Understanding Medicare Part D: Prescription Plans
The six-week enrollment period for the Medicare prescription drug plan is coming up soon - enrollment begins November 15 through December 31, 2007 for the 2008 plans. Medicare's drug plans are subsidized by the US federal government and offered through private insurers. In January, 2006 Medicare enacted Part D as a supplemental insurance plan for seniors to offset the costs of increasingly expensive prescription medications. Part D is an optional plan in which the insured (consumers) pay a premium each month and Medicare pays for prescriptions. If you decide not to enroll in Part D when you are eligible, you may be charged a penalty for enrolling later on. The initial enrollment period (as of this writing) is the period three months prior to and three months after your 65th birthday. If you are disabled you may enroll three months before through three months after your 25th month of disability. This is called the Initial Enrollment Period. If you opt out of the Initial Enrollment Period and choose to enroll later, you may calculate your penalty by 1% of the national average premium for the year you choose to join and multiply it by the number of months you were eligible to join but didn't. Try explaining this to your grandkids when they ask why they need to learn math.
Insurance is confusing, and government subsidized insurance even more so. The Centers for Medicare and Medicaid Services has a 116 page publication (available online or you can request it by mail by calling 1-800-633-4227) entitled Medicare & You 2007. If you have prescription drug coverage through your or your spouse's employer or union, check with the benefits administrator before enrolling in any Medicare Plans as it may impact your coverage. If you drop your employer or union group coverage, you may not be able to get it back. If you have prescription drug benefits through the VA, Tricare or the Federal Employee Health Benefits Program (FEHBP) you may not need Part D, although if you choose to enroll, it could offset your costs and copayments. A list of the stand-alone Medicare Prescription D plans may be found here.
Plans are regional and it is important to compare Medicare drug plans offered in your area before enrolling. The cheapest premium does not always mean your lowest cost option. Look over each plan and the specific drug coverage rules for filling prescriptions (formulary). Compare your list of prescriptions against monthly premiums, deductibles, copayments and coinsurance. (And you thought you were retiring?). What about the convenience factor? Does the plan you want work with your pharmacy of choice, or send your medications through the mail? If you spend your winters in a different place, will the plan you choose accommodate that? If you move out of your Medicare plan's coverage area, you may enroll in a new plan as early as the first day of the month before you move.
Be aware of certain rules that your plan may follow - prior authorization, limited quantities of refills (important to pre-plan if you are going on vacation or out of the country for any length of time) and step therapy (lower cost medications must be tried first unless Medicare grants you an exception). The premium for your Part D prescription plan can be deducted from your Social Security benefits, from a savings or checking account, or you can opt to receive a monthly bill in the mail. Medicare.gov has a Medicare Prescription Drug Plan Finder to help you find the plan that is best for you. Review your plan now and enroll early to take advantage of your best options.
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