “formulary,” or list of covered drugs, and that list may change over time. In addition, drug plans may have different cost-sharing requirements. Some may choose to “tier” coinsurance or co-payments based on the cost of drugs—charging more for brands than generics, for example. Some plans may waive the premium or the deductible. Some may enhance the benefit by covering drugs that are excluded from Part D.

Where can I fill my prescriptions?
Every drug plan has its own pharmacy network. You must use a network pharmacy unless, say, you are traveling and need to fill an emergency prescription. If you live part of the year in another state, you may want to choose a national drug plan that maintains a network of pharmacies across the country. Regional drug plans generally cover prescriptions in a particular locality.

What will it cost me?
Typically, Part D enrollees pay a monthly premium, an annual deductible and coinsurance or co-payments for covered drugs. In 2006, the average premium is .20 a month, although your premium could be higher or lower depending on where you live and what plan you select. Plus, premiums are subject to increase every year. In 2006, your deductible may not exceed 0. Your out-of-pocket costs will vary depending on a number of variables, including the number of medications you take, the cost of your medications, your use of generics and your plan’s cost-sharing requirements. In 2006, you will have to spend a total of ,600 in out-of-pocket costs, including the deductible, before catastrophic coverage kicks in.

What costs count toward my out-of-pocket maximum?
Your “true” out-of-pocket costs are what you spend on formulary drugs in a year. If a medicine is not covered by your drug plan, your cost won’t count toward the out-of-pocket maximum (unless you’ve been granted an exception to the formulary). Likewise, what you spend on drugs that are excluded from Medicare coverage—prescription vitamins and minerals, for example—won’t count toward your maximum, even if your drug plan covers them.

How can I afford this coverage?
If your income is low, you may qualify for extra help paying for your prescription drugs. According to the Centers for Medicare & Medicaid Services, you may qualify if your income is less than ,355, or ,245 for a married couple living together and you resources are less than ,500 if you are single or ,000 if you are married and living with your spouse. These figures are based on 2005 income levels and 2006 resources.

How do I apply for extra help?
For an application or to apply over the phone, call Social Security at 1-800-772-1213 or apply online at www.socialsecurity.gov. To complete the application, you will need your Social Security number and financial information for you and your spouse (if you are married and living together), including information on bank deposits, pension income, investments or annuities and the face value of life insurance policies. Your house and car will not be counted toward your resources. The amount of help you get will depend on those calculations.

Can I still use my Medicare-approved drug-discount card?
Medicare offered drug-discount cards as an interim step to help beneficiaries pay for prescription drugs before Part D took effect. Those cards are only good until May 15, 2006 or until you enroll in Part D–whichever comes first.

How do I enroll?
You may enroll online at www.medicare.gov or call 1-800-Medicare for help getting enrolled over the phone. Of you may directly contact the health plan of your choice.

When can I enroll in Part D?
Enrollment for 2006 began on Nov. 15, 2005 and will continue though May 15, 2006.

Can I enroll after May 15, 2006?
Yes, the next enrollment period is Nov. 15, 2006, through Dec. 31, 2006. Coverage begins on Jan. 1, 2007. In subsequent years, Part D enrollment will begin each November 15 and run through the end of the year. Coverage begins the following January 1.

Is there any penalty for waiting to enroll?
If you enroll after you first become eligible, you may have to pay a higher premium. The premium increases at least one percent for every month that you wait to enroll, and you’ll pay this higher premium for as long as you have Medicare prescription drug coverage. So, if you wait six months to enroll, you’ll pay a penalty equal to six percent of the premium. A two-year delay will boost your premium by 24 percent.

Do all late enrollees pay a penalty?
No. If you had “credible coverage” under another drug plan, meaning that it was at least as good as Medicare Part D, you won’t have to pay a penalty. Some employer- and union-sponsored retiree drug plans meet that standard.

When does my drug coverage begin?
If you enrolled in 2005, your Part D coverage began on Jan. 1, 2006. If you enroll between Jan. 1, 2006 and May 15, 2006, your coverage begins the first day of the month after the month you enroll.

What if I have Medicare and Medicaid?
If you are a “dual eligible,” you will no longer get your drugs through Medicaid. Effective Jan. 1, 2006, Part D began picking up that coverage. You pay no premium or deductible, and there is no gap in coverage during the benefit year. If you did not select a drug plan, you are automatically enrolled in one.

What if I have retiree drug coverage through an employer or union?
You may keep it, and in some cases, that would be the better choice. Many employer- and union-sponsored health plans offer prescription drug coverage that is at least as good as Medicare Part D, if not better. Your plan sponsor can tell you how your drug coverage compares with Medicare’s and how your current coverage will be affected if you enroll in Part D.

Should I consider dropping my retiree coverage?
Not before consulting your plan sponsor. In some cases, if you join Medicare Part D, your employer or union may drop your retiree coverage, including your prescription drug benefits. Other plan sponsors may provide additional coverage to supplement Part D.

What if I have a supplemental insurance policy that covers prescription drugs?
You may be better off dropping that coverage and enrolling in Medicare Part D. The drug coverage provided by most supplemental, or “medigap,” policies is not as good as Medicare’s drug benefit. That means if you delay enrolling in Part D, you may have to pay a penalty.

What if I have military, veterans or federal employee health benefits?
In most cases, it’s to your advantage to retain prescription drug coverage through TRICARE (the military’s health program), the Department of Veterans Affairs or the Federal Employee Health Benefits Program. However, if you have limited income and resources, you may quality for extra help paying for prescription drugs through Medicare Part D. Before you change your coverage, contact your benefits administrator or your FEHBP insurer.

What happens to my state pharmaceutical assistance program?
If you are enrolled in a state program that subsidizes the cost of your prescription drugs, check with your state to find out how that program is coordinating with Medicare. Most states are eliminating benefits that available through Part D. Some are supplementing Part D by filling in the gap in Part D. A few have discontinued their programs.

How do I choose the best plan for me?
Choose a plan that covers all or most of the drugs you take. Make sure the plan provides access to the pharmacy you use or one that is convenient. If you get your drugs through the mail, look for a plan that offers mail-order. Don’t base your decision on a single cost feature, such as the premium or the deductible. You should estimate your total cost-sharing under each option when you compare plans. Medicare offers a tool on its web site that you can use to find drug plans serving your region and to compare costs, covered drugs and pharmacy options.

How often may I switch drug plans?
After May 15, 2006, you may change drug plans during the annual open enrollment period, which begins November 15 and continues through December 31. The change will take effect the following January 1. Under special circumstances, say, if you move or enter a nursing home, you will be allowed to switch plans at other times during the year. If you have Medicare and Medicaid, you will be allowed to switch plans as often as once a month. In that case, any change you make will take effect the beginning of the following month.

Where can I get more information?
The Centers for Medicare & Medicaid Services, the federal agency that administers Medicare, can answer your questions at www.Medicare.gov or by calling 1-800-MEDICARE.

SOURCE:- 2006 Healthology, Inc.

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