Navigating the New Medicare Prescription Drug Plan

THE NEW BENEFIT PLAN, WHICH IS VOLUNTARY, WILL BE SUBSIDIZED BY
THE FEDERAL GOVERNMENT BUT DELIVERED BY PRIVATE HEALTH PLANS
AND INSURERS WITH THE AIM OF PROVIDING AFFORDABLE PRESCRIPTION
DRUG COVERAGE TO ALL SENIORS AND PEOPLE WITH DISABILITIES.

For most people, the plan is expected to cover more than half of their prescription drug costs. For those with limited income and resources, Medicare will pay about 95 percent of drug costs. The Bush administration recently estimated the cost to the federal government at about $720 billion over the next ten years.

So far, the new plan has received mixed reviews, with opponents arguing that it is confusing and will primarily benefit health insurers and pharmaceutical companies. There is also controversy surrounding the so-called doughnut hole, a gap in coverage when annual medication costs reach between $2,250 and $5,100.

“There are many choices to make,” says Dan Kalem, Medicare State Health Insurance
Assistance Programs (SHIP) coordinator for Union County. “It’s difficult for many seniors, particularly if they are not computer savvy. I’ve spoken to many groups, and people are confused. For Medicare enrollees in nursing homes, it is very difficult.”

There are two ways to get Medicare prescription drug coverage: by keeping existing
Medicare coverage and joining a standalone Medicare Prescription Drug Plan, or by signing up with a Medicare Advantage Plan or other Medicare Health Plan that covers doctor and hospital care as well as prescriptions.

The various plans will vary on factors such as cost, coverage and convenience. Important to consider are the premium, deductible and co-payment for each plan. Drug plans will contract with pharmacies; check to make sure that your current pharmacy or one in the plan is convenient to you. Some plans offer a mail-order program that will allow you to have drugs sent directly to your home.

“Don’t make a decision blindly,” advises Karen Lumpp, director of finance for Overlook
Hospital. “Ask questions. You have to do your homework. Use all available resources before making a decision.”

It is important to request a list of the drugs covered by each plan, known as a formulary.
The formulary must include at least two drugs in the categories and classes of the most commonly prescribed medications to people in Medicare. “Preferred” brand-name drugs are covered at a lower co-pay, while drugs listed as “non-preferred” will be more expensive. “Understand each company’s policy for generic versus brand name drugs,” says Lumpp.

“Changes are being made all the time in the formularies,” adds Kalem. He stresses that it is critical for Medicare enrollees to examine each plan carefully to make sure their drugs are covered.

For retirees who receive drug coverage through their former employers, it is necessary
to closely compare the current benefit with what would be provided by the Medicare plan. Most employers will continue to offer coverage for the foreseeable future, accepting federal subsidies for providing drug coverage, but retirees’ co-payments may increase.

The 1.2 million Medicare beneficiaries in New Jersey can choose among 19 stand-alone prescription drug plans and seven Medicare Advantage plans. Monthly premiums range from $5 to $67, and annual deductibles are no more than $250 in 2006. Medicare is currently estimating that the average national premium will be $32.20 a month for this year. You may choose to have the premium deducted from your monthly Social Security check, or pay it directly to the insurance company.

New Jersey legislators lobbied in Washington to try and ensure that low-income seniors enrolled in New Jersey’s pharmacy assistance programs, PAAD and Senior Gold, are able to retain these benefits and transition smoothly into the new Part D plan. As a PAAD beneficiary, you must enroll in Medicare Part D in order to use your PAAD benefits in 2006. New Jersey’s Department of Health and Senior Services will recommend which plan will best meet your needs based on your current drug usage and pharmacy preference. You will still pay no more than $5 for a prescription. As a Senior Gold beneficiary, you have the choice of whether or not to use your Senior Gold benefits
with the Medicare coverage. If you join a Part D plan, you must pay the Medicare prescription drug plan monthly premiums. Senior Gold will help you pay for any other out-of pocket-costs.

RESOURCES
To get assistance in choosing the plan that is best for you, go to www.medicare.gov and click on the Drug Plan Finder Tool. Be sure to have your Medicare card in front of you as well as a list of all the prescription drugs you take. If you do not have Internet access, you can call 1-800-Medicare (1-800-633-4227.) TTY users should call 1-877-486-2048.

For further assistance, local information sessions will be held and volunteer counselors will be available to help people navigate the various plan options available. For information, call Dan Kalem’s office at Overlook Hospital, 908-522-4687.

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