What You Should Know About Medicare Part D

Q: How much will Part D coverage cost?

A:Part D prescription drug plans are private insurance plans sold by insurance companies. The government has created a “standard plan” that sets guidelines for these private plans to follow. Part D drug plans are not required to follow the “standard plan”, but they must offer coverage that is at least as good. Part D drug plans have a great deal of leeway in designing their benefit, so costs and coverage levels can vary.

• If the total cost of your medication is more than $2,250 per year, you should be aware that there is a coverage gap in the government’s “standard plan” where Medicare will not pay for any part of your prescription drug costs. Under the “standard plan”, once your total drug spending reaches $2,250, you will be 100% responsible for paying for all of your medication until your total drug spending reaches $5,100. If you think you might fall into the coverage gap, you should shop around for a different prescription drug plan that better suits your needs.
• No matter which Part D plan you choose, you will be responsible for paying the following costs:
• Your monthly premium
• Your deductible - This is the amount that you must pay first, before your plan starts helping with your prescription costs. For example, if your plan has a $250 deductible, each year, you must pay the first $250 in drug costs before the plan begins covering any of your medication.
• A portion of the cost of each drug you purchase
• Under most Part D plans, you must pay a percentage of the cost of each prescription drug you purchase. The plan will pay for the rest.
• Some Part D plans may choose instead to charge a fixed dollar amount for each prescription drug rather than splitting costs on a percentage basis. In these plans, you will pay a set price for each prescription

Q:What if I can’t afford to pay for a Part D plan?

A: There is help available for people with lower incomes with few savings or other assets. Singles with incomes lower than $14,355 and couples with incomes lower than $19.245 may qualify for reduced or eliminated premiums, reduced or eliminated deductibles, and reduced copay amounts. Also, the coverage gap described above may be eliminated for some people in need. You will need to fill out an application form to apply for help. If you have not received this application form in the mail, contact your local Social Security Administration office.

Q: Can I have more time to decide whether a Part D prescription drug plan is right for me?

A: Unfortunately, Medicare will charge you a higher premium if you wait too long to sign up for Part D. If you are eligible for Medicare Part D right now, you have until May 15, 2006 to enroll by signing up for a plan. If you wait until after the May 2006 deadline, you will be subject to a 1% penalty for each month that you delay in joining. So if you wait until May of 2007 to sign up, you will have to pay the base premium PLUS a 12% late enrollment penalty each month for your Part D plan.