Everyone Needs to Make a Decision This Year

Beginning January 1, 2006, Medicare will offer insurance coverage for prescription drugs through Medicare Prescription Drug Plans and other health plan options. Insurance companies and other private companies work with Medicare to offer these plans. If you join by December 31, 2005, you won't miss a day of coverage.

Because of changes in the Medicare Program, everyone with Medicare has to make a decision about prescription drug coverage this year. To learn more about these changes.

Even if you don't use a lot of prescription drugs now, you should still read the information about Medicare prescription drug coverage in this handbook and consider joining. As we age, most people need prescription drugs to stay healthy. For most people, joining now means you will pay a lower monthly premium in the future since you may have to pay a penalty if you choose to join later

Medicare & You 2006 Centers for Medicare & Medicaird Services Handbook.
This is the main hand book on the new Prescription Drug and Health Plan options

Here are the steps I took to determin the best plan for my mother.

1. Click on "Find a Medicare Prescription Drug Plan."
   Follow the steps and it will walk you through each step you need to make an informed decession. You will need your Social Security Card to complete this
• Search Options
• Current Coverage Information
• Review Plan Results & Options
• Medication & Pharmacy Selection
• Review Plan Details & Enroll

 

If you don't have all the Personal Medicare Information, at least prepare a list of drugs you are using and look at what percentage each plan has.

• Formulary Finder for Prescription Drug Plans

Prescription Drug Coverage: Basic Information

What is Medicare prescription drug coverage?
Medicare prescription drug coverage is insurance that covers both brand-name and generic prescription drugs at participating pharmacies in your area. Medicare prescription drug coverage provides protection for people who have very high drug costs.
 

Who can get Medicare prescription drug coverage?
Everyone with Medicare is eligible for this coverage, regardless of income and resources, health status, or current prescription expenses.
 

When can I get Medicare prescription drug coverage?
You may sign up from November 15, 2005 to May 15, 2006. If you join by December 31, 2005, your coverage will start January 1, 2006, and you won't miss a day of coverage. If you don't sign up when you are first eligible or by May 15, 2006, you may pay a penalty. Your next opportunity to enroll is from November 15, 2006 to December 31, 2006.
 

How does Medicare prescription drug coverage work?
Your decision about Medicare prescription drug coverage depends on the kind of health care coverage you have now. There are two ways to get Medicare prescription drug coverage. You can join a Medicare prescription drug plan or you can join a Medicare Advantage Plan or other Medicare Health Plans that offer drug coverage.

Whatever plan you choose, Medicare drug coverage will help you by covering brand-name and generic drugs at pharmacies that are convenient for you.

Like other insurance, if you join, you will pay a monthly premium, which varies by plan, and a yearly deductible (no more than $250 in 2006). You will also pay a part of the cost of your prescriptions, including a copayment or coinsurance. Costs will vary depending on which drug plan you choose. Some plans may offer more coverage and additional drugs for a higher monthly premium. If you have limited income and resources, and you qualify for extra help, you may not have to pay a premium or deductible.
 

Why should I get Medicare prescription drug coverage?
Medicare prescription drug coverage provides greater peace of mind by protecting you from unexpected drug expenses. Even if you don't use a lot of prescription drugs now, you should still consider joining. As we age, most people need prescription drugs to stay healthy. For most people, joining now means protecting yourself from unexpected prescription drug bills in the future.
 

What if I have a limited income and resources?
There is extra help for people with limited income and resources. Almost 1 in 3 people with Medicare will qualify for extra help and Medicare will pay for almost all of their prescription drug costs.
 

Prescription Drug Coverage: Things to Consider

To get Medicare coverage for your prescription drugs, you must choose and join a Medicare drug plan. Regardless of how a Medicare drug plan decides to offer this coverage, there are some key factors that may vary. Some of these factors might be more important to you than others, depending on your situation and drug needs. These factors are:

Cost

Premium
This is the monthly cost you pay to join a Medicare drug plan. Premiums vary by plan.
Deductible
This is the amount you pay for your prescriptions before your plan starts to share in the costs. Deductibles vary by plans. No plan may have a deductible more than $250 in 2006.
Copayment/Coinsurance
This is the amount you pay for your prescriptions after you have paid the deductible. In some plans, you pay the same copayment (a set amount) or coinsurance (a percentage of the cost) for any prescription. In other plans, there might be different levels or "tiers," with different costs. (For example, you might have to pay less for generic drugs than brand names. Or, some brand names might have a lower copayment than other brand names.) Also, in some plans your share of the cost can increase when your prescription drug costs reach a certain limit.
 

Coverage

Formulary
A list of drugs that a Medicare drug plan covers is called a formulary. Formularies include generic drugs and brand-name drugs. Most prescription drugs used by people with Medicare will be on a plan's formulary. The formulary must include at least two drugs in categories and classes of most commonly prescribed drugs to people with Medicare. This makes sure that people with different medical conditions can get the treatment they need.
Prior Authorization
Some drugs are more expensive than others even though some less expensive drugs work just as well. Other drugs may have more side effects, or have restrictions on how long they can be taken. To be sure certain drugs are used correctly and only when truly necessary, plans may require a "prior authorization." This means before the plan will cover these prescriptions, your doctor must first contact the plan and show there is a medically-necessary reason why you must use that particular drug for it to be covered. Plans might have other rules like this to ensure that your drug use is effective.
Coverage Gap
If you have high drug costs, you may consider which plans offer additional coverage until you spend $3,600 out-of-pocket. In some plans, if your costs reach an initial coverage limit, then you pay 100% of your prescription costs. This is called the coverage gap. This "gap" in coverage is generally above $2,250 in total drug costs until you spend $3,600 out-of-pocket. Some plans might offer some coverage during the gap. Even in plans where you pay 100% of covered drug costs after a certain limit, you would still pay less for your prescriptions than you would without this drug coverage.
 

Convenience

Drug plans must contract with pharmacies in your area. Check with the plan to make sure your pharmacy or a pharmacy in the plan is convenient to you. Also, some plans may offer a mail-order program that will allow you to have drugs sent directly to your home. You should consider all of your options in determining what is the most cost-effective and convenient way to have your prescriptions filled.
 

Peace of Mind Now and in the Future

Even if you don't take a lot of prescription drugs now, you still should consider joining a drug plan in 2006. As we age, most people need prescription drugs to stay healthy. For most people, joining now means you will pay a lower monthly premium in the future since you may have to pay a penalty if you choose to join later. You will have to pay this penalty as long as you have a Medicare drug plan. If you reach the point where you have spent $3,600 out-of-pocket for drug costs during the year, the plan will pay most of your remaining drug costs. This protection could start even sooner in some plans.
 

Prescription Drug Coverage: Common Situations

Click on this to get answers to common questions

Medicare Drug Benefit Calculator

Access To Benefits Coalition
 

Basic Information

Things to Consider

Common Situations

Cost Estimator

Landscape of Local Plans
 

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Copyright 1999 Jerry E. Bartram, CPA All rights reserved.

Web designed and authored by Jerry E. Bartram, CPA Last Updated 02/08/08

IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, I inform you that any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any matters addressed herein."