Do You Qualify for Extra Help in Paying for Prescription Drugs?
By: Source: AARP Bulletin Today Date Posted: 2005-04-27 13:29:36
The first in a series on what you need to know about the new drug coverage.
Medicare beneficiaries with limited incomes will soon be able to find out whether they qualify for substantial extra help in paying for prescription drugs after the new drug benefit goes into effect on Jan. 1.
As that date approaches, all beneficiaries—except those with good retiree drug coverage—will have to start making decisions about signing up for the benefit. (Information on coverage options will be available in October. Open enrollment runs from Nov. 15, 2005 to May 15, 2006.)
But for people with limited incomes, the first part of that process begins now, so they'll know well in advance if they qualify for the extra help.
From late May through August, the Social Security Administration (SSA) will be sending application forms (in English or Spanish) to millions of people who may be eligible for this assistance.
AARP and other consumer groups urge all those who receive the form—or others who can act on their behalf—to fill it out and return it because, if eligible, the applicants can save a great deal of money on their prescriptions.
"This is a very valuable part of the drug benefit," says Paul Cotton, of AARP's legislative health team. "It allows people who have the greatest difficulty affording drugs to receive the most help. For many people, it will be worth thousands of dollars a year."
Those who qualify will pay no or reduced premiums and deductibles, and low copayments for prescriptions, depending on their incomes and circumstances (see chart). All will receive continuous coverage throughout the year. They will thus avoid the "doughnut hole," the gap in the standard drug benefit that leaves up to $2,850 of annual drug costs uncovered.
Who should apply for extra help?
If you think you may be eligible, it is worth applying, even if your income seems over the limit. For some people—for example, those who have dependents, or live in Alaska or Hawaii, or have certain earnings or expenses that don't count—the limits are higher.
However, if you have a very limited income (levels 1 and 2 on the chart), you need not apply because you are automatically eligible. The Centers for Medicare & Medicaid Services (CMS) will send a letter telling you this. In late fall you will still be asked to enroll in a drug plan of your choice (see last item below).
What if my drugs are already paid for?
People now receiving drugs from Medicaid will get them instead from Medicare after Dec. 31. People in some state Medicaid programs who now get free drugs will pay small copays for the first time next year.
Some states that run other drug assistance programs are still deciding how to fit in with the new Medicare benefit. Contact the program you're enrolled in for information.
What counts as "income" and "assets"?
People who are automatically enrolled do not have to bother with these, since their income and assets have already been deemed below the limits. For others who must apply (levels 3 and 4 on the chart), income means any money from work, Social Security, retirement benefits, alimony, rental property, workers' compensation, etc. Assets are resources like bank accounts, investments, life insurance policies and extra real estate. They do not include your home, the land it stands on, vehicles, burial plots or personal possessions.
The asset limits—the maximum monetary amount allowed—include $1,500 per person for funeral or burial expenses. The application form asks if you expect to use any of your savings, investments or life insurance for this purpose. If you answer "no," the asset limit will be reduced by $1,500 (or $3,000 for a couple).
What do I need to know to fill out an application?
You'll need your Social Security number and financial information. If you have life insurance, you may need to ask your insurer how much money you'd receive if you cashed it in right now. A married couple living together makes a joint application.
How do I apply?
You can fill out and return the application form sent by the SSA. Or you can apply by phone at (800) 772-1213, or in person at a local SSA office or at one of your state SHIP (state health insurance program) offices. Or, from early July, you can apply online at the official Social Security website.
Can anyone help me apply?
Trained SHIP counselors offer help at no charge. To find your nearest office, go online to SHIPtalk or call the Medicare hotline at (800) 633-4227.
Can someone else apply for me?
Yes. Anyone—including a family member, friend, caregiver, legal representative, social worker or SHIP counselor—can complete a printed or online application and even sign on your behalf.
What if I don't receive an application form?
If you haven't received a form from the SSA by late August but think you may be eligible for the extra help, call the SSA at (800) 772-1213 or apply online at the official Social Security website
What if I'm turned down?
You may still qualify for extra help from your state. Some state programs have higher income limits or may not require asset tests. A SHIP counselor can advise you.
What happens next?
Anybody who qualifies for limited income assistance—including those who are automatically eligible—must also enroll in a Medicare prescription drug plan after November 15 in order to obtain coverage. Details of plan options available in your area will be posted on the official Medicare website after October 13, or you can call (800) 633-4227 for the same personalized information.
If you automatically qualify for the extra assistance (levels 1 and 2 on the chart) but fail to enroll in a drug plan, Medicare will enroll you in a plan chosen at random so that you receive coverage. If this happens, you still have the right to switch to a plan of your own choice that may better suit your needs.
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