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Happy New Year!
What? It’s not even Halloween and we’re talking about New Year’s? OK, it may seem a little early to pop open the champagne. But you’ll be hearing a lot about Jan. 1, 2006, because prescription drug coverage will become available through Medicare on that date. Heavy advertising of Medicare Part D prescription plans began on Oct. 1, so you’re sure to hear about it — whether you’re eligible or not.
If you’re an active employee covered by Temple medical insurance, you’re not affected. But stay with us for a moment — especially if a member of your family is age 65 and over or otherwise eligible for Medicare.
This article summarizes this major expansion of Medicare benefits at the national level. You’ll find tips and resources for comparing Medicare Part D plans, which are helpful if you need to assist a family member in making a decision. You’ll also learn about what Temple is doing in response to this change.
Don’t let your loved ones ignore the information they receive on Medicare Part D. Although the program is voluntary, there can be penalties for late enrollment.
Medicare at a glance
You probably have a family member who is covered by Medicare right now. Medicare is the national health insurance program for people age 65 or older, some people under age 65 with disabilities, and people with end-stage renal disease.
The original Medicare plan (parts A and B) covers inpatient hospital treatment, outpatient care and physicians’ services. Prescription drugs are not currently covered by the original Medicare or Medicare Advantage Plans, which are managed-care plans that are available in many areas of the country.
As a result of legislation passed by Congress two years ago, Medicare will begin covering prescriptions on Jan. 1, 2006. The new plan is called Medicare Part D.
Insurance and prescription drug companies in the United States will be selling private Medicare Part D plans for a monthly premium in 2006 of about $30 for the standard plan.
Enrollment for Medicare Part D coverage will begin on Nov. 15, 2005, and end on May 15, 2006. Coverage will begin Jan. 1, 2006, or later, based on the date a person joins a plan.
Joining a Medicare Part D prescription drug plan is voluntary. However, if a person enrolls late, they will pay a higher premium. Those with other prescription insurance (such as from their employer) can avoid paying the penalty if they provide a notice confirming that coverage.
Tips for making a decision
If you have a family member who is faced with this decision, comparing Medicare Part D plans will be important. Here’s what to consider:
• The prescriptions — drug names and dosages — that the person currently takes.
• The list of drugs, or formularies, that each of the Part D plans will cover. Compare the drugs on the formularies with current prescriptions. Will the person have to change one or more of their medications in order to get coverage?
• The benefits the plans will pay for prescriptions. How do they compare to each other? How much are the out-of-pocket costs before co-payments and deductibles apply under the different plans?
• The premium costs. While the standard Medicare Part D plans will cost $30 or more a month, plans with richer benefits may be available for higher premiums.
Help with paying for a plan
For people with limited income and resources, extra help paying for a Medicare prescription drug plan is available from the government. Information about this extra help is available from the Social Security Administration (see box for contact information).
Prescription plans from employers
Many companies are continuing to provide prescription drug coverage to their employees and retirees, and many of these plans pay higher benefits than the standard Medicare Part D plan. When that’s the case, people are better off staying in those plans.
Organizations around the country are sending letters to their employees and retirees, with information on how to make coverage decisions. If your family member receives one, review it carefully, because employers are taking several different approaches to prescription coverage and will be paying different levels of benefits.
Temple has already told eligible retirees that its prescription insurance from CareMark will continue. Our retirees have been relieved to learn that they will not have to do anything to continue this coverage.
Although active employees do not need to take action to continue their coverage, Temple will be sending mandated federal notices to them later this month.
Medicare Part D has been controversial, primarily due to its cost to the nation. Despite this, many people will welcome next year when Medicare Part D becomes effective. It will fill a large gap in insurance that many retirees have had to pay for out of their own pockets.
Your family members may be among them, so be on the look out and use this article and resources to assist them in making their decision.