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Should you join a Medicare drug plan?
If you are a current Medicare participant, you have until May 15, 2006, to sign up for a plan. If you delay, you must wait
until November 2006 to sign up, and you get no benefits until Jan. 1, 2007. Worse, you are subject to a late-enrollment penalty
equal to 1 percent of the average national monthly premium, now $32.20. If your plan starts in January 2007, the monthly penalty
would equal 32 cents multiplied by your seven-month delay, or $2.24. You would have to pay that each month on top of your
monthly premium as long as you are in a Medicare drug plan. When Consumer Reports' actuary examined standard plans, he determined that because of the penalty, only seniors who spend less than $750 a year
should consider waiting to enroll.
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Yes, if:
You have a low income. Individual Medicare participants with monthly incomes below $1,077 ($1,444 for couples) and cash assets of less than $7,500
($12,000 for couples) pay no premium, no deductible, and small copayments. Indviduals with monthly incomes below $1,197 ($1,604
for couples) and assets of $11,500 ($23,000 for couples) pay premiums based on a sliding scale, a $50 deductible, and 15 percent
of the cost of each prescription.
You have coverage under Medigap. Even if your supplemental insurance policy already covers drugs, Medicare's most basic plan is likely to be superior to almost
anything Medigap offers.
Your annual drug expenses are more than $750. Our actuary determined that many of the plans would provide you with savings.
No, if:
You have a retiree policy that covers medications. If your former employer, your union, or a membership association notified you that its drug benefit is at least equivalent
to Medicare's, you need not enroll in a new plan. If your employer later drops your drug coverage, you pay no late-enrollment
penalty if you join Medicare's plan within two months.
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yes, but buy an "equivalent" plan:
If you spend less than $750 annually on prescription drugs now and your health is good, you might want to wait. Even if you delay buying a policy for three years,
your out-of-pocket expenses with a standard plan would probably stay about the same. If you want to insure yourself against
an increase in your prescription drug needs, you should consider a Medicare drug plan. Instead of the standard plan, however,
choose a plan with low premiums and a low or zero deductible. That way, you'll get some coverage right away, and if your health
deteriorates, you'll have a plan in place.
You're automatically enrolled if:
You belong to a Medicare HMO. It may already offer drug benefits that are likely to be even more generous now, reflecting higher government reimbursements--although
those may not last forever. Another plus: You don't have to choose a new plan. You get what the HMO provides.
You're on Medicare and Medicaid. You should already have been assigned to a plan by the government. If it doesn't cover your drugs, you can switch to another
plan every month if you like.
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