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Senior Citizen's Guide

Don't Miss Out on Prescription Drug Savings This Year
May 15 Is Fast Approaching

If you're eligible for Medicare, don't miss out on a new prescription drug benefit that will be a boon to millions of Americans.* The May 15 enrollment deadline is fast approaching for enrollment in a Medicare prescription drug plan. If you miss it, you'll lose out on a chance to save money on your medications this year. You won't be eligible to enroll in a plan until the next open enrollment period in November for coverage that won't start until January 1, 2007. You may also be subject to late enrollment penalty fees.

Don't hesitate in getting what you deserve. You may be entitled to prescription drug benefits and immediate cost savings that went into effect January 1, 2006. Ninety-one percent of all senior citizens rely on prescription drugs on a regular basis but until now, Medicare typically didn't cover the cost. Under the new program, known as Medicare Part D, seniors and others eligible for Medicare can purchase private policies from insurance companies and save money. The federal government is subsidizing and regulating this coverage to help cover costs and ensure certain standards are met.

Immediate cost relief: Drug prices have outpaced inflation. The cost of prescription drugs has increased on average by 8.3 percent annually since 1994. In comparison, the new Medicare Part D plan will bring immediate relief to millions of older Americans and others who have no drug coverage or who are paying too much for their prescriptions. The Congressional Budget Office expects that on average, participants in the new plan will spend 37 percent less than they were spending annually before. Savings may be even higher. For example, Jack Winans of Chicago expects to save 50 percent on his medications now that he has been a member of a Medicare prescription drug plan since January 1. "Medicare Part D is confusing for those who haven't yet signed up, but once the deed is done, the savings are extraordinarily substantial and getting those savings are as easy as presenting your Medicare Rx prescription card to any participating local pharmacy," Jack says.

What kind of drug plan is available? Medicare beneficiaries who don't already have drug coverage can supplement their traditional Medicare plans with a stand-alone policy purchased through an independent insurance company.

How do the Medicare prescription plans work? Beneficiaries pay a monthly premium and may pay an annual deductible. Most drug plans will pay for roughly 75 percent of prescription costs between a $250 deductible and $2,250. Once beneficiaries reach the $2,250 level, they may be responsible for paying 100 percent of their drug costs up to $5,100, when the drug plan kicks back in and covers 95 percent of total costs. There are some plans available that provide continuous coverage so there is no coverage gap for this period of time.

Not sure if you need the new drug benefit? Here are a couple of things to ask yourself:

What do people say who have already signed up? Researchers at America's Health Insurance Plans, Washington, found in a recent survey that two thirds of seniors say the prescription benefits were worth their time and effort in evaluating the various drug plans. Eighty five percent say they had no problem using their new benefit, and 60 percent say they are already saving money in the new program.

How to get started: First, make a list of all the prescription drugs you take and how much they currently cost you every year. Next, if you or a caregiver has access to a computer, go to the Medicare web site at www.medicare.gov and click on the "plan finder tool." This tool is based on your zip code and will tell you which plans in your area cover your drugs and what your costs would be.

For those without a computer or who would rather speak with someone, call the toll-free number for Medicare at 1-800-MEDICARE, specify ''enrollment'' on the voice-mail prompt, and tell the customer service representative about the drugs you take and where you live.

Another important resource is the Social Security Administration. Seniors and others eligible for Medicare who have a low income may be eligible for a subsidy to help cover their drug costs. Visit www.socialsecurity.gov or call 1-800-772-1213 for more information and an aid application.

What should you consider in choosing a plan? Here is what to ask yourself when looking for a Part D policy:

Why put off a decision? According to an editorial in the New York Times, the new program is an important new benefit – a vital step bringing Medicare into the modern era. The most important target population—the millions of Americans who previously had no drug coverage and the minority who have enormously high drug costs—should find the new program a boon.*

If you miss this year's May 15 deadline, you'll miss out on drug coverage for 2006. And you may have to pay a penalty for signing up late in addition to your regular premiums. Don't lose out on this important prescription drug benefit.

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