Here we go again.
Even if you did your homework last spring and figured out how and what to sign up for in Medicare's prescription drug coverage program, you should review your decision this fall because all of the prescription drug plans have posted changes for 2007. So advises Gail Ireland, Champlain Valley regional coordinator of the State Health Insurance Assistance Program (SHIP).
The annual open election period, the only time most people can enroll or make changes in their coverage, runs from November 15 through December 31. To ensure that your changes will take effect by January 1, however, the federal Centers for Medicare and Medicaid Services (CMS) recommends that you should make your changes by December 8.
Early this month all Vermont Medicare beneficiaries (all 98,000 of us) were sent a copy of "Medicare & You 2007," the official government handbook describing traditional Medicare (Parts A and B), Medicare Advantage (Part C), and the prescription drug plans (Part D). By October 31, participants in Medicare D received notices from their plans about 2007 changes. This is some of the information you need to start making your decisions. But this is only the beginning, says Ireland.
All the plans have made changes for 2007. These changes can come in any aspect of the plans - premiums, deductibles, co-pays, or formularies, the list of drugs that a plan covers. Also, there will be 51 plans available in Vermont, seven more than this year. Furthermore, Medicare Advantage plans, run by private companies, will be available here in 2007- some with drug coverage. People who are satisfied with their current drug plans may not need to take any action, but they should, at least, look to see how their plan compares to the new offerings.
Details are very important, says Brett Sonoda of SHIP. Even if your plan has only minor changes, your own circumstances may have changed. If, for example, your prescriptions are now available in generic form, you may want to look at policies that favor generics. Whether you are looking to stay in your current plan or shop for another, it is important to make sure that all of your drugs are covered at the dosages you take them. Also be sure that the plan does not place any limitations on your drugs that could make it more difficult for you to use the plan.
This is what the standard benefit looks like for 2007.
- Monthly premium: about $27;
- Yearly deductible: $265;
- Co-insurance: you pay 25 per cent of the next $2,135 in drug costs or $533.75.
- Gap in coverage or "doughnut hole": When your total drug costs ($2,135 plus the $265 deductible) amount to $2,400, you reach a gap in coverage. In the gap, you continue to pay monthly premiums, but you also pay 100 percent of the next $3,051.25 in drug costs. You pay $3,850 out-of-pocket (deductible, co-pays, and gap drug costs) in total before you can get out of the "doughnut hole" and get catastrophic coverage.
- Catastrophic coverage: you pay the greater of $2 for generic drugs, $5 for brand name drugs, or 5 per cent of drug costs. The plan pays 95 per cent of drug costs.
Confused yet? Sorry, that was only Step #1. Besides traditional Medicare and the stand-alone drug plans described above, you can also choose among Medicare Advantage plans (Medicare C). These plans combine your Part A (Hospital) and Part B (Medical) coverage in plans approved and subsidized by Medicare and provided by private insurance companies. With Medicare Advantage, you continue to pay the basic Medicare monthly premiums, and you pay the MA premiums (if any), but you do not need a Medigap policy.
Twenty-eight Medicare Advantage plans are being offered in Vermont for 2007, 12 with drug coverage; but not all of them will be available in every county. Monthly premiums range from $0 to $98. Primary care co-pays per visit range from $0 to $35. Annual deductibles for drug coverage, if offered, range from 0 to $265. Cost per prescription varies widely from $2.15 through $63. Drug coverage in the "doughnut hole", when available, is for generic drugs only. Nationally many Medicare Advantage plans limit participants to a certain network of doctors and hospitals. Not in Vermont. In 2007 all of the MA plans offered here are Private Fee-For-Service, meaning that you can go to any Medicare approved doctor or hospital that accepts your plan's payment terms for covered services.
"I would encourage people to dig deep to understand the differences between traditional Medicare and any Medicare Advantage plan they are considering purchasing," says Ireland. "Co-pays can be higher than traditional Medicare co-insurance amounts. Don't rely only on the "Medicare & You 2007" handbook."
Over 40 per cent of senior Vermonters on Medicare have annual household incomes of about $30,000 or less and so may be eligible for federal and/or state assistance in paying for the costs of drug benefits. If your annual income is at or below $22,164 (individual) or $29,820 (couple), you may want to apply for V-Pharm, the state pharmaceutical assistance program. With V-Pharm, you enroll in a Medicare D drug plan, and the state pays all or a portion of your premiums, deductibles, co-pays, and coverage gap. You pay monthly V-Pharm premiums to the state, ranging from $15 to $42, depending on your income.
People with annual incomes at or below $14,700 (individual) or $$19,800 (couple) with resources below $11,500 (individual), $23,000 (couple), can also apply for a federal subsidy through Social Security. Some people who were automatically eligible for federal subsidies for 2006 have received a letter telling them to re-apply for the subsidy for 2007. Confused about your eligibility for the federal subsidy? Call SHIP at 1-800- 642-5119
"If you do not review your choices for Medicare D, you may wind up spending more than you have to," says Ireland. "People who have reached the "doughnut hole" should certainly review their options, and everyone should think about his or her plan's customer service. If the plan has been a major hassle to use, consider switching," she says.
Need Help?
- Medicare Prescription Drug Plan Finder helps you compare plans based on cost and benefit structure, including premiums, formularies, and gap coverage. Call 1-800-MEDICARE (1-800-633-4227) or go to: www.medicare.gov
- Trained counselors with the State Health Insurance Assistance Program (SHIP) are available at every agency on aging in Vermont and can lead you through the mazes of Medicare D and Medicare C. Call 1-800-642-5119.
- New applications for V-Pharm: Vermont Health Access Eligibility Unit, 1-800-250-8427
- Federal subsidies: Social Security, 1-800-772-1213
Barbara Leitenberg writes on senior issues for the Champlain Valley Agency on Aging. This article originally appeared in the Burlington Free Press.
