Finally getting on board with Medicare drug plan

Finally getting on board with Medicare drug plan
By Humberto Cruz
Copyright © 2010, Tribune Media Services
12:45 p.m. CDT, October 14, 2010
http://www.chicagotribune.com/business/sc-cons-1014-cruz-20101014,0,7217941.story


Thank you for your concern, readers, and rest assured: I will enroll in a Medicare prescription drug plan.

I previously wrote that, as of early August, the month I turned 65, I was covered by Medicare Part A (hospital insurance) and Part B (doctor services). I held off applying for Part D (the prescription plan) because I take no medications now.

Don't wait too long, many of you advised me emphatically.

"Can you guarantee you will not develop a condition tomorrow that requires expensive medication?" asked Jim Hunt, an insurance agent in Tucson, Ariz. "I've had clients who contracted serious infections that required very expensive antibiotics."

Cardiology nurse Pamela Cianci was more blunt.

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"I've seen many people over 65 come close to bankruptcy over medication," she said. "Typical scenario: Man, age 65, takes no or little medication because he hasn't been to a doctor for years. Suddenly, at age 651/2 or 66, he has an 'event,' a heart attack, stroke or untreated high blood pressure that turns into heart failure. To stay out of the hospital, he must take at least $1,000 per month worth of medicine, and this is a modest estimate. It usually goes much higher."

I'm convinced. I won't take the risk of a major prescription-drug expense just to save a few dollars in premiums that I can easily afford. I will enroll in a Part D plan well within my initial enrollment period, which for me runs through Nov. 30, or three months after my birthday month. If I miss the initial enrollment period, I can apply only during a month-and-a-half window each year (Nov. 15-Dec. 31, with coverage beginning the following Jan. 1). I won't be denied coverage, but premiums will go up the longer I wait to apply.

Unlike government-run Medicare Parts A and B, prescription-drug plans are administered by private companies. But all plans must meet minimum standards and be approved by the federal Centers for Medicare and Medicaid Services.

Under these standards, the annual deductible for 2010 can be no more than $310, and the insurance company must pay at least 75 percent of the next $2,520 of drug costs. After the initial limit of $2,830 — $310 plus $2,520 — you pay all costs until you have spent $4,550 out of pocket for deductibles, co-pays and drug costs, but not including plan premiums. This is the so-called coverage gap or "doughnut hole."

After that, you pay a $2.50 co-payment for generic drugs and brand-name drugs treated as generic and $6.30 for all others, or 5 percent co-insurance, whichever is greater.

Those are the minimum standards. Many plans offer much greater coverage. But big differences among plans make them difficult to compare. In Florida, where I live, 19 insurance companies offer 47 different plans this year, with monthly premiums ranging from $19.80 to $100.40. You can switch plans once a year during the Nov. 15-Dec. 31 period.

The lowest premium does not necessarily mean the least-expensive plan or best value. You need to calculate the benefits and total annual plan cost to you (premiums plus out-of-pocket expenses, including any deductibles and co-pays) based on the medicines you take. Since I take none now, the lowest premium is a top consideration for me, but other factors may be more important later.


Humberto Cruz is a columnist for Tribune Media Services. E-mail him at yourmoney@tribune.com

Medicare Part D: Things to do

Review plan options: You can add drug coverage to the traditional Medicare plan through a stand-alone prescription-drug plan, or you can get drug coverage and the rest of your Medicare coverage through a Medicare Advantage plan, like an HMO or PPO, which typically provides more benefits at a significantly lower cost through a network of doctors and hospitals. You can enroll in a plan starting Nov. 15.

Consider cost: What will you pay for the coverage, including premiums, deductible and payments for your drugs?

Consider coverage: What benefits are provided (such as picking up expenses in the "coverage gap" and other coverage enhancements)? Which drugs are covered? What are the rules, like prior authorization, for getting those drugs?

Consider convenience: Which pharmacies are part of the plan? Does the plan have a mail-order option?

Resources: The Medicare Prescription Drug Plan Finder can be accessed at medicare.gov or by calling 1-800-MEDICARE. To search and compare coverage options in your area, go to tinyurl.com/2c6o5fh

SOURCE: Medicare.gov