Medicare Prescription Drug Coverage: A Step-by-Step Guide to Enrollment

The enrollment period has started for the new Medicare prescription drug coverage. You cannot ignore the paperwork you have been receiving any longer. It is very important that you enroll during the initial enrollment period (November 15, 2005 through May 15, 2006) to avoid future penalties for late enrollment.

Medicare Part D is a very complicated program, which has made enrolling an overwhelming task for many Medicare participants. We have received numerous calls for help in navigating the enrollment process. To assist our clients in this process, we have put together this step-by-step guide to enrollment. This is not a comprehensive guide to the program, but rather is a summary of important information you need to know in the enrollment process. At the end of this article, we have included resources where you can find additional information. You can also call our office for assistance with the enrollment process.

The steps you need to take are as follows:

1. Determine if you currently have prescription drug coverage.

   If NO: You will need to join a Medicare prescription drug plan when you are first eligible to protect against the high out-of-pocket costs of prescription medications should they be needed. You must enroll by May 15, 2006, to avoid paying a much higher premium if you enroll later. Even if you do not need coverage now, you must enroll in a plan now to avoid significant penalties if you need coverage in the future. For guidance in choosing a plan, skip to step #3 below.
   If YES: Proceed to step #2.

2. If you have other coverage, you need to determine whether or not you need Medicare Part D. To make this determination, answer the following:
   1. Do you have VA, TRICARE for Life or FEHB? If so, you do not need to enroll in a Medicare drug plan. You will not be penalized if you enroll after May 15, 2006 as long as you join within 63 days of losing TRICARE, VA or FEHB coverage.
   2. Do you have Medicaid? If so, you will receive drug coverage through Medicare instead of Medicaid. You should choose and join a drug plan. If you do not, Medicare will automatically enroll you in a plan. You will not get to choose the plan if Medicare automatically enrolls you. You should choose the plan to insure it is the best plan for you.
   3. Are you a member of a Medicare Advantage Plan? If so, the plan will let you know about the prescription drug options they will offer. If you choose to remain in the Medicare Advantage health plan, you must receive your drug coverage through that plan, if it is offered.
   4. Do you have a Medigap (Medicare Supplement) policy with prescription drug coverage (plans H, I or J)? If so, the insurer should have sent you a letter by November 14, 2005, outlining your options. In most cases, the Medigap coverage is not as good as Medicare’s coverage, so you should join a Medicare drug plan. Your Medigap insurer should modify your policy to exclude drug coverage and/or tell you what other Medigap plans are available to you.
   5. Do you have PACE or PACENET? If so, Governor Rendell announced on November 30, 2005, that you can now enroll in a Medicare prescription drug plan without adversely impacting your PACE or PACENET benefits. There will be four or five plans available to PACE and PACENET recipients. You can call (800) 225-7223 for help in making decisions about Medicare Part D and PACE or PACENET.
   6. Do you have prescription drug coverage through a former employer or union? If so, your employer or union should have sent a letter to you by November 14, 2005, stating whether your coverage is at least as good as the standard Medicare Part D coverage. If your coverage is as good as the standard Medicare Part D, you have other “creditable” coverage and you do not need to enroll in Medicare Part D. You will not be penalized if you need to enroll later provided you enroll within 63 days of losing your other coverage. You should keep the letter stating that you have other creditable coverage with your important papers, such as your Will and Power of Attorney. You will need this letter to avoid being penalized if you need to enroll in Medicare Part D at a later date. If your coverage is not as good as the standard Medicare Part D (or if it is terminated), you should join a Medicare drug plan.
3. If you need to enroll in a Medicare Part D plan, you must enroll between November 15, 2005 and May 15, 2006. Coverage begins January 1, 2006. There are many different plans available. A summary of the available plans can be found in the Medicare and You 2006 publication from the Centers for Medicare and Medicaid. All Medicare participants should have received this publication in October 2006.
   1. In evaluating which plan is most beneficial to you, you will need to consider:
      1. The plan premiums;
      2. The plan formularies (which drugs are covered and at what rate); and
      3. Which pharmacies participate in the plans.
   2. For assistance in choosing the right plan for you, contact Medicare at (800) MEDICARE (800-6334-2273) or www.medicare.gov. When you contact Medicare to enroll, you will need to have available the date you originally enrolled in the Medicare program, your Medicare number, a list of your prescriptions, and a list of the pharmacies convenient to you.
   3. You may qualify for “extra help” through the Social Security Administration. Extra help means the government will cover more of the costs of the plan; in some cases all of the costs will be covered. Single individuals with resources below $11,500 and annual income below $14,355 OR married individuals with resources below $23,000 and annual income below $19,245 may qualify for extra help. You can apply for extra help through the Social Security Administration at (800) 772-1213 or www.socialsecurity.gov, unless you already received a letter of automatic enrollment.