Prescription Drug Plans Ready to Roll

It is getting close to the time when Medicare beneficiaries must decide whether or not to sign up for a prescription drug plan. Promotions are being rolled out. The enrollment period begins Nov. 1, 2005, and closes on May 15, 2006.

The government has announced some good news about the program. (See the September 2005 issue for details about the program.)

Remember that the prescription drug plans are being offered by private insurers and other firms. The government subsidizes the benefit. In many areas, consumers will be able to choose from multiple competing programs.

Medicare estimates that in each region there will be between 11 and 23 organizations offering prescription drug coverage. There also will be insurers offering Medicare Advantage, an alternative to traditional Medicare that includes hospital, doctor, and drug coverage.

In every state except Alaska there will be at least one drug plan with a premium of less than $20 per month. The national average monthly premium will be $32.20, lower than initially expected. The average is different in each state. In every region there also will be at least one plan with a low deductible or no deductible.

Medicare believes that the amount it has to subsidize per beneficiary will be less than anticipated.

During the enrollment period, Medicare beneficiaries must compare the different plans available to them. Then, decide whether to stay with your current coverage or join one of the drug plans. Each beneficiary decides which plan to join.

When comparing plans, be sure that any drugs you need or anticipate needing in the future are available. Ask whether all drugs available for diseases are covered or if the plan will cover only certain drugs or only generic drugs. Comparisons of the plans available in your area will be available at the Medicare web site at www.medicare.gov or by calling 800-MEDICARE.

In addition to comparing current plans, consider long-term costs. The government will protect insurers from large losses in 2006 and 2007. After that, insurers who kept prices low to obtain market share might raise premiums and deductibles. An unusually attractive plan this year might impose substantial cost increases in two years.