New Medicare Drug Benefit Creates ConfusionPosting Date: 09/26/2005 After years of wrangling, Congress finally passed a prescription drug benefit for senior citizens. The Medicare program will launch in January of 2006, but over the next several weeks, people who are eligible for Medicare will be bombarded with competing offers from private insurers. On October 1, mailboxes will start filling with promotions for a variety of plans. There will also be ads on television and radio, in magazines and newspapers. There will be intense pressure to pick a program starting on November 15. Those who don?t sign up within six months will have their premiums increase by one percent per month. The longer you wait the more it will cost. This kind of pressure will make some senior citizens very anxious, especially when they discover how complex the decisions will be. For one thing, each plan will charge a premium. Some may be as little $20 a month while others may be well over $30. Some plans will have deductibles or co-payments, while others won?t. Here?s where it gets really complicated. The basic plan has a $250 deductible that you pay out of pocket before you get any drug assistance. Then you pay 25 percent of your prescription drug bills from $250 to $2,250 (not including premiums). At that point, you are on your own. You pay 100 percent of your medication bills for the next $2,850. This is the so-called donut hole, where the Medicare program won?t cover you. Once you have shelled out $3,600, the Medicare drug benefit kicks in again. It is supposed to pay 95 percent of your prescription bills for the rest of the year. Of course, this does not include your monthly premiums. Confused? Wait, it gets even more bewildering. Not all drugs are covered, and plans are allowed to change the drugs they approve at any time. (Seniors are only permitted to switch plans once a year, though.) Related Stories |
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