A primer on Medicare Part D:
Top 10 things to know about Part D prescription coverage.
Need a quick introduction to Part D prescription drug benefits? These are the big ideas you need to know.
- Open to all people with Medicare
- Pay to participate
- Safety net and peace of mind
- Discounted prices
- Choices in plans
- Two kinds of plans
- Enroll late, pay more
- Choose drugs from a formulary
- No free drugs
- Extra help for people who need it
1. Open to all people with Medicare
Younger people with certain disabilities. You cannot be denied coverage
for health reasons. You get to decide if you want to enroll or not. If you have
Medicaid, you will be enrolled automatically if you have not selected a plan
by 2006, so there is no lapse in your Medicaid prescription drug coverage.
Enrollment for coverage starting on January 1 starts on November 15 of
the previous year. If you enroll later, your monthly premiums may be
higher because there's an additional fee for late enrollment.
2. Pay to participate
Participation has a cost and you will pay a portion. Typically, the government pays about 75 percent of the enrollment costs of the plan. You pay the rest.
3. Safety net and peace of mind
All the Medicare Part D plans are private insurance plans. Most participants will pay monthly premiums. That premium buys you the peace of mind of knowing that if your drug costs become very high, you will be protected.
4. Discounted prices
If you join a Medicare Part D plan, and use its network pharmacies, you'll have access to discounted prices. Plans will negotiate lower prices with drug companies and pass those savings along to you. So when you pay for drugs within the plan, you'll have access to discounted prices even when you are responsible for 100 percent of the payment.
5. Choices in plans
You'll have choices in plans. All Medicare Part D plans will be run by private companies. Companies will release details of their plans after October 1, 2005. Although all plans must meet the government's requirements, there will be differences between plans, including what drugs are covered and what pharmacies you can use. Some plans may offer mail-order service. You will want to see which one is best for you. You'll be able to change plans once a year.
6. Two kinds of plans
Plans will come in two basic types. The most simple is a prescription drug plan (sometimes called a PDP), which covers only drugs and can be used with your traditional Medicare and/or a Medicare supplement plan. The other type combines a prescription drug plan with a Medicare Advantage plan that includes medical coverage for doctor visits and hospital expenses. This kind of plan is called Medicare Advantage plus Prescription Drug, or MA-PD.
7. Enroll late, pay more
Enrollment for Medicare Part D benefits begins November 15. Just like other types of insurance plans,
the longer you wait, the higher your premium may be. If you are eligible, and don't sign up during the initial enrollment period, which ends on May 15, 2006, you may pay more if you sign up later. The late enrollment fee is approximately one percent of your premium for each month you delay, and you'll pay it for as long as you stay in a Medicare Part D plan. If you're late because you were participating in a qualified prescription drug plan, such as a plan from your former employer, the fees may not apply to you.
8. Choose drugs from a formulary
Each Part D drug plan will have a government-approved list of drugs it covers -- called a formulary, or a preferred-drug list. The formulary may vary from plan to plan, but you and your doctor will have choices. Before you choose a plan, you'll probably want to compare plan formularies to see which one fits your needs best.
9. No free drugs
Don't expect free drugs. For each prescription, you'll pay a portion of the cost. The plan will help you with some of the costs. How much you pay and how much the plan pays varies.
10. Extra help for people who need it
People with lower incomes get extra help through Medicare Part D. Premiums may be reduced or eliminated, and other payments may be less.
Information excerpted from Introduction to Part D: Medicare's New Prescription Drug Coverage, published by UnitedHealthcare. View the full booklet as a PDF or request a copy at your local Walgreens.
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