Perspective
Enrolling In the Medicare Prescription Drug Benefit
Despite the recent Medicare overhaul legislation’s creation of a new prescription drug benefit, you may be better off not taking the benefit and using the discounts you already have, getting your drugs from the Veterans Administration if you qualify, or buying drugs from Canada.
The Medicare prescription drug benefit, which will go into effect in 2006, is completely voluntary. However, if you do not enroll during the six-month open enrollment period when the benefit first becomes available, you may have to pay a premium penalty if you decide to enroll at a different date.
If you do not currently have drug coverage and your annual drug costs are over $810, you may save money by enrolling in the new Part D benefit. But whether you will save money is dependent upon whether insurance companies in your area offer coverage at a reasonable premium; whether the drug benefit will cover the drugs you need; and whether you can get your medicines cheaper through a discount drug plan or by buying them from Canada.
As you decide whether or not to enroll in the Medicare prescription drug benefit, remember that each company that offers Medicare drug coverage will have its own formulary, or list of covered drugs. Companies will likely provide incentives for you to use generic drugs. If the drug you use is not on the formulary and you have to obtain it from somewhere else, you will have to pay the full cost yourself. In addition, the cost of drugs not on your plan’s formulary, including drugs you buy from Canada, will not count toward your out-of-pocket costs to qualify for the drug benefit.
Also keep in mind that you will not be able to buy supplemental insurance to fill gaps in drug coverage and help pay your out-of-pocket drug costs. Medigap plans with drug coverage will no longer be sold once the Medicare prescription drug benefit begins.
People with low incomes may get extra help with drug coverage. If your annual income is below 150 percent of the Federal Poverty Level and your assets are below specified limits, you can apply for a low-income assistance program which will offer less costly Medicare prescription drug coverage. Additionally, if you need more than $5,100 in drugs a year, after paying $3,600 out-of-pocket for drugs, you will receive substantial assistance in covering catastrophic drug costs.
For more information on other ways to pay for your prescription drugs, go to Prescription Drug Assistance Programs.