San Diego Union Tribune

August 31, 2005

Deadline looms for Medicare drug plan
Without enrollment, costs could increase

By Paul M. Krawzak

WASHINGTON – Medicare beneficiaries who fail to take heed of enrollment deadlines associated with the new prescription drug benefit will, in most cases, face permanently higher plan costs as a result.

The benefit, which begins Jan. 1, will help seniors and the disabled pay for prescriptions. It implements legislation approved by Congress in 2003.

To become covered in the plan, Medicare beneficiaries must first enroll. If they do not do so by May 15, 2006, at the latest, they would typically have to pay a continuing penalty equaling 12 percent or more of their premium costs.

Federal officials are encouraging virtually all Medicare recipients to enroll in the prescription benefit, even if they currently have little use for it.

"For most people, joining when you are first eligible means you will pay a lower monthly premium than if you wait to join until later," a Medicare publication states.

The enrollment period for the drug benefit is Nov. 15 to May 15.

Persons with low incomes and limited resources may qualify for federal aid to help pay the costs of the benefit. Over the summer, the Social Security Administration has sent letters and applications to almost 19 million Medicare recipients who may be eligible for aid.

There is no deadline for completing and sending in the applications for financial help. Nevertheless, recipients are urged to send them in as soon as possible in order to find out if they qualify for aid prior to the start of enrollment Nov. 15, Social Security spokeswoman Dorothy Clark said. Anyone who has lost an application can call Social Security at (800) 772-1213 or (800) 325-0778 for TTY users or apply online at

At present, only basic information is available on the prescription benefit offered through Medicare, the federal health insurance program for seniors and the disabled.

Most beneficiaries will have to choose among a variety of competing plans offered by private health care entities. Every plan must provide a minimal standard level of coverage required by Medicare. Some plans will offer more coverage and additional drugs for higher monthly premiums. Each company offering a plan must sign a contract with the federal government and make prescriptions available at participating pharmacies.

Beneficiaries will pay some of the cost of the program, which includes a monthly premium estimated to average $32 nationwide and $25 in California, a $250 annual deductible and co-payments made by the Medicare recipient after meeting the deductible.

In the standard plan, after paying the first $250 in drug costs, beneficiaries will pay 25 percent of their prescription costs from $250 to $2,250, 100 percent of their next $2,850 in drug costs, and 5 percent of any remaining drug costs for the rest of the calendar year.

The Bush administration announced Monday that some plans will be available with premiums below $30 or even $20.

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