Take steps now for Medicare Part D needs

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Humberto Cruz

I wrote in a previous column that, as of the first of August, the month I turned 65, I was covered by Medicare Part A (hospital insurance) and Part B (doctor services). But I held off applying for Part D (the prescription plan) because I take no medications now.

Many readers wrote to advise me emphatically: "Don't wait too long!"

"Can you guarantee you will not develop a condition tomorrow that requires expensive medication?" asked Jim Hunt, an insurance agent in Tucson. "I've had clients who contracted serious infections that required very expensive antibiotics."

Pamela Cianci, a cardiology nurse in Chicago, was more blunt: "You certainly didn't ask me for advice, but because of my huge experience with this, I should really give you some. I've seen many people over 65 come close to bankruptcy over medication.

"Typical scenario: Man, age 65, takes no or little medication because he hasn't been to a doctor for years. Suddenly, at age 65 1/2 or 66, he has an ‘event' — a heart attack, stroke or untreated high blood pressure — that turns into heart failure. To stay out of the hospital, he must take at least $1,000 per month worth of medicine, and this is a modest estimate; it usually goes much higher."

I'm convinced. I won't take the risk of a major prescription drug expense just to save a few dollars in premiums I can easily afford. I enrolled in a Part D plan well within my "initial enrollment period," which for me ran through Nov. 30, or three months after my birthday month.

Part D basics

If I had missed the initial enrollment period, I could apply only during a month-and-a-half window each year (Nov. 15-Dec. 31, with coverage beginning the following Jan. 1). Although I wouldn't have been denied coverage, premiums would have gone up the longer I waited to apply.

Unlike government-run Medicare Parts A and B, prescription drug plans are administered by private companies. But all plans must meet minimum standards and be approved by the federal Centers for Medicare and Medicaid Services.

Under these standards, the annual deductible for 2010 can be no more than $310 and the insurance company must pay at least 75 percent of the next $2,520 of drug costs.

After this so-called "initial limit" of $2,830 — $310 plus $2,520 — you pay all drug costs until you have spent $4,550 out of pocket for any deductibles, co-pays and drug costs, but not including plan premiums. This is the so-called coverage gap or "doughnut hole."

After that, you pay a $2.50 co-payment for generic drugs (and brand-name drugs treated as generic) and $6.30 for all others, or 5 percent co-insurance, whichever is greater.

Those are the minimum standards. Many plans offer much greater coverage, which is good.

Difficult comparisons

What is bad is that big differences among plans make them difficult to compare. In Florida where I live, 19 insurance companies offer 47 different plans this year, with monthly premiums ranging from $19.80 to $100.40.

You can switch plans only once a year during the Nov. 15-Dec. 31 period.

The lowest premium does not necessarily mean the least expensive plan or best value. You need to calculate the benefits and total annual plan cost to you (premiums plus out-of-pocket expenses, including any deductibles and co-pays) based on the medicines you take.

Since I take none now, the lowest premium is a top consideration for me, but other factors may be more important later.

Send questions or comments to Humberto Cruz at AskHumberto@aol.com or c/o Tribune Media Services, 2225 Kenmore Ave., Buffalo, NY 14207. Personal replies are not possible.

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