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Part D confusion grows as plan’s details emerge

Updated: May 3, 2013 12:14PM

Originally published: October 17, 2005

Medicare Part D, the new Prescription Drug program, has generated more questions as more materials are sent out by the private companies competing to get you to purchase their plans. Starting today, “Plan Finder” debuts on the Web site to help you choose the most appropriate plan.

Meanwhile, here are more FAQs I’ve been asked:

Q. Is there an income limit to apply for Part D?

A. No, Medicare Part D is meant for everyone who is Medicare eligible. There are no income limits. But you are not automatically enrolled. You must sign up for Part D, by purchasing a plan offered through private companies.

Q. Then why did I hear about income limits?

A. The federal government provides assistance in paying the monthly Part D premium for people with low income and few assets. Contact the Social Security Administration to see whether you qualify for this federal “Extra Help” program.

The state of Illinois also has a program that assists low-income residents -- without regard to assets. It’s called Illinois Cares Rx, and it coordinates and supplements the benefits received under approved Part D plans and the Extra Help program.

Under Illinois Cares Rx, everyone who is already enrolled in the two existing Illinois programs, SeniorCare or Circuit Breaker, will be enrolled in a Part D program offered by UnitedHealth Group or PacifiCare.

Separately, seniors also must apply for the federal Extra Help program through Social Security. Then the Illinois Cares Rx program will automatically coordinate both plans.

If you are not already covered by SeniorCare or Circuit Breaker and think you might qualify for the Illinois Cares Rx plan (with income below $21,218 for a single or $28,480 for a couple), you should call the Illinois Department on Aging (800) 252-8966.

Q. What is that penalty for signing up late?

A. If you sign up after May 15, you’ll pay an extra 1 percent of the national monthly average rate. For example, if you sign up in two years, your monthly premium, no matter which plan you choose, will be 24 percent higher.

Q. What if I’m currently Medicare-eligible, but still working and covered by my company for prescription drugs? Or what if I’m retired but still covered by a retiree plan?

A. You can maintain your current coverage as long as it is considered “creditable.” That is, the company or union must give you a certificate stating its coverage is at least as good as the Part D coverage. Look for this certification, and contact your company if you don’t receive it.

Q. What if I have a Medicare supplement that offers prescription drug coverage?

A. You’ve been paying for prescription drug coverage under supplement plans H, I and J. But the new Medicare Part D will in almost every case offer better coverage, especially because of the “catastrophic coverage” that goes far beyond the limitations of the supplement plans. Compare, and you’ll probably purchase Part D.

Q. What if I’m currently covered by the VA for my prescription drugs?

A. You can have both VA coverage and Part D coverage. But each prescription can be handled by only one of the providers, and you must choose which one.

If you decide to stay with the VA and not enroll in a Medicare Part D plan, you will not be penalized if you later change your mind and decide to enroll in a Medicare drug plan during the open enrollment period, which will run from Nov. 15 through Dec. 31 of each year.

Q. I’m confused about the “stand-alone” plans and the Medicare Advantage plans. What’s the difference?

A. Stand-alone plans are just that: They cover only prescription drugs. So you’ll still pay for Medicare, and probably a Medicare supplement. But the Medicare Advantage plan is like an HMO (Health Maintenance Organization) that combines all costs in one plan, including drugs.

The drawback is that you must use the physicians and hospitals and drug formularies (lists) approved by the plan.

It’s important to understand Medicare Part D, but it isn’t easy. And that’s The Savage Truth.

Terry Savage is a registered investment adviser. Distributed by Creators Syndicate.

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