Living With Your Medicare Drug Plan: What You Need to Know Between May 15 and November 15, 2006

By: Source: AARP.org Date Posted: 2006-05-19 15:18:00-04:00

If You Are Now Enrolled in a Medicare Prescription Drug Plan (Part D)

You are the plan’s customer. Call your prescription drug plan first with any questions or issues that may arise. If an urgent medical issue arises, call your doctor or 911.

You should read the monthly statement sent by your drug plan and keep receipts and invoices for what you and your drug plan pay for your prescriptions. If you do not receive a monthly statement, call your plan and ask for a copy.

You may request an exception (appeal) if a drug you need is not covered by your plan. You, your doctor, your pharmacist, or a personal representative can file an exception by providing information to the drug plan about why a particular drug is medically necessary and similar drugs covered by the plan are not right for you. It is usually better to ask your doctor or pharmacist to help you by filing the appeal on your behalf. For more information on the appeals process, contact your drug plan. For additional assistance, contact your State Health Insurance Assistance Program (SHIP). On their Website, select “Find a State SHIP,” then click on your state.

Your drug plan can make changes, with 60 days’ notice, to its formulary (the list of drugs it covers), but these changes will not apply in 2006 to people in the plan who are already taking the affected medication. What this means for you:

  • Your plan cannot stop providing you the drug you’re taking, change the terms for how it agreed to pay for the drug, or create new requirements for getting the drug, unless there are concerns over the drug’s safety or effectiveness. Your plan can, however, make these changes for the next enrollment year;
  • Your plan cannot increase your out-of-pocket costs by raising premiums, deductibles, or copay percentages/coinsurance during the enrollment year, although they can take actions that might give you more options to decrease your costs. For example, a plan could begin covering a generic drug that is less costly than its brand-name equivalent, or it could move an existing brand-name drug to a tier that charges lower copays. Your plan can, however, increase what you pay out of pocket in the next enrollment year;
  • Your plan can, with 60 days’ notice, replace a brand-name drug with a new generic drug and require prior approval if you need to keep taking the brand-name drug;
  • Your plan can add to its list of available drugs throughout the year.

Your plan may invite you to take part in Medication Therapy Management (MTM). This is a special service that can help you keep track of your medicines and avoid dangerous drug interactions. All plans are required to offer MTM services to beneficiaries who might benefit from them, at no additional charge. You may want to discuss MTM with your doctor.

You will want to take time in October and November to review the details of your plan’s 2007 prescription drug coverage, as well as information on other plans. Starting in October, all Medicare drug plans will publish information on their drug coverage for 2007. The plans can and probably will make changes in premiums, deductibles, copays, and the drugs they cover.

Comparing these details will help you decide whether to stay with your current plan in 2007 or switch to another. Whatever coverage you sign up for during the annual election period (November 15-December 31, 2006) will take effect on January 1, 2007.

If You Want to Switch Plans

You generally must wait until the next annual election period (November 15-December 31, 2006) to switch from one drug plan to another. But there are specific situations when you can switch plans outside of that time period:

  • If you are eligible for Extra Help from Social Security because of limited income and resources, and you receive Medicaid, you can change plans at any time;
  • If you are eligible for Extra Help from Social Security, and Medicare selected a plan for you, you can change plans once;
  • If you lose your Medicaid coverage, you can change plans once;
  • If you are a Hurricane Katrina victim who lived in a designated ZIP code in August 2005, you can change plans at anytime during the rest of 2006;
  • If you move out of your plan’s service area to reside elsewhere, you can change plans once;
  • If your plan’s contract is terminated or ceases service in your area, you can change plans once;
  • If you demonstrate to Medicare that your plan has not met the terms of its contract, you can change plans once;
  • If you disenroll from a Medicare Advantage plan that provides drug coverage and switch to traditional Medicare health coverage, plus a Medicare drug plan (or vice versa), you can make this switch one time and only up to June 30, 2006.

Switching plans in these circumstances often must be done during a certain time period. For more information, call Medicare at 1-800-633-4227.

If You Did Not Enroll in a Medicare Drug Plan by May 15, 2006

You generally cannot now get Medicare drug coverage for 2006 and will need to wait until the next annual election period (November 15-December 31, 2006). But there are some situations in which you are allowed to enroll in a plan without incurring a penalty:

  • If you become eligible for Medicare in February 2006 or after, you will be able to enroll in a drug plan during your initial enrollment period that extends for seven months—three months before and three months after the month you become eligible for Medicare.
  • If you are a younger individual who receives disability benefits and you become eligible for Medicare, you would have the same seven-month window in which to enroll in Medicare.
  • If you apply and are found eligible for Extra Help*, you can join a Medicare drug plan until December 31, 2006 without penalty.
  • If in August 2005 you were living in a designated ZIP code impacted by Hurricane Katrina, you may enroll in a drug plan up to December 31, 2006. To find out if your home area was designated, call Medicare at 1-800-633-4227.
  • If you lose creditable drug coverage after May 15 from another source (such as an employer or union) through no fault of our own, or if this coverage changes so that it is no longer as good as basic Medicare drug coverage, you can enroll in a Medicare drug plan at that time. To avoid a late penalty, you must sign up promptly to ensure that you go no longer than 63 days between losing your old coverage and receiving Medicare coverage.
  • If you move into or out of a long-term care facility, you have up to 2 months to enroll/disenroll in a plan.
  • If you have been living abroad since May 15, 2006, you can sign up with a Medicare drug plan as soon as you return to live permanently in the United States. To avoid a late penalty, you must start receiving Medicare drug coverage within 63 days of your return.
  • If the exceptions above do not apply to you, under current law you will likely pay a penalty in the form of a higher premiums** when you do sign up for Medicare drug coverage in the future. At present, Congress is considering changing the law to drop the penalty for people who failed to enroll by May 15, 2006, but who enroll between November 15-December 31, 2006. If this happens, nobody will pay a late penalty in 2007, but anyone missing the December 31, 2006 deadline would pay higher premiums after signing up in any future years.

Between now and November, you will be considering whether to sign up to get Medicare drug coverage next year. To be better prepared in making an educated decision, when the 2007 plans are announced in October, you can learn how the program works from a number of sources.

AARP.org provides many details on the Medicare drug program and other important information on prescription drugs. For an overall guide, visit the AARP Bulletin and select “Medicare Drug Coverage: The Basics.” Or visit Medicare’s Website, which offers details about all the 2007 drug plans so that you can compare, starting mid-October. Also, plan to talk to your healthcare providers and family about the drug coverage you need now and may need in the future.

Useful Things to Remember

  1. Your prescription drug coverage is effective the first day of the month after your application is received by the plan (not the date on the application).
  2. If you signed up for auto payment (where your premiums are automatically deducted from your bank account or Social Security check), it takes about two months to take effect. Until auto payment begins, you may need to pay monthly premiums to your plan.
  3. When going to the pharmacy, take your prescription drug plan card (if you have one) OR your Medicare card, photo ID, and enrollment letter (and Medicaid card, if applicable).
  4. Know your benefits/coverage. Consult your plan package and/or Website
  5. Discuss with your doctor what other drug choices might be right for you, such as lower-cost brand-name and/or generic drugs. You can compare the effectiveness and cost of drugs used to treat common health conditions on AARP’s Online Consumer Guide .
  6. If you have applied to more than one Medicare drug plan, you should be enrolled in the most recent one.

Help Is Available

Medicare representatives are available to assist you with making an educated decision. Visit Medicare’s Website or call 1-800-633-4227. Medicare has provided on its Website a “plan finder” tool to help you make decisions based on your preferences and needs.

Your pharmacist and his/her staff may be able to assist with making an educated decision.

If your situation is complex or you need assistance applying for Extra Help, Medicare counselors are available through the SHIP program to help you make an educated decision. SHIP counselors provide free, unbiased, one-on-one counseling and assistance. Each state has a SHIP program. To locate a program in your area, visit SHIP’s Website and select “Find a State SHIP,” then click on your state. You can also call Medicare to get the phone number of your local SHIP.

*Extra Help with paying for a Medicare prescription drug plan is available for qualified beneficiaries. In general, you may qualify for Extra Help in 2006 if your income is below $14,700 a year as a single person or below $19,800 a year if you’re married and living with your spouse. Your total assets generally must be valued at less than $11,500 if you are single or $23,000 if you are married and living with your spouse. Some exceptions apply to the asset limit. For example, the house you live in, your personal possessions, $1500 per person for burial plots, and the cash value of life insurance policies (up to $1,500 or $3,000 for a couple) do not count.

You may apply for Extra Help by visiting Social Security’s Website or calling 1-800-772-1213. For one-on-one assistance with applying for Extra Help, contact your State Health Insurance Assistance Program (SHIP). On their Website, select “Find a State SHIP.” then click on your state.

**The penalty will increase your premium by 1 percent of the average cost of all plan premiums multiplied by the number of months you elected not to have coverage. Each year, the Medicare program determines the average monthly premium among all plans. This amount is used, in part, to calculate any late enrollment penalty.

For example, assume that in 2007 the average Medicare premium will be $35. If you decide to enroll in the next election period, you would pay 1 percent of $35.00 (35 cents) x 7 (months without coverage—June 1-Dec. 31, 2006.) This would mean paying an extra $2.45 per month (or an extra $29.45 per year) on top of your premiums in 2007. The following year, the penalty you pay may change depending on what the average plan premium is for that year. The number of uncovered months used to determine the penalty will remain the same.

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