Do You Receive Your Healthcare Coverage From Your Present or Past Employer? If So, Are You Confused About What You Should Do About the New Medicare Drug Plan?
by Betty Soldz
If you have been watching or listening to the media you know that those who have Medicare coverage are being urged to sign up for Medicare Part D, the new prescription drug benefit which goes into effect January l, 2006.
Medicare Prescription drug coverage will be offered by private companies approved by Medicare. Most plans will have a deductible of up to $250.00 and a monthly premium which will average $32.00 a month in 2006. November 15th is the date when signing up for this new Government prescription drug plan begins.
Unfortunately, even though this new plan is being touted by Medicare and the Bush Administration as a great new benefit for seniors, the program is so complex that few of those eligible for coverage understand their choices and whether they should change from the coverage they now have.
Ron Pollack of Families USA stated recently “Medicare recipients are faced with the daunting task of analyzing the fine print of anywhere from 27 to as many as 300 different plans. Seniors are required to navigate a confusing array of choices comparing different premiums, copayments, deductibles, coverage gaps, formularies, drug prices, and pharmacy networks. The premium will differ between plans. You will also pay a share of the cost of your prescriptions.” In other words, trying to figure out what to do will give you such a headache you’ll need a prescription.
The following is just one important example of a question you may have about what to do if you are a Medicare recipient now covered by your current or ex-employer or union. Should you stay with coverage by your ex-employer or sign up for Part. D Medicare Prescription Drug Benefit?
Although each person’s circumstance is different there are some general guidelines for this group of seniors.
Don’t rush into making a decision! If you have been getting your healthcare coverage through your current or former employer or union, you should have received a notice by November 15th informing you if your coverage is 'creditable,' which means the coverage is as good or better than the coverage you would receive by signing up for Medicare Part D. They must also tell you if the plan you now have will change as a result of Medicare drug coverage.
If your employer’s coverage is 'creditable,' you do not have to do anything. You can continue your employer’s coverage. If you desire to change your coverage later there will be no late penalty to join the Medicare prescription drug plan, as long as you are not without comparable drug coverage for more than 63 days.
You should, however, be aware of the following. Some employer plans that are providing 'creditable' coverage are telling retirees that if they enroll in Part D they will lose their entire health plan. It is important to understand that if one loses retiree health coverage, you can’t get it back. Therefore, it is important to stay with your current coverage until you are comfortable with any decision on changing it.
If your employer’s coverage is not 'creditable,' you can still keep it but you would then owe a penalty (1% per month of the amount of the premium) if you sign up for Medicare prescription coverage after May 15th, 2006.
Because there are errors in the information being put out to Medicare recipients, perhaps one should consider not switching until all the information is out and correct. Check the formulary of any insurers being considered to be sure that your prescriptions are covered. Even if covered, the insurer can drop drugs from their formulary by giving 60 days notice. You, however, can only change your insurer once a year. Thus you could be stuck paying monthly premiums for a plan that will not cover some of your drugs.
Still another problem has come to light. According to the Medicare Rights Organization, during a recent sampling of Medicare drug plan formularies by the American Society of Consultant Pharmacists, it was found that some plans will impose quantity limits for cholesterol-lowering statins and antidepressants. There may be major differences in the drugs covered, how well they are covered, or even if prior authorization is needed.
Lastly, if, as surveys seem to show, many of those eligible to sign up for the program do not do so, the program will probably be used mostly by those who need a large number of prescriptions or expensive drugs. This may result in much higher costs to the recipients in the future.
Also, although some plans do not have a deductible this year, it may very well be that this is only to encourage a large number of those eligible to sign up for their plan. Once they have a share of the market they probably will change this.
Remember, enrollment in Medicare Part D plan is voluntary. You do not have to do anything. Take your time. If your employer’s coverage is 'creditable' you will be able to switch plans without a penalty. Hold on to your employer's plan for now and get more information.
Three New Reports From the Office of Inspector General, Department of Health and Human Services (PDFs)
Assessment of Sponsors’ Materials Under the Temporary Medicare-Approved Drug Discount Card Program (2 MB)
Temporary Medicare-Approved Drug Discount Card: Beneficiaries’ Awareness and Use of Information Resources (824 KB)
Analysis of Drug Prices (204 KB)