Medicare beneficiaries are facing a host of changes

Michelle Swafford

Saturday, Oct. 15, 2005 | 9:38 a.m.

Mailbox fliers and commercials featuring celebrities are inundating Medicare beneficiaries with information about prescription drug coverage.

There are 200,000 Clark County residents and about 42 million other Americans who can sign up for government-subsidized prescription drug coverage as of Jan. 1.

But Las Vegas Valley seniors say they are confused by the enrollment process, the numerous drug-plan choices and the costs associated with the prescription drug plans, known as Medicare Part D.

Current Medicare beneficiaries -- seniors age 65 and older and people younger than 65 with permanent disabilities or people with end-stage renal disease -- will be able to sign up for a drug plan from Nov. 15 to May 15, which will be the first time about 70,000 Nevadans will have access to prescription drug coverage.

As people become eligible for Medicare, they would need to sign up for a drug plan three months prior to their 65th birthday, the month of their birthday or three months after to avoid penalties. If they do not sign up by the third month after their birthday, the penalty is retroactive to the month of their birthday.

Current Medicare beneficiaries are not required to sign up for a prescription drug plan, but they will pay higher premiums if they sign up after the May 15 deadline and don't have prescription drug coverage that is considered "credible" -- adequate -- by Medicare.

The Centers for Medicare & Medicaid Services (CMS) is encouraging beneficiaries to sign up for a drug plan using the Web site www.medicare.gov, which enables people to list their drugs, dosages and pharmacy preferences. The Web site then lists the Medicare Part D drug plans that would best meet their needs.

"I don't have the Internet," said a woman who declined to give her name at a recent senior event. "I don't know how to use a computer."

The woman is like many local Medicare beneficiaries. CMS has said that someone else can fill out the information on behalf of beneficiaries and several libraries and senior centers have computers available.

Part D plan providers can call people to give plan information, but they cannot sign anyone up for a plan unless the Medicare beneficiary makes the call, said Marilyn Wills, director of Nevada's State Health Insurance Assistance Program -- also known as the SHIP office.

Part D salespeople are not supposed to sell plans door-to-door.

Nevada's SHIP office and Attorney General Brian Sandoval warn that telemarketers may call and ask for bank account, Medicare or Social Security numbers to scam Medicare beneficiaries.

COSTS

Nevadans can choose from 44 Part D drug plans with premiums that range from $6.42 to $64.63 a month that they will be billed for; the money to pay for the plans will not be taken out of their Social Security checks.

There are 17 private providers that offer those drug plans, which have varying drug coverage, annual deductibles, co-payments and patient payments.

In 2006 the basic Medicare plans' cost starts with the first $250 each beneficiary spends, which will be the calendar-year deductible, with no reimbursement.

After the deductible is paid, they would pay 25 percent of the next $2,000 spent, or a maximum of $500. Medicare pays the remaining 75 percent, or a maximum of $1,500.

But after prescription costs hit $2,250, Medicare beneficiaries pay 100 percent of the drug costs until the calendar year total reaches $5,100, which is an additional $2,850 in out-of-pocket costs.

Above $5,100 in costs, Medicare beneficiaries pay 5 percent of their drug costs with Medicare picking up the remaining 95 percent.

For example:

* Patients with $100 in monthly prescriptions, or $1,200 annually, would pay the $250 deductible plus $237.50, which is a $712.50 savings.

* Patients with $300 in monthly prescriptions, or $3,600 annually, would pay the $250 deductible plus $1,850, which is a $1,500 savings.

* Patients with $500 in monthly prescriptions, or $6,000 annually, would pay the $250 deductible plus $3,395, which is a $2,355 savings.

Out-of-pocket costs are tracked on Medicare beneficiaries' Medicare cards and are totaled individually. Married couples' totals are not combined -- each partner is treated as an individual.

Over-the-counter drugs, prescriptions purchased outside of the United States, illegal drugs and prescriptions that are not covered by the Part D plan do not count toward out-of-pocket spending, Wills said.

Other plans

Members of Medicare Advantage plans -- private Medicare plans such as Senior Dimensions and Secure Horizons -- may be eligible for drug plans without monthly premiums as part of their private health coverage that is limited to a network of health providers.

As if choosing a plan isn't complicated enough, Medicare beneficiaries who have prescription drug coverage through an employer, union, a Medigap plan or a Medicare Advantage plan must decide whether they want to keep their current coverage or choose a Part D plan.

Current drug plan providers such as the ones listed above will be mailing letters to Medicare beneficiaries to tell them whether they can continue their current drug coverage or need to sign up for a Part D plan.

Wills said it is important for Medicare beneficiaries to keep those letters and get help if they do not understand them.

Once people abandon their employer, union or Medigap drug plans, they cannot go back to them if they decide they do not like the Part D plan. They also may lose their private health coverage if they sign up for a Part D plan, Wills said.

Las Vegas resident Marianne Viola said she knows what her Medicare decision has to be, but she doesn't like the costs.

"I have to be on my union plan or I lose my other coverage," she said. "I'm not happy with the coverage anymore."

She said her drug co-payments have gone up from $3 per month for a brand-name drug to $60 for a two-month supply of that brand of drug.

Employers are being offered tax breaks to maintain their drug coverage for people who would otherwise turn to Medicare, but employers have the right to cancel their employees' and retirees' drug coverage, Wills said.

Some employers or unions may say they will help their Medicare beneficiaries with the Part D costs instead of paying the full amount, Wills said.

Beneficiaries who quit paying their Part D premiums will not be able to enroll in another plan until the next enrollment period, and they will face higher premiums -- a 1 percent per month penalty in addition to the current premiums.

Medicare beneficiaries who move out of a Part D plan's coverage area, move into or reside in a skilled-nursing facility or experience an involuntary loss of or reduction in drug coverage can sign up for a Part D plan without a penalty on their premiums.

People who have Medigap, or supplemental Medicare insurance, can maintain their drug coverage if they have an H, I or J plan, but those plans are not considered "credible" coverage, so they will pay higher premiums if they ever leave those plans and sign up for a Part D plan, Wills said.

Medicare beneficiaries who have drug coverage through Veterans Affairs or TRICARE and decide to sign up for a Part D plan after the deadline would not be penalized because their current coverage is considered "credible," Wills said.

Medicaid and Medicare

Beneficiaries who receive both Medicaid and Medicare and receive their drug coverage through Medicaid will receive their drug coverage through Medicare beginning Jan. 1. Those beneficiaries are asked to sign up for a plan, but if they do not they will be enrolled in one automatically.

Nevada agencies will pay their co-payments and premiums if they choose a drug plan that has monthly premiums of less than $23.46. (The Medicare & You book contains misinformation and says low-income Medicare beneficiaries can choose any plan, but that is inaccurate.)

"If they choose a premium that is higher than that they're going to have to pay the difference," Wills said.

Some Nevada Medicare beneficiaries who don't receive Medicaid benefits still may qualify for low-income assistance if they have an annual income in 2005 of less than $14,355 for individuals or $19,245 for married couples living together. They must also have assets -- excluding their home -- that are valued at no more than $11,500 for individuals and $23,000 for married couples living together.

Those people, along with others who have limited income and support other family members, should contact the Social Security Administration to apply for financial assistance.

Nevada's Senior Rx program -- a prescription assistance program for about 9,000 Nevadans age 62 and older who have low incomes but do not qualify for Medicaid -- may see some drug coverage changes next year. Program participants who are eligible for Medicare next year should apply for the federal low-income subsidy and sign up for a Medicare Part D plan, Senior Rx Director Laurie Olson said.

Senior Rx "will try to cover some of the out-of-pocket expenses that our members are not accustomed to paying," Olson said. Seniors who do not qualify for Medicare will continue to receive prescription drug assistance through Senior Rx.

Michelle Swafford is a business writer for the Sun and its sister newspaper, In Business Las Vegas. She can be reached at swafford@ lasvegassun.com or at 259-2326.

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