Retirement News : Seniors : BC Seniors learn about medicare drug benefits

BC Seniors learn about medicare drug benefits

Date Added: 16-07-2005

Senior citizens will be at their mail boxes in October, picking up and sending off information regarding the new changes to Medicare and the prescription drug benefit.

Bill Lardy, director of the Senior Health Insurance Counseling program (SHIC) of the North Dakota Insurance Department, met with area seniors Wednesday at the Barnes County Seniors center to go over the basic changes in the prescription drug benefit, and give them a heads-up on how to enroll in the new benefit plans.

The purpose of the new prescription drug plans is to provide people with relief from the high costs of prescriptions, an issue that can be especially nerve-wracking for the elderly. According to Lardy, 104,000 North Dakotans, or one out of every six people, use Medicare.

 
Area seniors mulled over the upcoming Medicare prescription drug plan information given to them Wednesday afternoon. People can begin choosing a plan in October, and will have between Nov. 15, 2005 and May 15, 2006 to get in on the lower premium. Stephanie Good/VCTR 
The way the program works is, people who are eligible for Medicare or railroad retirement, chose a plan that appeals to them and their individual needs. Each person is guaranteed to choose from two Medicare approved prescription drug plans, with as many as 50.

These prescription drug plans are insurance policies, and will be provided by one of three sources: private companies such as a health maintenance organization (HMO) or preferred provider organization (PPO), a Medicare health plan, or a person's previous employer or union, such as the Veteran's Administration.

Lardy told those in attendance there is nothing wrong with HMOs and PPOs, but they are very different than the Medicare plans a person may be used to.

 
HMOs and PPOs often combine health and drug benefits into one monthly premium, but they don't cover all pharmacies or all brand name drugs; so if a person decides to enroll in such a plan, they should find out the specifics of how it works and what pharmacies and drugs it covers.

A person who enrolls between Nov. 15 and Dec. 31, 2005, will be covered as of Jan. 1, 2006. Those who enroll between Jan. 1 and May 15 will be covered on the first day of the month after they enroll. But those who wait to enroll until after May 15 will pay higher premiums.

Lardy said some people prefer to "wait and see," because they might be in good health now, and currently don't take a regular schedule of prescription drugs. However, he said they'll end up "paying for the privileged of waiting."

After May 15, 2006, premiums will go up one percent every month for those who wait to enroll. Since the plans are insurance policies, a person will pay a lower premium if they enroll at a younger age.

Lardy gave the example of a person who waits for 10 years to enroll. At the end of that 10 years, they will pay 120 percent more in premiums than they would have if they'd enrolled by May 15, 2006.

For those who enroll in a prescription drug plan by May 15, 2006, the standard premium will be about $37 per month, with a $250 per year deductible. The person will pay 25 percent of their drug costs between $250 to $2,250. If drug costs reach between $2,250 and $5,100, Medicare will pay 100 percent of the cost.

If a person ends up paying more than $3,600 for prescriptions, out of their own pocket, Medicare will pay 95 percent of all further costs that year.

However, Lardy said 40 percent of people on Medicare, or 44,000 North Dakotans, will be eligible for a reduction in premium costs. Those who have lower incomes or limited assets will pay less, and possibly even get their coverage for free.

For example, single people who make less than $9,570 per year, or a couple who makes less than $12,830 per year, will not pay any premium or deductible. They will pay $1 for a prescription of a generic drug or $3 for a brand-name drug, but if they're in a nursing home, their prescriptions will be free.

Another example would be those who make between $14,355 and $19,245 per year, and have assets of less than $11,500, will pay their premium on a sliding scale, and a $50 deductible. Their plan will pay 85 percent of their prescription drug costs.

When figuring assets, the value of a home and car won't be counted. In a case where a person lives on a farm but rents out the land, the land the house is on won't be counted as an asset, but the land being rented out will be counted as income.

Lardy said, beginning in October, people should research the plans that are best for them because various companies will begin calling people on the telephone to offer their specific plan, and if a person knows the facts about what benefits they need, they won't get talked into a plan that's not right for them.

"Make your choice on what you think is best, not what someone else thinks is best," Lardy said.

Lardy emphasized the importance of choosing a plan that will be accepted by the enrollee's pharmacy.

Also, if an enrollee currently gets drug coverage through a former union or employer, such as the VA for example, the VA will send out a letter this year to let that person know if the VA plan covers all their needs, or if Medicare would be better.

Medicare recipients are not required to enroll in one of the prescription drug plans, which is why each person must decide for themself if any existing coverage will continue to meet their prescription drug needs into the future.

Lardy emphasized the prescription plans are not automatic. Everyone on Medicare or railroad retirement is eligible, but they must enroll in a specific plan of their choice.

In October of this year, Medicare recipients will receive information in the mail explaining the different plans and how to enroll.

For More Information:

http://www.times-online.com/articles/2005/07/15/news/02bcseniors.txt