Decision Time
If you've put off trying to figure out Medicare Part D, the clock is ticking
Mary Favale is a woman on a mission. The 67-year-old resident of Willimantic, Conn., is talking to neighbors in her senior citizens apartment building, hoping to get them to enroll in Medicare's new prescription drug benefit. Fail to sign up for Part D within the next couple weeks, she says, and you might really regret it. After all, most of the costs of Favale's prescriptions now are covered; she thinks she'll save about $600 this year. And those who miss the May 15 deadline will have to wait months to change their minds--and then pay extra. Still, she says, people tell her, "It's too confusing. I'm not going to deal with it."
Favale's friends have plenty of company. A whopping 7 million eligible Medicare beneficiaries--out of 16 million likely candidates--have yet to enroll in Part D, according to the government. (An estimated 27 million don't have a choice to make; they're covered by employer or government programs, for example.) Granted, not all seniors immediately need the new insurance, especially if they don't take many medications. But anyone without drug coverage should examine the benefit, experts say, because the potential for savings is substantial. Low-income seniors stand to benefit most. People who don't have many assets and whose income is no more than 150 percent of the poverty level (right now, that would equal $14,364 for an individual and $19,248 for a couple) get help from the government meeting their deductibles, premiums, and drug costs. "If a person is of modest means and on a lot of drugs, it certainly would be worthwhile to look into it," says Jerry Avorn, chief of the division of pharmacoepidemiology at Brigham and Women's Hospital in Boston.
Ouch. Moreover, procrastinators who come knocking after the deadline will pay a penalty for waiting. For each month that passes after May 15, the premium ratchets up by 1 percent of the average national premium (except in the case of low-income beneficiaries, whose deadline has been extended until the end of this year). A person who signed up on November 15, when the next window of opportunity opens, would pay about an extra 7 percent of the average premium, or probably about $2.25 more per month.
So why the hesitation? Many seniors are overwhelmed at having to choose from among 40-plus plans. The program relies on private health insurance plans, each a bit different: Some have lower premiums but require enrollees to pay more for drugs; some cost more but cover more medications. Plans with higher premiums also tend to provide coverage through the so-called doughnut hole, the point at which help normally stops for a while. In a basic plan, once the total cost of medication for the year reaches $2,250, enrollees have to shoulder any further hit themselves until they reach $5,100. Then catastrophic coverage kicks in and picks up all but a fraction of the cost.
"There's so much information out there that it becomes gobbledygook," says Gloria Shreve, 70, of San Mateo, Calif. "I felt like I was swimming through Jell-O." She asked her sons for help, but they were baffled, too, and didn't have the time to figure out the right solution. Finally, she enlisted California's Health Insurance Counseling and Advocacy Program, a volunteer organization that helps seniors sort through their choices. HICAP is California's version of the State Health Insurance Assistance Program; each state has a SHIP organization (you can find yours at www.shiptalk.org) that seniors can call for help. Though Shreve doesn't take many prescriptions now, she had breast cancer five years ago; just in case, she chose a BlueCross plan that will cover her if her health deteriorates. "I can't tell you what relief I had when I mailed my envelope," she says.
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