How the Plan Works
Yes, it's more government gobbledygook. But the new Medicare drug benefit--no matter how daunting it seems--can be a cost saver for many seniors
The list of drugs covered by the policy--called a formulary--will also vary by plan and insurer, though it, too, is subject to some basic requirements. A plan must cover at least two drugs in each class (a group of similar drugs addressing a medical problem, like statins for high cholesterol) and most of the drugs in six classes: antidepressants, antipsychotics, anticonvulsants, antiretrovirals to treat HIV and AIDS, immunosuppressants, and cancer drugs. The pharmacies that accept the plans will also vary.
Of course, like most things in life, you get what you pay for: The more generous the plan--the lower the deductible, say, or smaller the copay--the more likely that the plan will carry a higher price tag. Monthly premiums range from nothing to more than $80 (the average is $32), and in every state but Alaska, there will be at least one plan with a premium of less than $20 a month. Seniors with few liquid assets and annual incomes of less than $14,355 will very likely qualify for government subsidies to help make plans more affordable. Indeed, the government estimates that as many as 1 in 3 Medicare recipients will qualify for some kind of aid.
Unspoken details. With all these moving parts, variations on the basic theme are nearly endless. Seniors in some states will have nearly 50 plans to choose from. As TV ads and mailers start touting the plans, it's a good bet that they won't mention important things like coverage gaps. "I'm offering a night of drinks for any staff member who can find any mention of 'doughnut hole' in any marketing material," says Robert Hayes, president of the Medicare Rights Center, a national nonprofit group.
Katharine Roberts, a 79-year-old in Manhattan, has been an activist on healthcare issues for years, but even she is perplexed--and worried. She fears that she'll have to sign up for coverage with the Medicare HMO she's now part of, and possibly not have some of her drugs covered, or switch to a plan that does cover her drugs but be forced to change doctors. "I haven't a clue," she says. "I feel like it's been taken out of my hands."
Experts advise seniors to explore a range of plans from several insurers. "Start the process yourself, and when you've got an idea of what might help, go to an insurance counseling program to double-check," says Bonnie Burns, policy specialist with the nonprofit California Health Advocates in Sacramento. Enlisting help from a friend, family member, or Medicare counselor (800-MEDICARE, or 800-633-4227) is also a good idea. A State Health Insurance Assistance Program, or SHIP, offers one-on-one counseling. A list of programs can be found at shiptalk.org.
Timing is of the essence, as the new coverage takes effect January 1. The first enrollment period begins November 15 and ends May 15, 2006. After that, Medicare-eligible seniors will be able to sign up only during certain times and may face penalties. Part D enrollees who end up disappointed in their plans can change their minds and choose another plan once a year, as the open enrollment period will be November 15 through December 31 each year. Let the search begin.
NOV. 15,2005: The Medicare Part D enrollment period begins. Sign-up runs through May 15, 2006.
With Josh Fischman
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