Updated: May 3, 2013 12:14PM
Originally published: September 12, 2005
This column is part of a series of occasional columns examining the new Medicare Part D prescription drug benefit, which becomes available Jan. 1. Today’s column examines the options for low-income seniors who cannot afford even the low monthly premiums for the new Medicare Part D coverage.
Medicare Part D prescription drug coverage is right around the corner. Just two weeks from now, on Oct. 1, health insurers will start detailing the coverage they will offer to current Medicare participants.
Although designed to offer drug benefits at reduced prices, Part D still has significant costs. So today, I’d like to eliminate some of the worry for low-income seniors who live in Illinois.
Each participating insurer must offer a basic policy expected to cost as little as $22 month. But even that basic coverage, which involves a complicated system of deductibles, “donut holes” in coverage and co-payments can be too expensive for low-income seniors who are struggling to live on monthly Social Security checks.
The Illinois Department on Aging will lead a caravan throughout Illinois to explain the Illinois Cares Rx prescription drug program.
The caravan will be in Waukegan Sept. 15 and at three Chicago locations Sept. 27-29.
For information about the caravan route, call the Department on Aging at (800) 252-8966.
Federal program for extra helpThe federal government’s “Extra Help” program provides assistance for seniors with low income and few assets. For singles, extra-help assistance may start when income is less than $14,355, and for couples earning less than $19,245.
Assets counted to determine eligibility include “any cash or property that can be turned into cash” within 20 days. That includes checking and savings accounts, certificates of deposit, IRAs and 40l(k)s, stocks, bonds and similar items. Assets over $10,000 for a single, or $20,000 for a couple will disqualify you from the federal Extra Help program, even if your income is below the required level.
To determine how much federal Extra Help assistance you qualify for, contact the nearest Social Security Administration at (800) 772-1213 or apply online at www.SocialSecurity.gov.
Federal policymakers have left it up to the states to fill in the gaps for those who still cannot afford Plan D even with some sort of federal assistance.
The state of Illinois is leading the way in providing comprehensive coverage for low-income seniors and people with disabilities. Starting in 2006, the new “Illinois Cares Rx” program will pay for your Medicare Part D premium and pay in full for all drugs up to $1,750 a year. You will only have a $5 co-pay for brand-name drugs and a $2 co-pay for generic drugs. Above that amount, low-income seniors will have a co-payment of 20 percent (in addition to the $2/$5 co-pays). At $5,100 the co-payment drops to 5 percent.
This program is simple, free (for those who qualify) and will pay the full monthly premium for the basic plan, as well as other payments that basically fill all the gaps in the federal Part D program. Illinois Cares Rx replaces previous programs known as “Circuit Breaker” and “Senior Care” that together currently cover nearly 250,000 Illinois residents. Current participants in those programs will be automatically enrolled in the new Illinois Cares Rx.
Illinois residents may qualify for Illinois Cares Rx even if they don’t qualify for the federal Extra Help program. But depending on your income, age and immigration status, you will be eligible for a different lists of drugs (formulary) in Illinois Cares Rx.
If you were previously in, or qualified for, circuit breaker relief (which means you are over 65 or a person with disabilities, with income below $21,218 for singles and $28,480 for couples), the state will provide payment for a specific list of drugs, which were previously covered under this plan for major disease categories.
If you qualified for Senior Care (with income below $19,140 individuals and $25,660 for couples) and are a citizen or qualified legal immigrant, then the state will cover all major prescription drugs.
Even if you qualify for the state programs, seniors and people with disability must take the following additional steps, since the Illinois plan coordinates with Medicare, the private Part D coverage and the low-income federal senior assistance to fill in all the remaining gaps.
*You must pick one of the Part D private plans that offers basic coverage. (You should pick the plan that offers prescriptions through a pharmacy near you, and that covers the drugs you currently use.)
*You must apply for the Extra Help federal plan for low-income seniors through your local Social Security office.
Contact the Illinois Department on Aging Help Line at (800) 252-8966 or go to www.IllinoisBenefits.org for help in understanding and applying for this state program.
Medicare Part D is intended to take the sting out of prescription drug costs for seniors who can least afford this burden. The federal program is way too complicated, costly and convoluted. Gov. Blagojevich, the General Assembly and state Medicaid officials deserve thanks for making things a lot easier for Illinois residents. That’s the Savage Truth.
Terry Savage is a registered investment adviser and the author of the newly published The Savage Number: How Much Money Do You Need To Retire? (256 pages, Wiley, $24.95).