Questions and answers about prescription program
Tuesday, November 15, 2005
Enrollment begins today for a new Medicare benefit, but officials suggest mulling it over.
WASHINGTON -- On your mark, get set ... stop.
Enrollment begins today for a new Medicare prescription drug benefit, and officials say it's time for beneficiaries to think about signing up -- but not necessarily to decide right away.
"There's no need to rush into this," said Mark McClellan, administrator for the Centers for Medicare and Medicaid Services. "There's plenty of time to make a decision -- and make a decision you can be confident about."
The new benefit kicks in on Jan. 1. Enrollment continues through May 15.
President Bush says calls the program the "greatest advance in health care for seniors and Americans with disabilities since the creation of Medicare 40 years ago."
Some questions and answers:
Q: How will the program work?
A: People must enroll in a plan offered by a private insurer that contracts with the federal government. The insurer will issue a card that beneficiaries will take to the pharmacy. The pharmacist will scan the card to determine the type of coverage the customer has. That determines out-of-pocket costs.
Q: How many drug plans are there?
A: In most states, beneficiaries will be able to select from at least 40 plans. Some plans offer prescription drug coverage only. Others offer managed care that covers the full range of Medicare services, such as visits to a doctor's office. While some find the vast number of plans confusing, federal officials say the competition forces insurers to lower costs and provide more generous benefits for people 65 and older and the disabled.
Q: How can I determine which plan is best for me?
A: You can compare plans at www.medicare.gov, or you can call 1-800-Medicare, and a customer service representative will help. One thing you need before taking either step is a list of the prescription drugs you take. Beside each one write the price you now pay. The list will allow you to see which plans cover the drugs you take, and how much money you could save by joining a particular plan.
Q: How much will the benefit cost?
A: That depends on such factors as your health and income status. Under the standard benefit, there is a monthly premium averaging about $32 a month and a yearly deductible of $250. The customer also will pay a portion of his or her drug costs -- 25 percent -- until drug spending reaches $2,250. Beneficiaries then pay all drug costs until they hit $5,100. At that point, the customer pays 5 percent of further charges. But remember, insurers know that beneficiaries have different needs, so they are offering different options. For example, some older people would prefer a more basic, no frills plan, with premiums far below the $32 average. Others prefer a plan with no deductible, meaning coverage starts with the first prescription purchase of the year.
How much is the benefit worth?
A: It depends. The typical beneficiary can expect to pay about half of what he would pay without any prescription drug coverage -- about $1,100. The healthiest of beneficiaries might even pay more under the new program than they do now. Additional help is available to the poor. Most of those who qualify for the low-income subsidy would pay just a tiny fraction of the drug costs. Most people will pay less because the government is subsidizing part of the cost of their drugs. The federal government estimates that it will spend about $724 billion over 10 years to provide the benefit.
Q: How do I know if I qualify for the low-income subsidy?
A: In general, you qualify if your monthly income is less than $1,197 if single or $1,604 if married. Also, your assets, such as savings accounts or investments (but not your house) must be worth less than $11,500 if single or $23,000 if married.
Q: What if I already have prescription drug coverage through my employer or union?
A: The government wanted to encourage employers and unions to continue offering drug coverage, so it is offering tax subsidies that give them an incentive to continue coverage and possibly even use some of the tax savings to enhance it. People should check with their employer or union to determine what impact the new benefit will have.