Two years ago, when Congress authorized the prescription-drug benefit that would become Medicare Part D, it let private companies offer the coverage instead of mandating that the government provide it, as it does traditional Medicare benefits.
Since mid-November, some 260 companies have been wooing the nation's 43 million Medicare participants to sign up for coverage. This makes it difficult for consumers trying to make apples-to-apples comparisons of the 40 or 50 or even 60 plans that they may be offered in their areas.
Congress' blueprint for the standard drug benefit calls for participants to pay monthly premiums and meet a $250 deductible. When the deductible is satisfied, the plan pays 75 percent of a person's total drug expenses up to $2,250. Enrollees who spend more enter the coverage gap, or so-called doughnut hole, paying all drug costs out-of-pocket until their total spending on prescription drugs reaches $3,600, which is known as the "true out-of-pocket cost." At that point, when a total of $5,100 has been spent by both the enrollee and Medicare, the government pays up to 95 percent of any further expenses.
But Congress allowed insurers to stir benefits into other combinations that might prove attractive to seniors as long as the value of the benefits is at least as great as the standard plan's. The result is a confounding hodgepodge of Prescription Drug Plans (PDPs), in which premiums and deductibles provide no guide to the benefits you will get.
People who would probably benefit by joining include:
¢ Those with 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 co-payments. Individuals 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.
¢ Those with coverage under Medigap. Medicare's most basic plan is likely to be superior to almost anything Medigap offers.
¢ Those with annual drug expenses greater than $750.
Medicare participants who want the new Part D benefits have until May 15 to sign up for one of the new PDPs. If you delay, you must wait until November to sign up, and you'll get no benefits until Jan. 1, 2007. Worse, you're subject to a late-enrollment penalty.
For help in choosing a PDP, you can call Medicare at (800) 633-4227, but be prepared to endure a series of recorded messages before reaching a human being. We think you're better off using Medicare's Web site at www.medicare.gov.