Medicare Part D - A Primer for Seniors

By Jan. 1, 2006, millions of older Americans will begin getting significant relief for prescription drug costs through Medicare Part D. But, what is Medicare Part D and how can it help seniors?

This is a result of the Medicare Modernization Act of 2003, which Dr. Mark Stratton, professor of Pharmacy and director of the Geriatric Pharmacy Program at the OU College of Pharmacy, called the most revolutionary change to Medicare since it began in 1964.

"At last, a prescription program that will provide relief for millions of Americans," Stratton said. "But, people do need to be educated about the program so they can get the best plan for them."

Sign Up

Elders who sign up for the Part D benefits beginning November 15 will see their benefits start on Jan. 1, 2006, he said, adding older adults have until May 15, 2006 to sign up for the benefits without penalty.
Medicare has indicated it will contact all eligible individuals about enrolling in the program, complete with a list of all providers and plans, in the fall.

Every U.S. citizen age 65 and older who is eligible for Medicare is also eligible for Medicare Part D, which was preceded by the Medicare discount cards, Stratton explained. He added the Medicare discount cards are to be phased out by May of 2006.

Stratton also stressed it is important for eligible older adults to sign up by the May 15, 2006 deadline because their costs will increase each month if they don’t.

Privatized Prescription Plans

"Medicare Part D is significantly different from Medicare Part A or Part B in the respect that it has been privatized," Stratton said. "For standard Medicare beneficiaries there will be several prescription drug plans (PDPs) from which to choose. For seniors who are on both Medicare and Medicaid, they will automatically be placed in a PDP."

It is important to understand that Medicare prescription drug plans provide insurance coverage for prescription drugs. So as with other insurance, a person pays a monthly premium and his or her share of the cost of prescriptions. Those costs will vary depending on the drug plan chosen. The plan selected will also determine which pharmacies a person can use. However, all plans will have to provide at least a minimum level of coverage, which Medicare sets.

Multiple insurance and other companies can offer PDPs to seniors. So it is important to determine which plan best suits your prescription needs before signing up.

The Costs & Coverage

For seniors who are not in low-income categories, Medicare said the monthly premium will be about $32 per month, which will vary slightly according to the plan selected. After the first $250 in annual prescription drug purchases, seniors can expect each year:

• To pay 25 percent of their yearly drug costs from $250 to $2,250, with the plan paying the other 75 percent of the cost;
• To pay 100 percent of the costs from $2,251 until out-of-pocket expenses reach $3,600, then
• To pay 5 percent of drug costs (or a small co-payment) for the rest of the calendar year after spending $3,600 out-of-pocket and the plan pays the rest.

If a senior already has prescription drug benefits through their insurance, they will need to prove their insurance benefits are better than the Medicare benefits, Stratton said.

Older adults who are on both Medicare and Medicaid and other low-income, low asset seniors will qualify for additional help with their costs and will have low co-pays for their prescriptions.

"Signup begins on November 15, but if you don't sign up by May 15, you will see an increase of 1 percent per month in the monthly premium," he said. "So, if you sign up on June 15, your monthly premium will be $32.52 per month and increase 1 percent monthly thereafter. It really is worth people's time to educate themselves about this program and make their decisions early."

More Information Available

Stratton said there is more information available to older adults to use when looking at their options. He recommended that seniors use the Medicare website at www.medicare.gov or the Kaiser Family Foundation website on Medicare at www.kkf.org to help with their decision-making. In addition, he said, Medicare officials can be reached at 1-800-633-4227 to help individuals and couples make their choices.

Additional notes:

Things to remember about Medicare Prescription Drug Plans

The plans start Jan. 1, 2006

For most seniors, there will be several plans from which to select coverage. Remember, this part of Medicare is privatized so read all options carefully.

Enrollment is not automatic. To receive benefits, seniors must enroll if they want coverage.

Once enrolled, seniors will pay a monthly premium.

Low income, low asset seniors will have additional help with their costs.

For more information, visit www.mediare.gov or the Kaiser Family Foundation web site at www.kff,org, or call Medicare at 1-800-633-4227.