Medicare Has Changed and Senior Must Make a Decision

Like it are not, Medicare has changed and in a matter of weeks senior citizens will face a decision about joining a drug discount plan sponsored by Medicare.

On May 3, private companies will begin marketing their “Medicare-approved drug discount cards” to seniors and the disabled that are eligible for Medicare. More than 100 companies have already applied to supply these cards and “endorsements” by Medicare should be made by the end of this month. This is a voluntary program – you do not have to buy one of these cards, which will cost no more than $30 per year. They are expected to offer discounts in the range of 10 to 15 percent, which Medicare says will save the average participant $140 to $210 per year - based on Medicare’s estimate that the average senior spends $1,400 a year on prescription drugs.

Take your current spending on prescription drugs for last year, multiply it times, say 12 percent, and if the card will save you more than the $30 annual fee, it may be worth it.

But, you may do even better if you match your drug needs with the discount card offering the best discounts on your specific prescriptions. All cards will not offer discounts on all drugs. Some are expected to provide a list of drugs covered by their plan. The idea being that they can negotiate better discounts by being selective with drug suppliers. The government says they expect some individual drug discounts may be as high as 25 percent. Look for the card offering the best discount on the drugs you need.

Another thing to watch for in reviewing these card options is to see if the card offers discounts on over-the-counter (OTC) drugs you need. The card companies can offer this option, although Medicare does not require it.

You can also keep any drug discount cards you now hold. Most existing cards are assumed to be below the standards for "Medicare-approved" status, but they may meet your specific needs.

Almost everyone with Medicare can join a Medicare-approved drug discount card. It doesn’t matter whether you have Original Medicare (Part A and/or Part B), a Medigap policy, a Medicare managed care plan, or another kind of Medicare health plan. If you have a Medigap policy that also covers prescription drugs (plans H, I, or J), you can keep that plan, as long as you don’t enroll in Medicare’s prescription drug coverage. The only people who can’t enroll in a Medicare-approved drug discount card are those who have outpatient drug coverage through Medicaid.

You also do not have to enroll in a drug plan now. Enrollment will continue through 2005. If you do join now, you can change plans in 2005.

The most popular – and helpful – addition to Medicare, however, is special assistance for low-income seniors. This program is called the Transitional Assistance program. It provides up to $600 in an annual subsidy for Medicare beneficiaries whose incomes do not exceed 135 percent of the federal poverty level ($12,569 for individuals, $16,862 for couples for 2004). When applying the $600 toward prescription drug purchases, beneficiaries at or below 100 percent of poverty ($9,600 for singles, $13,000 for couples) will pay 5 percent coinsurance, and beneficiaries between 100 and 135 percent of poverty will pay a 10 percent coinsurance.

The discount card and $600 in transitional assistance can be used to purchase nearly all prescription drugs available at retail pharmacies. Syringes and medical supplies associated with the injection of insulin, such as needles, alcohol, and gauze, are also included. The $600 cannot, however, be used for over-the-counter medicines.

The downside on this program is the considerable paper work that is required to prove you qualify for the income limit.

The biggest losers in this bill may be the people on both Medicare and Medicaid - many will have a new drug copayment to pay. It seems small - $1 for generics and $3 for name brands - but most of these people have virtually no money.

These voluntary cards are being offered until December 31, 2005. The new comprehensive prescription drug benefit begins January 1, 2006.

Starting in 2006, Medigap supplement policies will include two new kinds of benefit packages that you can choose to buy, to help with out-of pocket costs. No new Medigap policies with drug coverage (plans H, I, and J) will be sold. If you have a Medigap policy with drug coverage, you can choose to renew it. Or, if you choose to join a Medicare prescription drug plan in 2006, you won’t be allowed to renew your current Medigap policy.

All people with Medicare will be able to enroll in new plans for 2006 that cover prescription drugs. Plans might vary, but in general, this is how they will work:

- You will choose a prescription drug plan and pay a premium of about $35 a month.

- You will pay the first $250 (a "deductible").

- Medicare will pay 75% of drug costs between $250 and $2,250 in drug spending. You will pay only 25% of these costs.

- You will pay 100% of drug costs above $2,250 until you reach $3,600 in out-of-pocket spending.

- Medicare will pay about 95% of the costs after you have spent $3,600.

Medicare is preparing to launch an extensive media campaign to help educate the public. Most importantly, they plan to mail information to all Medicare-eligible persons. Their helpline, 1-800-MEDICARE, will increase their telephone operators from 386 to 1,330 to handle the expected phone calls of almost 13 million. Their Website – www.medicare.gov - will continue to be a key source of information. They plan to add a price comparison tool that will provide information on the drug prices and discounts in every area of the country.

For more helpful information check the links on our Prescription Drug Bill page.

Look specifically for our links to the National Council on Aging (www.ncoa.org) and the Kaiser Family Foundation (www.kff.org).

Published by NewTechMedia.com - NewTechMedia.com

E-mail - editor@SeniorJournal.com