What You Need to Know NOW About Medicare Part D -- Part 2

By Elaine Wiant and Carole Larkin

 

This is part of a continuing series of articles on the new Medicare Prescription Drug Plans and other topics important to ďThird AgeĒ (older adults), their friends and relatives.

 

Q†††††††† What Drugs will be covered?

 

A†††††††† Generally, prescription drugs approved by the FDA, biological products sold in the US and insulin and its associated supplies. This includes both brand names and generics. Each plan will have a different ďformulary.ĒA formulary is a list of drugs that will be offered under the plan.Every formulary will be required to include more than one drug in each drug classification, but the formulary might not include a specific drug that you currently take.

 

A planís formulary will be an important part of the decision about enrolling.The formulary for each approved plan will be available beginning in mid-October at www.cms.hhs.gov or www.medicare.gov or via telephone at 1-800-633-4227 (1-800-Medicare).Help will be available from community public agencies and private companies as soon as the information is available.

 

Q†††††††† Can the Plan change the drugs in the formulary?

 

A†††††††† Yes, but if the Plan removes a drug you use from the formulary, it must give you a 60-day written notice. There are also provisions for Exceptions and Appeals for people who need them.

 

Q†††††††† What does a Prescription Drug Plan cost?

 

A†††††††† A standard planís premium will be about $32 per month in 2006.The premium might be higher in future years.In addition, you will pay a deductible and a portion of your drug costs.

 

Q†††††††† What portion of my drug costs does the Plan pay?What do I pay?

 

A†††††††† You pay the first $250 of drug costs each year.That is your deductible.After that, the Plan pays 75% and you pay 25% of the next $2,000 in drug costs.You pay 100% of the drug costs after that until you have paid $3,600 in the year for drugs.The $3,600 doesnít include the $37 per month premium.

 

Q†††††††† Thatís really confusing!How does this work?

 

A.††††††† OK.Letís suppose that you spend $500 each month on prescription drugs.Hereís how that will work for you.

 

 

 

 

 

Year to Date

 

 

Month

Drug Expense

Plan Pays

You Pay

Drug Expense

Out-of-Pocket

 

 

January

$500

$187.50

$312.50

$500.00

$312.50

 

 

February

$500

$375.00

$125.00

$1,000.00

$437.50

 

 

March

$500

$375.00

$125.00

$1,500.00

$562.50

 

 

April

$500

$375.00

$125.00

$2,000.00

$687.50

 

 

May

$500

$187.50

$312.50

$2,500.00

$1,000.00

 

 

June

$500

$0.00

$500.00

$3,000.00

$1,500.00

 

 

July

$500

$0.00

$500.00

$3,500.00

$2,000.00

 

 

August

$500

$0.00

$500.00

$4,000.00

$2,500.00

 

 

September

$500

$0.00

$500.00

$4,500.00

$3,000.00

 

 

October

$500

$0.00

$500.00

$5,000.00

$3,500.00

 

 

November

$500

$380.00

$120.00

$5,500.00

$3,620.00

 

 

December

$500

$475.00

$25.00

$6,000.00

$3,645.00

 

 

 

So, if you have $500 a month in prescription drug costs, the total drug costs are $6,000.You pay $3,645 plus about $386 ($32 per month premium).The plan pays $2,355.

 

Q†††††††† What if my monthly drug costs are less than that?

 

A†††††††† If your drug costs are $200 per month, it would work like this:

 

 

 

 

 

Year to Date

 

Month

Drug Expense

Plan Pays

You Pay

Drug Expense

Out-of-Pocket

 

January

$200

$0.00

$200.00

$††† 200.00

$200.00

 

February

$200

$112.50

$87.50

$†† 400.00

$287.50

 

March

$200

$150.00

$50.00

$†† 600.00

$337.50

 

April

$200

$150.00

$50.00

$†† 800.00

$387.50

 

May

$200

$150.00

$50.00

$1,000.00

$437.50

 

June

$200

$150.00

$50.00

$1,200.00

$487.50

 

July

$200

$150.00

$50.00

$1,400.00

$537.50

 

August

$200

$150.00

$50.00

$1,600.00

$587.50

 

September

$200

$150.00

$50.00

$1,800.00

$637.50

 

October

$200

$150.00

$50.00

$2,000.00

$687.50

 

November

$200

$150.00

$50.00

$2,200.00

$737.50

 

December

$200

$37.50

$162.50

$2,400.00

$900.00

 

 

So, if you have $200 a month in prescription drug costs, the total drug costs are $2,400.You pay $900 plus about $386 ($32 per month premium).The plan pays $1,500.

 

Q†††††††† Thatís really complicated!

 

A†††††††† Yes, it is!And plans may have variations in this standard benefit.Also different plans will probably have different drug costs, so it will be difficult to compare the plans.

 

When all of the information on the new Prescription Drug Plans is available, you will be able to get someone to help you choose the best Plan for you.Until then, gather all of your information and learn what you can about the new Plans.

 

 

Carole Larkin is a Geriatric Care Manager with an M.A. degree in Applied Gerontology from University of North Texas.Elaine Wiant is a Certified Fraud Examiner and Fellow of the Society of Actuaries.They are owners of ThirdAge Services LLC, a provider of care services and financial services to older adults and their families and friends.

 

Contact ThirdAge Services with questions or to request a speaker for your organization at 214-649-1392 or clarkin@thirdageservices.com.