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Medicare drug plan deadline looms

Experts warn adult children should help elderly navigate the program

May 15 is the last day seniors can enroll in the Medicare Drug Prescription Plan Part D program.

But seniors without existing drug-benefits coverage are cautioned to pay close attention to details, and to be sure to sign up to avoid higher costs later.

The controversial drug benefits plan, which critics say is too complicated, offers drug coverage to seniors who don't have a prescription plan or have an inadequate plan.

California has 48 stand-alone drug prescription plans, and the variables involved in finding the right plan can seem insurmountable. Experts say paying attention to a few key details can save a lot of money, and prevent seniors from accidentally disenrolling themselves from their insurance.

Adult children should make a point of helping their elderly parents, said Esther Koch, founder of Encore Management, an elder care advisory firm, and a delegate to the White House Conference on Aging.

"The plan is too detailed for seniors to do on their own. This is a child's opportunity to be there for their parent. It's just a place where adult children need to be for their parent," she said.

"The big point people who have Medicare need to make is to start with what kind of coverage they have now. The biggest problem is they don't know what kind of coverage they have," Koch said.

Existing plans can make a huge difference in whether a senior needs to get, or should forego the Medicare drug plan.

There are five roads prescription drug plans take, according to Koch: employment-related, such as union or company retirement plans; Medicare Advantage and Choice Plus, also known as Medicare HMOs; Medicare supplemental plans with drug coverage; no drug coverage; and federal or state assistance programs.

"Sixty percent of Medicare beneficiaries have some kind of drug coverage. Now they have to figure out if it's creditable," Koch said.

Creditable means the existing drug coverage is just as good or better than the government standard for Part D.

"If it's creditable, then you don't have to do anything," Koch said.

Seniors should obtain documentation from their former employer or the organization or agency where the health plan originates. They were supposed to receive notification of creditability in writing by November 2005, but many didn't know what it was and threw the letters away, she said.

If the drug plan is employment-related or a retiree plan, it is more likely to be creditable. Medicare Advantage plans were likely to have been made creditable, she said. Medicare supplements such as Medigap and AARP plans are likely not creditable, but Koch said finding out is imperative.

Seniors who enroll in Part D and have creditable plans risk disenrolling not only from their existing drug benefit, but also from their entire health insurance plan, Koch said.

Once a senior has determined if their plan is creditable, the next step is to use the Drug Plan Finder tool on the Medicare Web site to find a suitable plan.

California has 48 stand-alone drug plans (plans not linked to additional health insurance coverage) for seniors to search, and that's an impossible task for anyone who isn't computer savvy, Koch said.

"You can't make an informed decision on a plan unless you use a Web-based tool, so you can systematically compare drug needs to plans," Koch said.

"The real trick is to select a plan whose formulary list includes all of the senior's drugs," she added.

Through the Medicare drug plan finder, seniors or their adult children can input information about the names of medications, dosage and thirty-day supply, and the finder will compute the co-pay and insurance costs to come up with the total estimated annual cost, from least expensive to most expensive plans.

Seniors can input pharmacy preferences, or if in a skilled nursery facility, can find out the costs related to the pharmacy the facility uses.

Someone who is in a disease state, with a chronic illness such as cancer or Parkinson's disease, should contact their doctors, and get the names of drugs that might be prescribed later for their treatment. Adding those medications to the drug plan finder now can prevent choosing a plan that won't cover them when the medications are needed, Koch said.

She noted that some seniors on federal or state assistance programs were assigned coverage, but it was done on a random basis.

"They could've been enrolled in a plan where the premium is higher, or it may not have been the best choice for them," she said.

"All seniors have one chance to enroll in a plan and one chance to change plans by enrolling in a different plan by May 15. People on certain governmental assistance programs will have at least one additional chance after May 15 to enroll in a different plan for 2006. Medicare and Medicaid -- dual eligibles -- have even more options. They can effectively change plans once a month," Koch said.

Seniors who are currently medication-free should still sign up if they haven't got a creditable plan. They should get the lowest premium plan now, to avoid the penalty for late enrollment.

Enrollment will open again on November 15 through December 31, but the penalty will be one percent per month, based on the number of months after June 1.

"If you wait two years, it's a 24 percent penalty. If you later enroll, you'll be enrolled (at that penalty rate) the rest of your life," Koch said. People who have creditable plans now, but later need to sign up for Medicare drug plan coverage won't be penalized, she added.

Koch said seniors each year should review the coverage to determine if the drugs the senior is taking are still covered. Some medications may be dropped from the formulary lists during the year, but once signed onto a plan, the senior is covered for those medications for that year.

"Seniors, at a minimum, will have an annual election period from November 15 to December 31 each year, with coverage starting January 1 when they can enroll in a different plan," she said.

For additional help, go to the Medicare Web site or call 1-800-MEDICARE; or the state health insurance program (HICAP) 1-800-4340-0222. Esther Koch has information on her Web site, "What You Need to Know with May 15th Approaching," at www.encoremgmt.com/pages/5/index.htm.

Avenidas in Palo Alto has trained staff to help seniors sign up. The service is free, but an appointment is necessary. Call Ellen Dietrich, (650) 289-5423.

Sue Dremann
May 10, 2006