Kiplinger Today


The Unveiling of Medicare Part D

YOU�VE PROBABLY DEVOTED far too much time over the past few months trying to sort out Medicare�s new Part D prescription-drug benefit. Think of it as carefully plotting, scheming and cajoling to get tickets for the opening of a long-awaited Broadway show. Now, the curtain is rising�25 months after a controversial three-hour vote in the House of Representatives to okay the biggest expansion of Medicare benefits since the program was created four decades ago. So it�s time to shift your thinking from �How in the heck do I choose a plan?� to �How in the heck does my drug plan really work?�We�ve asked an array of experts�Medicare officials, insurance- and drug-industry sources, consumer advocates, and providers�for answers to questions you�ll likely be asking in the weeks ahead. First off, two trends retirees will see in the months ahead:

Second-guessing. �A lot of beneficiaries lured into a PDP [prescription-drug plan] by promises of low premiums may be shocked the first time they go to the pharmacy and have a high co-payment,� says John Gorman, a former Medicare official who now runs Gorman Health Group. Whether you�ve fallen into such a trap or discover other shortfalls with your plan, most beneficiaries get a free do-over, the opportunity to switch plans one time before May 15.

Remain flexible. �There�s no doubt this market will be radically different at the end of 2006 than it is now,� says Robert Hayes, president of the Medicare Rights Center. Some plans are likely to flee; others will change their pricing and benefits structure.

Meanwhile, Congress could make changes the program. The result: There�s a good chance you�ll need to reexamine your options later this year.

A Quick Part D Recap
Medicare�s voluntary Part D prescription-drug benefit started January 1. Beneficiaries with coverage considered to be as good as or better than the new Part D benefit�either through a former employer, union or other means�should not enroll in Part D. All other beneficiaries probably should. Most retirees have until May 15 to do so. Failing to enroll in Part D by that time will trigger a 1% premium penalty for each month you dally. The program requires you to spend $3,600 out of pocket before you hit so-called catastrophic coverage, with Medicare paying 95% of subsequent drug costs. Now, answers to the questions that are bedeviling beneficiaries.


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