Medicare Part D is for prescription drug coverage available to all people with Medicare. We are now more than a month into the new Medicare Part D program and there seems to be more confusion now then ever.
The year was 2004. President Bush was running for re-election and he wanted to pass a prescription drug bill for seniors. The trick was to pass a bill that would cover all seniors but not cost the government too much money. The Republicans wanted this bill passed and the Democrats didn't fight it. So, this is a case where you can blame both parties for the passage of this.
What the government did was take a very complex medical system and said, "How much more confusing can we make it?"
I will try to explain as simply as possible how this program works and define some of the more common terms used like dual eligible, co-pays, deductibles, out of pocket and donut holes.
Medicare is a federal health insurance program. It covers people 65 and over, people under 65 with certain disabilities and people of all ages with end-stage renal disease. Many people ask what is the difference between Medicare Parts A, B and D?
Part A is Medicare hospital insurance, Part B is Medicare medical insurance (physician visits, etc.) and Part D is outpatient prescription drug coverage (I don't know what happened to Part C).
Signing up for the plan is relatively simple. Enrollment started November 15, 2005 and you have until May 16, 2006 to enroll. If you do not enroll by May 16 and decide at a later date to enroll, you will be charged a penalty of 1% extra in premiums for every month after the deadline (e.g., if you are 3 months late you will pay an extra 3% on your premium every month).
If you have another policy that covers your prescriptions, you do not have to take out the Medicare policy. If you decide to enroll in the plan at a later date you will not be charged a penalty. In the future for newly eligible patients, enrollment will begin three months before their birth month and close three months after their birth month.
Deciding which plan to sign up with can be difficult. You can start by calling 1-800-MEDICARE or go to www.medicare.gov and click on the Medicare Part D link.
Medicare turned the actual running of the plans over to commercial insurance companies (the only people I trust less than politicians are insurance companies). There are approximately 185 different plans available nationwide. Before we decide which plan is best for you let me explain how the basic plan will work
Medicare Part D provides drug coverage to all people with Medicare if they want it (you do not have to sign up if you do not wish to). If you decide to take out the Medicare Part D plan, it will cost approximately $35 a month (the cost and coverage of each plan may vary) that is approximately $420 a year. There is a $250 deductible. This means you pay 100% of the drug cost until you spend $250 in prescriptions. Your pharmacy will take care of all the paperwork.
After you have spent $250, Medicare will pay 75% of all your drug costs and you will pay 25% (e.g., on a $100 prescription Medicare will pay $75 and you will pay $25). This will continue until total medication costs have reached $2,250. After you reach $2,250 Medicare pays zero. We now enter what is known as the coverage gap or donut hole.
After you reached $2,250 you will pay 100% of drug costs until you have an out-of-pocket expense of $3,600. The out-of-pocket expense is the total amount of money you have spent to purchase medication in the program, which includes deductibles and co-pays.
Once you reach $3,600, Medicare will now pay 95% of all prescriptions for the rest of the year. The average person who spends between $2,500 and $4,000 a year on prescriptions will save about $1,100. Itís not great but better than nothing. Patients who spend over $5,000 a year will see a much greater savings.
Things to Do
When selecting a plan remember each plan may cover different drugs at different rates. When selecting a company, the first thing to do is make sure the pharmacy you wish to use accepts that plan.
Make two lists of all the medications you take (this is very important with patients who take a lot of different medications). The first list put in order of importance. Place the most important medications on top and the least important medication on bottom.
In the second list, place the most expensive prescription on top and the least expensive prescription on the bottom.
Now call the plan of your choice and make sure they cover all or most of your medications. If you sign up with a plan and they don't cover a certain medication, you have a few options.
The first option is to call them and ask for a copy of the Medicare Bill of Rights and the procedure for getting an exemption for your medication. All plans must have a procedure in place to deal with patients that have medically necessary prescription that is not covered by the plan.
If the insurance company denies your request for an exemption find out what medication is covered by them to treat your condition. Speak to your doctor to check if s/he feels this medication is appropriate for you. Remember just because the insurance company recommends it doesn't mean their choice is in your best interest. Many insurance companies are less concerned with your health and more concerned about how much money they make.
If you do not wish to change medications you have the option of paying for the prescription yourself or changing plans. You may change plans once every year. Also, not every plan is accepted in every state. If you have dual residency like if you spend the summer in New York and the winter in Florida, make sure the plan you choose is accepted in both states.
Many patients are referred to as dual-eligible. Dual eligibility refers to patients that have another insurance plan and are also eligible for Medicare Part D. Those of you who have Medicare Advantage programs such as Oxford, Aetna, U.S. Healthcare, etc. have probably received a new card and have seen an increase in your prescription drug coverage. This is because your insurance company and Medicare are working together.
Those of you who have Medicaid have been told to select a plan or one will be assigned to you at random. It is very important if you accept the plan assigned to you that you call them and make sure the medications you take are covered by the plan.
Remember that Medicaid will only cover drugs that are not covered by Medicare. They will not cover medications that the plan rejects.