By VICTORIA COLLIVER
San Francisco Chronicle
November 14, 2005
That's the day when more than 40 million Medicare beneficiaries can begin enrolling for the program, officially called Part D.
But, if the weeks leading up to the signup are any indication, picking the right plan won't be easy.
Seniors and disabled people eligible for Medicare have already been inundated with literature about their options.
The rollout of the federal government's online service to help select a plan has not been swift or smooth. The frequently-asked-questions feature on Medicare's Internet site includes more than 230 entries.
"It's very difficult to figure out what the plans are providing because we don't even have accurate information. The (government's) Web site is really hard to use - and that's even for those of us who are good on the Internet," said Jeanne Finberg, directing attorney for the National Senior Citizens Law Center.
The drug benefit represents the biggest expansion of Medicare, the federal health insurance program for seniors and disabled people, since the program was enacted in 1965. Beginning Jan. 1, government-subsidized coverage for prescription medication will be available to everybody on Medicare who chooses to enroll.
About two-thirds of Medicare beneficiaries already have some form of drug coverage, often through a former employer or a supplemental insurance policy. Those people will have to decide whether to stick with their coverage or pick one of the new plans set up to take advantage of Medicare's drug benefit.
Medicare spokesman Peter Ashkenaz emphasized that Tuesday is just the beginning of a six-month enrollment period, not a deadline.
"Take your time," he said. "Look at the information that you receive in the mail. Check out the ads. Look at the information you're receiving and start gathering it to make an informed decision."
If beneficiaries want their new drug coverage to begin by the first of the year, they must sign up before the end of 2005. Enrollment officially ends on May 15, after which premiums go up about 1 percent per month.
Only low-income or disabled people on both Medicare and Medicaid will be automatically enrolled in a plan. And some of those individuals might want to switch plans if the one they're put in does not meet their needs.
One big change from the way Medicare operates is that private companies will be providing the government-sponsored drug benefit.
These companies have created myriad options designed to meet a variety of needs. Some plans offer low to no premiums, while others are higher-premium plans with lower co-payments.
The federal government has established the minimum level of coverage a plan has to provide. More-comprehensive plans are available, but at a higher cost.
Under the standard or basic program, beneficiaries would have to pay a $250 deductible. After the deductible is exhausted, the beneficiaries pick up 25 percent of drug costs for up to $2,250 in expenses, a maximum of $500.
At that point, there's a gap known as the doughnut hole. For medication expenses between $2,251 and $5,100 the beneficiary is responsible for 100 percent of the cost.
After drug spending reaches $5,100, the beneficiary pays only about 5 percent of the cost.
For expenses in the doughnut hole, an enrollee could lay out up to $2,849. Throw in the deductible and the 25 percent co-insurance, and the real annual cost for the first $5,100 of drug expenses could be about $3,600.
Some insurers are offering more expensive plans that fill in the doughnut hole. Other variations on the Part D theme bypass coinsurance and charge a beneficiary different co-payments depending on whether a drug is generic, brand-name or of some other category.
How does someone navigate all these options?
The Centers for Medicare and Medicaid Services, the federal agency that administers the program, suggests people use its Web site at www.medicare.gov, or phone its call center at (800) 633-4327.
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