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November 16, 2006
Medicare Part D Enrollment Starts November 15th
It’s open enrollment time again for those of you considering joining a Medicare Part D prescription plan coverage. Those already on a Part D plan may now review your plan to see if changing to another plan will save you money. It is estimated that there are 2 million newcomers to Medicare and 5 million who did not select a plan last year. The deadline to apply is December 31, 2006.
Offering seniors prescription drug coverage was a good idea. But, does it need to be so complicated? This coming year, Massachusetts residents have a choice of 51 different plans, offered by 10 different companies. The premiums range from $13.40 to $87.40 per month. Massachusetts is one of the 11 states in the country that does not provide any coverage for brand name drugs during the “doughnut hole”.
Prescription drug coverage for 2007 has an initial limit coverage of $2,400. You start off by having a $265 deductible. This means you pay the first $265 for medications and then you pay 25% of the cost of prescriptions until you reach $2,400 in total prescription costs. You now enter the doughnut hole and have to pay 100% for the next $3,850 in prescription costs. You can buy coverage for the doughnut hole, but in Massachusetts, plans only cover generic medicine.
If you are currently in a Medicare Part D plan, you will automatically be re-enrolled next year. You don’t have to do anything. By last October, your plan should have sent you the “Annual Notice of Change”. This annual notice informs you of any changes to your plan for the upcoming year. If you are not happy with your plan, and the changes for next year, you have until December 31 to switch to a different plan.
Help is available at Medicare’s website, www.medicare.gov, or by calling the Medicare help line at 1-800-633-4227. On a more local basis, S.H.I.N.E. counselors are available at your local senior center to assist you in making your health insurance decisions.
If you are not currently in a Medicare Part D plan, you may sign up by December 31, 2006 and have coverage as of January 1, 2007. If you were eligible to join last year, and didn’t, you will have to pay a penalty of about $2 per month. If you have something called “creditable coverage” you will not be penalized in the future for not joining now. Creditable coverage means that you have some other type of insurance that is just about as good as the Medicare Part D plan. Your insurance company should send you a letter telling you whether your insurance coverage is “creditable”.
Good luck in reviewing and choosing your prescription plan for this year.
This article gives general information and not specific advice on individual matters. Persons wanting individualized advice on matters discussed should contact an advisor experienced in those matters. To the extent this article provides information on legal matters, it is based on law in effect in Massachusetts on the date of posting (laws in effect in other states are often quite different).
Ronald H. Surabian is a CPA and attorney who works at the Elder Law Center in Saugus, Massachusetts. He also holds Masters in accounting and a Masters in tax law. He currently serves on the board of directors of the Massachusetts Chapter of the National Academy of Elder Law Attorneys. If you have any questions please call me at the Elder Law Center, One Essex Street, Saugus, MA 01906 (781)233-4444. To view this or any prior article, please visit our web site at www.elderlawcenter.org