|
Medicare, the federal government's health
insurance program primarily for people 65 or over, has revealed
their new prescription drug benefit (effective January 1, 2006)
If you are eligible for Medicare, you will be
receiving mail from the private health plans and insurance companies
in your area, as well as from any former employers offering retiree
benefits. Here's some background information to keep in mind as you
review these offers.
Key features of Medicare Part D
The standard or basic Part D plan will look like
this:
-
A monthly premium, averaging around $35 a
month
-
An annual deductible of $250
-
You pay 25% between $250 and $2,250 n drug
costs during the year
-
You pay 100% between $2,250 and $5,100 in
drug costs during the year - this is the gap.
-
You pay 5% of the cost after you exceed
$5,100 in drug costs during the year - this is the catastrophic
coverage level.
Since the plans are being offered by private
entities, some plans may provide options with better benefits.
However, Medicare requires that you pay $3,600 in out-of-pocket
expenses during the year, not counting the monthly premium, before
you are eligible for catastrophic coverage.
You may be covered by only one Part D plan at a
time. You may change from one plan to another during open enrollment
each year. During the first year, open enrollment will be held from
November 15, 2005 through May 15, 2006. This dates may change
in following years.
You do not have to enroll in any plan - it's your
choice, unless you are eligible for both Medicare and Medicaid. Then
it is mandatory and you will be automatically enrolled. While
you are still working, you may be covered by your employer's health
plan that provides a prescription drug benefit. Or you may be
covered by your spouse's plan. Be careful, however, if you you are
not covered for prescription drugs by another plan - such as your
employer's plan or your spouse's plan - you will pay a penalty when
you do enroll in Part D.
This penalty is required by Medicare and is 1
percent per month for each month you are eligible for Medicare and
do not have prescription drug coverage. The penalty will not start
until after the initial enrollment period expires on May 15, 2006. |
