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Seniors across America are trying to figure out what to do about the grossly complicated new Medicare drug benefit. The United Auto Workers (UAW) magazine, Solidarity, published this advice in their November/December 2005 issue:
Retired members of the UAW face a variety of situations with
regard to the new Medicare Part D Drug Benefit. As such, the decision on whether
to sign up for Part D will vary with individual circumstances. Here are some
basic considerations:
Eligibility: Anyone who has coverage under Medicare Part A and/or Part B.
Coverage: Limited Rx coverage. Each year, per person;
$250 annual deductible; 75 percent coverage for drug costs between $250 and
$2,250; no coverage for drug costs between $2,250 and $5,100; 95 percent coverage
above $5,100 in annual drug costs. Premiums will average about $32 per month
in 2006. All these thresholds will increase each year.
Part D plans: A number of private companies approved by Medicare will offer the Part D prescription drug coverage in your area. These plans may cover only some drugs within each prescription drug category and may have different co-pays and deductibles than the standard Part D Plan (the overall value, however, must equal that of Part D). Plans can change the specific drugs they cover during the course of the year. Participants are generally locked into the Part D plan they select for one year.
Enrollment: Initial open enrollment will be anytime between Nov. 15, 2005, and May 15, 2006.
Late enrollment: There is a late enrollment penalty of about 1 percent of the premium per month for each month delayed (similar to the late enrollment penalty for Part B). If you delay enrollment for 12 months, your premium increases by 12 percent. The late enrollment penalty is permanent.
Employer provided coverage: By Nov. 15 of this year,
employers must provide a notice to all participants eligible for Part D informing
them whether they have "creditable" coverage (creditable coverage
means the prescription drug coverage is equal to or better than that provided
under Part D).
If the coverage is creditable, the great majority of participants will be
better off staying in the employer's plan. Signing up for Part D would be
a waste of money. If an employer later drops Rx coverage, or reduces it so
that it is no longer creditable, there is no late enrollment penalty if a
participant signs up for Part D within 63 days after losing creditable coverage.
If the coverage is not creditable, the participant should give serious consideration to enrollment in Part D. If the participant has any employer coverage, be sure to check with the employer on what, if any, effect enrollment in Part D would have on that coverage.
Low-income retirees: Certain categories of lower-income Medicare retirees will get separate notices from Social Security, Medicare and/or Medicaid advising them of extra benefits that may be available to them.
From the UAW Social Security Department