Take Your Medicine
Medicare's May 15 drug-coverage deadline is a drag. But missing it can only hurt you later.
(MONEY Magazine) – Nobody likes a deadline, but Medicare-eligible Americans--and those who love them--are approaching a big one. On May 15, the open-enrollment period for the new Medicare prescription drug plan (known as Part D) officially ends for 2006, leaving those who have no other drug coverage out in the cold until next year--and, worse, subject to a permanent penalty on the amount they pay each month.
Open enrollment for Part D began last October and was soon followed by reports of mass confusion and errors. As of mid-March, of the 22.9 million seniors who weren't automatically enrolled and who didn't have other adequate drug coverage, only about a third had joined up. "Sign-up was a mess in the early days," says Stuart Guterman of the Commonwealth Fund, a consumer group.
Some speculate that the Bush administration may bend to political pressure and approve one of several bills in Congress to extend the penalty-free enrollment deadline. But that's no reason to put it off. "A lot of the early problems have been worked out," says Guterman. Plus, as the deadline draws near, phone wait times for the Medicare hotline and insurance companies will only increase. So clear a day on your calendar, gather your (or your loved one's) folder of Medicare documents and prescription drug information, and get started.
• FIND A PLAN Go to medicare.gov or call 800-MEDICARE to speak with a counselor. You'll be asked for your Medicare card ID number and information on drugs and dosages. The website or phone rep will generate a list of plans accepted by pharmacies in your area (if you have a second home, make sure you'll be covered there too) and estimate your yearly cost based on the monthly premium, deductible and co-payments.
• DOUBLE-CHECK Once you've picked a plan, call the 800 number and do some fact-checking. "It's not enough just to verify that the drug you take is on the plan," says Vicki Gottlich, a lawyer with the Center for Medicare Advocacy. You need to make sure that you'll be covered for the exact dosage as well as the form (pill, liquid, whatever) of each medication that you take.
• ASK ABOUT AUTHORIZATION Many plans require that your doctor write a letter or fill out a form explaining why you need a certain drug before they will cover the cost. "That's where we're seeing a lot of the hang-ups now," says Gottlich. Make sure you're aware of any such requirements before you sign on; in some cases, it may be worth it to pay more for a plan that covers you with no questions asked.
• GET HELP If you're lost in a jungle of plan names and coverage information, seek out a professional resource such as your state health insurance program (go to eldercare.gov or call 800-677-1116).
• PREPARE TO RE-EVALUATE The next open-enrollment period is just six months away (it begins Nov. 15 for coverage starting Jan. 1), so if you aren't happy with your plan or if your medication needs change, you can switch for 2007. But keep in mind that your rates will be higher if you wait until the next round, so the best strategy is to sign up before May 15. Sometimes deadlines are good for you.
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Why You Want to Make This Deadline
Here's what Medicare Part D could save you this year:
Without Part D coverage you'll pay (on average): $1,495
With Part D coverage your bill drops to: $1,081
Your savings: 28%
SOURCE: Kaiser Family Foundation, 2005. Figures are estimates for non-low-income participants.