With the
passage of the Medicare Prescription Drug, Improvement, and
Modernization
Act of 2003 comes a new prescription drug benefit, Part D, plus
coverage for
preventive screenings and tests. Like most things Congress
touches, the
legislation is complicated and confusing but will hopefully be
more understandable in time for senior to make important
decisions.
The Prescription Drug Benefit
In
January 2006, the prescription drug benefit will kick in. Everyone
covered by Medicare
will have choices to make - including:
Stay
in traditional Medicare, a Medicare HMO or a retiree plan
without signing up for
the drug benefit;
Stay
in traditional Medicare and enroll in a stand-alone drug
plan;
Enroll
in a private health plan that offers drug coverage and Medicare
health services.
Those
who choose to take advantage of the drug benefit and have incomes
exceeding $12,123
will pay a monthly premium now estimated at $35. They will also
pay a $250 deductible.
Medicare
will cover 75 percent of drug costs between the deductible and
$2,250. There is
a gap in coverage between $2,250 and $5,100; beneficiaries will
have to pay all drug costs within that range. Once the costs
exceed $5,100, Medicare will cover 95
percent (see chart below for more
information).
|
Amount
|
Benefit
|
|
First
$250 in prescription drug costs
|
No
benefit |
|
Prescription
costs between $250 and $2,250
|
Medicare
pays 75% |
|
Prescription
costs between $2,250 and $3,600
|
No
benefit* |
|
Prescription
costs above $3,600 |
Medicare
pays 95%
|
*This
is the infamous donut hole.
Source:
Social Security Administration
Those
with incomes of less than $12,123 ($16,000 for couples) and assets
under $6,000
($9,000 for couples) will pay no premiums or deductibles, nor will
they have a gap in
their coverage. They
will, however, be required to pay $2 for generics and $5 for brand
names, but they
will have no out-of-pocket expenses once their costs pass the
$5,100 catastrophic
limit.
(Note:
All the premiums, income levels, deductibles, and co-pays
mentioned above
will increase each year along with general cost of
living.)
Other changes
As
mentioned above, this year Medicare Advantage replaces the private
HMO option
now known as Medicare+Choice. Then in 2006, Medicare Advantage
will be expanded
to include preferred provider plans.
Beginning
this year, Medicare, for the first time, covers preventive
procedures, including:
A
one-time initial preventive physical exam within six months of
when a person with
Medicare first becomes enrolled in Medicare Part B;
Screening
blood tests for early detection of cardiovascular diseases;
Diabetes
screening tests for people at risk of diabetes.
Becoming
an informed consumer is the best way to make the right Medicare
choices. Read
through all the information available from the government and
other non-profit sources;
discuss your health care needs with your doctor and friends who
have Medicare.
You can
find up-to-date information about Medicare. Part D and review
many Medicare publications at Medicare's Web site
www.Medicare.gov
