All of us who receive Medicare have begun to get flyers in the mail from various companies along with the government, about the Medicare Part D – or the new prescription drug benefit that starts next year. Trying to make sense out of all this promotional material can make one’s head spin. Fortunately, help is here!

In the July-August 2005 edition of Senior News, published by Southern Maine Agency on Aging, the first of three articles appeared explaining the program. The following is reprinted with permission from SMAA. The folks there urge that if you have any question about any aspect of this program, please call them at (207) 396-6500 or toll free 1-800-427-7411, and they will help you.

The addition of Medicare Part D is the biggest change since Medicare began in 1965. All Medicare beneficiaries will have decisions to make concerning Medicare prescription drug coverage.

The Medicare Prescription Drug Program became law as part of the Medicare Modernization Act of 2003. It will go into full effect on January 1, 2006.

Beginning that day everyone with Medicare will have prescription drug coverage available for the first time. This will include people on MaineCare (Medicaid), those living in nursing homes, and those already covered for prescriptions through employer, union or private coverage.

People with pre-existing conditions will also be covered. Medicare Part D is offering prescription drug coverage to all Americans on Medicare.

After people meet an annual deductible, Medicare will pay for 75 percent of each prescription up to $2,250 worth of prescriptions each calendar year. For the next $2,280 worth of prescriptions each calendar year, Medicare will pay nothing (unless you are eligible for low income assistance or extra help. If a beneficiary has prescriptions totaling more than $5,100 each year, Medicare will pay at least 95 percent of the cost of the prescriptions above that amount.

There will be a monthly premium for Medicare Part D.

For 2006, that premium has been set at $37 per month for basic coverage. You can decide to pay your coverage carrier directly or you can have the premium deducted from your Social Security check each month. Each calendar year there will be a $250 deductible. Once you have met your deductible you will pay the percentage in the three categories as follows:

•If prescriptions cost $250.01 – $2,500 – You pay 25 percent and Medicare pays 75 percent.

•If prescriptions cost $2,500.01 – $5,100 – You pay 100 percent and Medicare pays nothing.

•If prescriptions cost $5,100.01 and up – You pay 5 percent and Medicare pays 95 percent.

The maximum out-of-pocket expense for each Medicare beneficiary in 2006 should be about $3,600 plus any co-payment required for drug costs over $5,100 each year.

Each Medicare beneficiary will have the chance to enroll in the Medicare prescription drug benefit.

If a beneficiary chooses not to participate when first eligible, Medicare will charge a premium interest penalty of 1 percent per month for each month not enrolled. This may be a factor for beneficiaries as they make a decision as to whether or not Medicare Part D is right for them.

Enrollment begins November 15, 2005 and continues through May 15, 2006. There will be subsequent annual open enrollment periods (Nov. 15-Dec. 31) every year thereafter.

The Centers for Medicare and Medicaid Services will provide the names of insurance carriers who will provide the prescription drug benefit in each state during September, 2005. Companies licensed to do business in Maine will be able to solicit your business by mail or telephone in September, as well.

Also during September, those on Medicare who now have supplemental health insurance, employer health insurance or union retiree coverage that covers prescriptions, will receive notification from their present company stating whether or not the current plan provides coverage that is equal to or better than the new Medicare part D coverage.

If your present prescription drug coverage is at least equal to Medicare’s drug coverage, you can choose not to enroll in Medicare Part D and will face no premium penalty should you later decide to enroll.

The Medicare prescription drug benefit has many steps:

1. Assess the coverage you now have and its limits.

2. Review your annual cost for prescription drug coverage, if you have it.

3. Review the annual cost of your prescriptions.

4. Think about your living situation. Have you been in and out of a nursing facility?

5. If you are presently covered by MaineCare (Medicaid) you will be automatically enrolled in a plan. However, that plan may not have a list of drugs which includes all your prescriptions. You will have an opportunity to change to a plan that is better for you.

6. If you or a loved one is living in a nursing facility, you will need to choose a special plan for institutional pharmacy coverage. Those options will be different and will depend on the number and location of pharmacies in Maine that serve nursing homes.

7. Medicare prescription drug coverage must be tailored to each person’s needs. The same carrier may not be best for both husband and wife.

8. Remember – a new Medicare benefit opens new opportunities for fraud. You will receive a great deal of information about the Medicare Prescription Drug Benefit over the next few months. Most of it will be legitimate. Some will not. Review every piece of mail or e-mail carefully. NEVER PROVIDE YOUR SOCIAL SECURITY NUMBER OR MEDICARE NUMBER and never give our your bank or credit card information over the phone.

If you have any questions, call Southern Maine Agency on Aging for free, unbiased advice.

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