Health / Wellness
Medicare Prescription Drug Coverage
Since January 2006, people with disabilities and seniors who have Medicare have had the opportunity to purchase prescription drug insurance to cover some prescription costs. Before, Medicare did not pay for prescriptions unless they were given as part of a hospital stay or by a doctor in an office or clinic.
However, the Medicare prescription drug insurance, called Medicare Part D, is very complicated and is being marketed to people on Medicare by private insurance companies that will profit if people on Medicaid select their plans. In addition, insurance companies are also advertising a different kind of Medicare health plan (not just a prescription plan) called Medicare Advantage. So people on Medicare have 40 plans to choose among for prescriptions only, and even more plans if they want Medicare Advantage also!
We are very worried that people will be confused by all the complex rules and different plans that offer different costs and drugs, and that they will feel pressured by all the marketing to make quick decisions.
We strongly urge you to contact Michigan Medicare and Medicaid Assistance Program (MMAP) at 800-803-7174 and talk to one of the 799 counselors trained to help you!
Other things you should know include:
1. The new drug coverage isn’t free, and the rules about what patients have to pay are complicated. There are 4 types of payments:
- Premium – this is the payment you make each month you are enrolled in a plan, even if you don’t get any prescriptions that month. Each plan has a different premium amount. Some people must pay the plan’s whole premium. People with Medicaid and other people with low incomes and resources either don’t have to pay a premium at all or pay a smaller one.
- Deductible – A deductible is an amount you must pay for prescriptions each year before Medicare will pay anything. Some of the drug plans have deductibles, some don’t. If a plan has a deductible, say $250, you pay for the first $250 of prescriptions. Then Medicare pays part.
- Co-pays – A co-pay is the part of each prescription that you pay, even once you've paid your deductible. Co-pays do not count toward your deductible.
For example, say your very first prescription once you've enrolled in a Medicare Part D plan costs $50, and the co-pay is $10. If the plan you are in has a deductible (and some don't), you will have to pay the entire $50 yourself but only $40 will count toward your deductible. When you have bought enough prescriptions to add up to your deductible, you will pay only the co-pay ($10 in this example). Co-pay amounts are not the same in every plan or for every medication. If you are considering a plan, be sure to find out what its co-pay is for each medication you use.
- Other out-of-pocket payments – In addition to the 3 payments above, once Medicare and you together have paid for prescriptions worth a total of $2250, you will then have to pay out of your own pocket for all the costs of the next $2,850 in prescriptions and your monthly premiums. When you have paid out $2,850, Medicare will again kick in and pay 95% of prescriptions. But by then you will have paid out of pocket a total of $3,600, not counting deductibles and premiums. Remember: if you also get Medicaid, your costs will not be this high!
2. There are 18 companies that offer a total of 40 separate plans in Michigan to choose from; each of the 40 separate plans differs from the other 39 in terms of:
- What it costs you in premiums, co-pays, and deductibles,
- What drugs it will pay for,
- What pharmacies it uses, and
- Whether it lets you order your drugs by mail
3. People who get Medicare only but have low incomes and resources can get “extra help.”
- If you qualify for “extra help,” your premiums, co-pays and deductibles will be less. The poorer you are, the more help you will get.
- Some people get the “extra help” automatically; some have to apply for it.
- You have nothing to lose by applying for “extra help.” In fact, you may have already gotten a letter about applying for it.
So what should I do?
What you need to do now varies depending on which of the following categories you are in. (What you are hearing on the news is mostly about category #1, so if you’re not in category #1 what you hear on the news may be wrong for you.)
1. You get Medicare (and no Medicaid) and you are not enrolled in Medicare Advantage
2. You get Medicare (and no Medicaid) and you are enrolled in Medicare Advantage.
3. You get Medicare and Medicaid.
4. You get Medicare and you have private insurance which covers prescriptions.
1. You get Medicare (and no Medicaid) and you are not enrolled in Medicare Advantage
People in this category have until May 15, 2006 to pick a prescription plan. After May 15, you will have to pay a bigger monthly premium – and the longer you wait, the bigger the premium will be.
If you are in this category, once you pick a plan you have to stay with it until November 2006. Between November 15 and December 31 of each year you can change plans.
2. You are enrolled in Medicare Advantage.
If you don’t know whether you are in Medicare Advantage, see below. If you are in Medicare Advantage, and the plan already offers prescription coverage, you must use it. If your Medicare Advantage plan does not offer prescription coverage, you can pick a prescription drug plan.
3. You get Medicare AND Medicaid.
People who have Medicaid AND Medicare have been able to use Medicaid to pay for drugs. As of January 1, 2006, Medicaid will not pay for prescriptions for people also on Medicare. Medicare will begin paying for part of their costs.
- People on Medicare and Medicaid who do not pick a prescription plan will be assigned to a plan. But if you don’t like it, you can change to another plan anytime. You can also change plans from the one you choose if you discover it does not work for you.
- Many of the 40 prescription drug plans will not charge a premium to people on Medicaid. Consider this when choosing a plan.
- If you are on Medicaid and Medicare, you will not have to pay as much for your prescriptions as people on Medicare only.
Medicaid spend-down: If you are on Medicaid spend-down and Medicare- and if you are, you know it- the rules for prescription drug coverage are different. If you qualified for Medicaid by spending down in any month since June 2005, you will be automatically enrolled in a prescription drug plan if you do not pick one, but if you don't like it, you can change to another plan anytime.
If you are on Medicare and Medicaid spend-down and you didn't spend down enough in any month since June 2005 to qualify for Medicaid, you can and should apply for "extra help."
4. You get Medicare and have private insurance to pay for your prescriptions.
If you have private prescription insurance that is as good as or better than the Medicare plans, you can keep your coverage, and if you later lose private coverage you can join a Medicare plan without penalty. If your private plan is not as good as Medicare, you should consider choosing a Medicare plan now because if you join after May 15, 2006, there will be a penalty. Your private plan must send you a letter stating whether its coverage is as good as Medicare. If you have not received such a letter, call your plan. If you can't understand what your letter says, call MMAP. Some people are getting very confusing letters.
How should I pick a plan?
We strongly urge you to discuss your options with a counselor at MMAP rather than picking a plan on your own. Before you call, make a list of your current drugs and dosages.
If you are comfortable with the Internet, you can compare plans online at www.Medicare.gov. If it is hard to get into that site, go to www.cms.gov and click on the “Medicare” button in yellow on the left. On the next screen click on “Consumer Information” in the yellow "Topics" section on the right. You will see the following topics you can click on.
Want to Learn More About the New Medicare Prescription Drug Coverage?
This section describes the Medicare drug program.
Landscape of Local Plans
In this section you can see a list of the plans available in Michigan.
Compare Medicare Prescription Drug Plans
This section compares plans available in your zip code. But it also asks questions about how you get Medicare and whether you qualify for “extra help;” if you don’t know the answers, you should call MMAP.
Formulary Finder
This section lets you type in the medications and doses you take and then tells you which plans pay for those drugs AND how much the co-pay would be for each. In that way you can compare your out-of-pocket costs among plans.
Medicare Advantage
Most Michiganders use “Original Medicare” and can go to any doctor, hospital or other provider for their medical services, but a few are enrolled in Medicare Advantage and use an HMO. A new law permits new types of Medicare Advantage plans, and the private insurance companies that offer those plans are now vigorously marketing themselves to all Medicare recipients.
YOU DO NOT HAVE TO JOIN MEDICARE ADVANTAGE TO GET PRESCRIPTION DRUG COVERAGE!!! In fact, it may be a bad idea for you.
Should I be in Medicare Advantage Plan?
We can’t answer that for you, but we can urge you very strongly not to join a Medicare Advantage Plan without talking to a knowledgeable person who is not an employee of a plan. The counselors at MMAP are trained to help you figure out what plan is best for you in terms of your costs, whether your doctors are in the plan, and whether your drugs are covered.
Update March 2007
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