Medicare Part D – Is It confusing? Should You Have It? What is the Deadline for Signing Up?

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What’s Medicare?

Medicare is a federal program for health insurance that covers around 43 million Americans.

  • Age 65 and older
  • Any age with kidney disease permanent or
  • Any age with certain disabilities

Medicare consists of the following parts:

  • Part A: Hospital Insurance
  • Part B: Medical Insurance
  • Part C: Medicare Advantage
  • Part D: Prescription Drug

Part D has been added to 2006

Part D coverage, a new prescription drug benefit, is now available. The premium must be paid and enrollment is required. Part D doesn’t affect Part A and B drug coverage. A drug that is not available under Part A, Part B, or both, is exempted from the definition of Part D drug. Therefore, Part D basic coverage cannot include it.

What are the Standard Medicare Benefit Highlights?

  • $250 deductible
  • Medicare will cover 75% of all drug costs above $2,250
  • The coverage gap is the amount that an enrollee must pay for drug costs between $2.250 and $5.100.
  • Medicare will pay 95% after $3,600 of out-of-pocket expenses
  • Part D members have to pay a premium for their Part D benefits
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Are insurance companies able to offer better benefits?

But they must offer a plan that’s actuarially comparable to the standard plan. CMS must approve all Prescription Drug Plan Sponsors.

Extra assistance may be available for beneficiaries with limited income or resources. For more information you can check the Social Security Administration website at http://www.socialsecurity.gov or the Medicare website at http://www.medicare.gov .

What is Medicare Discount Drug Card Cards?

After December 31, 2005, Medicare Discount Drug Cards are no longer available. You can use the discount drug cards until May 15, 2006, or until the beneficiary buys Medicare Part D.

Enrollment in Medicare Part D

Anyone who is eligible to Medicare Part A or is enrolled in Medicare Part B is eligible to Medicare Part D.

Enrollment is voluntary but if a person does not enroll when they are eligible, a late enrollment penalty will be assessed of 1% per month. There is no cap on late enrollment penalties at this time.

What happens if the Part D plan that you have signed up for doesn’t suit you?

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While you can cancel your Medicare Part D benefit at any time, you cannot join another plan before the annual election period. The annual election period runs from November 15 to December 31
Each year. Late enrollees cannot join a plan during the annual election period.

For certain situations, there are special enrollment periods. These include:

  • Permanent move out of the plan area
  • When someone leaves or enters a long-term care facility
  • Involuntary loss or reduction of creditable coverage

Part D and Creditable Insurance

Medicare beneficiaries with another source of drug coverage can stay in the plan and not enroll in Medicare Part D. This is if the other source is at least as good or equal to the Part D standard benefit. Beneficiaries who have creditable coverage will be exempted from late enrollment penalties if they enroll in Part D.

If a person is covered by a group plan for drug coverage, the employer must inform them. Some group plans may not be considered creditable.

What Drugs Are in the Formulary?

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Here are the benefits that can be a little tricky to grasp.

Each Medicare Drug Plan determines the actual drugs that are covered. The formulary for three Part D plans could differ if a company has more than one.

People who enroll in Part D should ensure they check the formulary listing of the plan that interests them.

Someone will have to pay 100% of the cost of a drug that isn’t on their prescription. This amount will not be applied to their out-of-pocket.

What happens if someone has Medicare Supplements H, I or J?

They have two options: they can either change to another Medicare Plan or keep what they have. Supplement plans H, I, & J do not provide creditable drug coverage. After 1/1/2006, plans H, I, & J no longer offer prescription drug coverage for new subscribers.

How can people sign up to Part D?

You can either sign up with a PDP provider directly or through a broker certified to do so. The premium will not be affected by signing up through a broker. A broker can help you with any questions.

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A broker qualified can help you review the formulary and explain your rights.
options. You can sign up with a company directly and have any questions later.
You will need to contact the company and work through their voicemail options.