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How to diagnose Medicare's new drug plan

Delivering word of Medicare’s new drug plan to its 42 million participants will likely thin a few forests, wrench some mail carriers’ backs and wrack more than a few brains. But seniors have help available if they know where to look.
Medicare Drug Discount Card Enrollment Begins
Pharmacist Bill Mattson talks with senior citizen Yoko Mitani about the Medicare drug benefit program at Ballin Pharmacy in Chicago last year. The new Prescription Drug Plan Part D is offered through multiple private providers with a dizzying array of options.Tim Boyle / Getty Images
/ Source: contributor

Delivering word of Medicare’s new drug plan to its 42 million participants will likely thin a few forests, wrench some mail carriers’ backs and wrack more than a few brains. At 104 pages, the guide is hardly light reading.

Adding to the burden, the new Prescription Drug Plan Part D is offered through multiple private providers. While all meet or exceed a Medicare established standard, each offers different coverage options and cost structures requiring written disclosure.

“In urban-dominated states such as New York, there are now twenty different approved plan choices,” says George Kelemen, campaign manager of AARP’s MedicareRx Outreach program in Washington DC. “In more rural states, there will still be at least ten.” 

That adds up to a lot of mail—none of which even seniors with time on their hands will relish reading, let alone the sons and daughters many will give it to.  That is if the seniors are even opening this mail.

“I just received notice from my former employer explaining I’d have the option of enrolling in the Medicare Part D plan. I put it aside because I didn't feel like delving into the pros and cons,” says Elaine Robbins, a retired executive assistant living in Chicago. “I’m happy with my coverage and very lax when it comes to reading Medicare material.”  Actually, she admits to throwing away most of it unread. She is not alone.  A small, unscientific sampling found tossing is a popular choice.

Near term, tossing solicitations is a luxury only those covered under generous employer plans, paying minimal premiums, with low-to-no co-payments or deductibles can afford. Though, even they should retain the letters asserting current coverage meets or exceeds the Medicare standard. Those letters will allow future penalty-free switching. Switching may still come into play for these seniors starting in 2007, after employers rework their existing retiree plans to incorporate Part D options.

This year, however, the program’s primary focus is on signing up the uninsured, low- income Medicare participants, those facing catastrophic drug costs, or those with mediocre supplemental or employer coverage.

Joyce Larkin, a vice president of communications and community strategy with UnitedHealthcare Group says savings under the program will be broad-based: “Our research indicates even those with average incomes will save about $700 annually under the plan.  Lower income seniors could save as much as $1,500, or about 90 percent.”  Because of pricing discounts, even the currently uninsured are expected save after factoring in premiums, which can be less than $20.00 a month with some plans, or nonexistent for low-income seniors. 

However, Part D critics like Joe Paduda, president of Health Strategy Associates, a Connecticut-based healthcare consultant, think only heavy prescription drug users benefit by opting in given Part D’s design. Those who lobbied for change disagree.

AARP board member and physician, T. Byron Thames, equates carrying Part D coverage with auto or flood insurance in a recent AARP editorial. It insures against the unexpected catastrophic costs associated with cancer or chronic conditions which can reach several hundred dollars a day. Adds AARP’s Kelemen, “It may still be to one’s advantage even if it isn’t necessary now, to enroll in a low-cost plan to ensure coverage for when it’s actually needed.”

Paduda argues the cost of going without Part D coverage until it’s needed makes more economic sense. Though premiums will increase 12 percent a year after the initial enrollment period ends May 15, 2006, he feels that is not sufficiently punitive to prompt opting in now to avoid higher costs later. 

Some seniors, however, have no choice regarding opting in. Current Medicaid participants are automatically being enrolled and need to make a plan choice. Since Part D replaces the Medicare drug discount card program, anyone using that program also needs to opt in to avoid significantly higher drug costs in 2006.

And all enrollees — whether directly covered under Part D or through an employer plan — will need to revisit their choices annually. Different plans cover different medications, which will change over time.  Some plans are better for those with minimal drug needs, others for catastrophic needs. If retirees begin wintering in the Sunbelt, they may not have access to the same in-network pharmacies they had up North under their current policy — a new selection will be required for them.

When evaluating plans, Kelemen offers the AARP mantra, “Concentrate on the 3 C’s: Cost, coverage and convenience. Ask 'How much will I pay under the various plans versus what I pay now? Which policies will cover all of my drugs? Are the drugstores or mail delivery options convenient to where I’ll be during the year?' ”

Or ask a pharmacist.

Walgreens’ pharmacists will be offering one-on-one in-store consultations October 11, 12, 13, and 15, and again November 8-12. Rival CVS will be devoting Tuesdays in November to answering questions in their stores.  Other chains are also providing pharmacy resources for helping customers evaluate the benefits of enrollment.

For the computer literate, Medicare will provide automated comparison capabilities on its Web site beginning October 13, 2005.  AARP will also have comparison advice available online.

Such easy and ongoing access to answers is a good thing since Part D ensures no shortage of questions regarding optimizing drug coverage for years to come.