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Medicare Part D Update
October 17, 2005
What are the important dates to remember?
- Open Enrollment Starts: November 15, 2005 and continues until
May 15, 2006
- Enroll by December 31, 2005 and Coverage begins, January 1, 2006 or
- Enroll between January 1, 2006 and May 15, 2006
and Coverage begins on the first day of the month after enrolling
:: Where is all the Medicare Part D information?
:: How can I best prepare myself while I am waiting for more information?
-- A Decision Making Outline
:: Must I buy my Part D plan from my current Medicare Supplement provider?
:: A Quick Comment on VA Benefits
:: Take your Time -- But not too much Time
:: Preview -- Selected Medicare Part D Plans to be Featured
Where is all the Medicare Part D information?
The current $64,000 question is: "Are my prescription medications covered by Medicare Part D?"
As a number of Newsletter readers have already discovered, some of the most important information covering Medicare Part D is simply not available. In particular, many of you are asking to review the much-awaited Medicare Part D plan formularies (or plan drug lists).
We have been in direct contact with many of the top national Medicare Part D providers and are just now beginning to receive the drug lists ourselves (as well as other plan information). This means, that the complete set of drug lists and other plan designs should be available publicly in the next few days. My apologies to those Newsletter readers who have been waiting patiently for more information since July.
In the meantime, Medicare/CMS has put together a Region-by-Region plan comparison that you can download. This CMS comparison does not compare plans drug-for-drug. It does however show the basic plan designs and premiums.
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How can I best prepare myself while I am waiting for more information?
-- A Decision Making Outline
So now that everyone needs to wait yet a few more days until all of the prescription drug lists are available, you can use this "free time" to best prepare for your Medicare Part D enrollment decision. As we noted in an earlier Newsletter, there are a series of factors that you must consider when searching for the right Medicare Part D plan. We have expanded that earlier list with a few new items below:
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A. Basic Consideration
- Are you already covered by a "creditable" prescription drug program?
- Do you have VA coverage? (see #4 below)
- Do you have coverage from your previous employer or union?
- Do you have any other plan that is as least as good as Medicare's basic drug plan coverage? (a good question for your existing plan's administrator)
- Can this other creditable prescription drug coverage be coordinated with the Medicare Part D program? (another good question for your existing plan's administrator)
- Determine your CMS region -- the US is divided into 34 regions for purpose of Medicare Part D implementation -- for instance, Pennsylvania and West Virginia are in PDP Region 06. (The CMS website provides a nice PDP Region Map for your convenience.)
- Once you have your region, determine which plans are available in your area. (Please note: We will be providing a list of national Medicare Part D providers on our website with a comparison per region.) Please also take a look to the local Medicare Part D plans in your region and you may find that your nearby HMO or PPO can also provide you with the right plan.
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B. Your Deductible Preferences
- Are you comfortable with a $250 initial deductible?
- Would you prefer a plan with "first dollar coverage" or no initial $250 deductible? (note: You may pay a higher premium for a plan with "first dollar" coverage -- see "budget" below.)
- Would you prefer a plan with Donut Hole coverage? Some plans will be offering coverage to "close-up" the Donut Hole. These plans may have a higher monthly premium.
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C. Your Coverage Preferences -- Would you prefer
- Co-Insurance (the beneficiary pays a percentage of the drug costs -- for instance, 25% paid by the beneficiary and 75% paid by the plan provider)?
- Co-Payment (the beneficiary pays a fee per prescriptions and the prescription drugs are organized into cost tiers -- for instance, a co-pay schedule could look like $5/$25/$65 for tier 1/2/3 drugs)?
- A combination of co-payment or co-insurance?
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D. Prescription Drug Considerations
- Make a List of all prescription drugs, dosages / monthly quantity, and annual costs (you may wish to ask for help from your physician, nurse, or pharmacist).
- Are your prescription drugs on the plan's formulary (prescription drug list)? -- (note: this is probably the most difficult task.)
- If your prescription drugs are not on the formulary, are there alternative prescription drugs listed on the formulary that your physician can recommend?
- Do you prefer name-brand or generic prescription drugs?
- Are you looking for a plan with a Mail-Order option?
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E. Pharmacy Considerations
Is your favorite Pharmacy included within a plan's Pharmacy network? (Please note, a few Medicare Part D providers are still negotiating with pharmacies, so if your pharmacy is not included in your chosen plan's network, check back later and you may find the pharmacy added. It may also be possible to recommend a pharmacy directly to the provider for inclusion in the network.)
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F. Company / Provider Considerations
Do you have a preferred provider or an insurance company with whom you have an established working relationship?
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G. Budget Considerations
- Calculate your annual prescription drug costs with and without a Medicare Part D program (also not an easy task -- we mentioned in an earlier Newsletter that annual out of pocket costs of over $810 dollars could mean that a Medicare Part D plan makes sense for you if your monthly premium is less than $32 per month).
- Calculate your estimated annual Medicare Part D plan premiums -- Can you comfortably afford the plan's premiums along with the co-payment or co-insurance payments?
- Are you financially eligible for an "extra help" program?
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Must I buy my Part D plan from my current Medicare Supplement provider?
Your Medicare Part D plan can be purchased from any authorized Medicare Part D provider. If you so choose, you can purchase your Medicare Part D plan from your Medicare Supplement provider, if your Medicare Supplement provider is offering a Medicare Part D plan. However, if you find a more suitable plan elsewhere, you can purchase the Medicare Part D plan independent of your Medicare Supplement.
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A Quick Comment on VA Benefits
VA Benefits are considered "Creditable Coverage" with respect to Medicare Part D plans. Therefore, if your prescription drugs are now covered by the VA, you may stay with the VA coverage; and if you ever choose to join a Medicare Part D plan, you would not be subject to the 1% per month Premium Penalty.
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Take your Time -- But not too much Time
Over the last few months, we have advised many of our Newsletter readers to take their time and choose a Medicare Part D plan that best suits their needs and budgets. Rushing into a decision is certainly not wise, however, let us also note that waiting too long may also not be the best strategy. In our last Newsletter, we outlined some of the financial dangers that surround missing the close of the Open Enrollment period (May 15, 2006). In addition, many of you have also noted that waiting to enroll until sometime in 2006 also carries the risk of shortening your first annual deduction period (i.e., Enrolling in early 2006 means that you have under 1 year to meet your plan's deductibles).
Note: What are we recommending to our Friends and Family? -- "If you need prescription drug coverage and are enrolling in a Medicare Part D plan, try to enroll in a plan on or before December 15, 2005. This will ensure that your plan takes effect on January 1, 2006 and that you can relax for the holidays."
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Preview -- Selected Medicare Part D Plans to be Featured
"Stay Tuned" - "Don't Touch that Dial" -- In upcoming additions of our Newsletters, we will feature a few Medicare Part D plans and generally highlight their features, costs, and benefits. Let us know if you are interested in a particular Medicare Part D plan and we will try to feature it for all of our Newsletter readers.
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Last updated on: 07/05/2009
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