Medicare Prescription Drug Benefit - Q & A
Medicare
Prescription Drug Benefit - Q & A (updated
as of April 2006)
by Prof.
Tony Szczygiel, SUNY at Buffalo Law School
Medicare
enrollees have the option of enrolling in a Prescription Drug Plan
(PDP) for the new coverage that started January 1, 2006. You must
balance the benefits and costs of enrolling against the consequences
of not enrolling during your initial eligibly period.
Medicare
has established special rules for many individuals that affect your
choices, or eliminate all but one choice. The following Q&A will
help you sort out the options.
Q.
What if I already have prescription drug coverage from my employer or
union?
Your
employer or union should have told you whether they were going to
continue, modify or end their coverage. You get to choose between
your continued plan, the new PDPs or no plan. If you stay with a
employer/union plan that is as good as the Drug Benefit, you will
not be subject to the premium penalty if you later enroll in a
Medicare PDP.
Q.
What if I am enrolled in a Medicare Advantage (MA) plan (Medicare
managed care)?
You can
choose whether to enroll in one of your Medicare Advantage’s
drug plans; switch to another Medicare Advantage plan that offers a
drug plan; or disenroll, return to traditional Medicare and choose
whether to enroll in a PDP.
Q.
What if I am enrolled in Medicaid?
Medicaid
planned to stop covering prescription drugs for dual eligibles (those
eligible for Medicare and full Medicaid). However, the Medicaid
coverage has been extended for dual eligibles having trouble getting
their prescribed drugs. Medicare automatically enrolled dual
eligibles in a plan. You have a credit of $29.83 to pay the monthly
premium. You have no deductible for the plan. Further, your co-pays
will be limited to $1 generic/ $3 brand name. The “doughnut
hole” in coverage disappears.
Q.
What if I have EPIC?
EPIC is
continuing to provide creditable coverage. You can combine EPIC and
the Drug Benefit coverage, including the low income subsidy. If you
qualify for the low-income subsidy, EPIC fees are waived. For
others, EPIC alone or EPIC and a PDP may be the best choice.
Q.
What if I get my prescription drugs through the VA, PACE, Tricare or
FEHB?
You can
continue to use these sources for prescription drugs. The benefits
usually are more comprehensive than the new Medicare coverage and for
most people, they cost less. You probably do not want to enroll in a
PDP.
Q. What if I am in a Medicare Savings Program (MSP,
that is QMB, SLMB or QI-1)?
Medicare
Savings Programs help you cover the cost of Medicare out-of-pocket
expenses, such as Part B premiums. You are automatically eligible
for Extra Help in paying for the new drug plan costs if you are in
one of these programs. You pick a drug plan or you will be
auto-enrolled.
Q. What
if I am a low-income household, but not on Medicaid, SSI or a MSP?
You need
to take two steps – 1) apply for the low-income subsidy 2)
enroll in a PDP. If you qualify for Extra Help but do not choose a
PDP, Medicare will enroll you by May, 2006.
Drug
Benefit Low-income help- 2006 figures
Medicare
will reduce the out-of-pocket costs to beneficiaries with lower
incomes but who are not on Medicaid. Many Medicare participants
should qualify for this extra help.
Full premium and deductible subsidy: Individuals
with income and resources below these levels will have a credit of
$29.83 to pay the monthly premium for their Medicare Drug Plan, and
will not have a deductible. Your co-pays will be limited to no more
than $5/brand name drug. There will be no co-pays after you incur
$5,100 in total annual drug costs.
Individual Couple
Income: $1,103/month ($13,230/year)
$1,485/month ($17,820/year)
Savings: $7,500 $12,000
Applicants
must be below both the income and savings levels.
Limited
premium and deductible subsidy: Medicare reduces the deductible
to $50/year for some Medicare beneficiaries who are not eligible for
the full premium and deductible subsidy. Medicare will reduce the
premiums for these individuals, as set out below. Co-pays are
reduced to 15% of the drug cost, further reduced to $2/generic and
$5/brand name drug after you incur $5,100 in total annual drug costs.
The upper limits for this help are:
Individual Couple
Income: $1,225/month ($14,700/year)
$1,650/month ($19,800/year)
Savings: $11,500 $23,000
The
reduced premiums will come in three steps, roughly $8/month,
$16/month or $24/month depending on where your income falls within
the range of :
*
$1,103/month ($13,230/year) to $1,225/mo. ($14,700/year) for
individuals OR
*
$1,485/month ($17,820/year) to $1,650/month ($19,800/year) for
couples.
For
couples, combined income is considered whether one or both are in
Medicare or enroll in a PDP.
