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In an effort to provide prescription drug coverage to its citizens, the U.S. government has rolled out a plan it calls "Medicare Part D". The "D” stands for "drugs", but critics say it should stand for "disaster". Of the seven million people eligible for the coverage, which begins Jan 1, 2006, only 661,000 were signed up by mid-December, according to the U.S. Social Security Administration. The reason for this low participation rate and the many problems associated with Medicare Part D can be summed up in a single phrase: The plan is far too complicated. Here we shed some light on the changes ushered in by Medicare Part D, the problems with the new plan and the actions you can take to sort through all the information and choose the coverage that is right for you.
Too Much Research
Navigating your way through the program begins with a review of the 92-page booklet "Medicare & You". As the booklet notes, "…everyone with Medicare must make a decision about their drug coverage." While the booklet provides no information about plan-specific coverage, it does give you a place to start your research.
The first step is to figure out where you fit in the grand scheme of things and what options are available to you. Most people fit into one of the five categories below, based on their current medical coverage:
- Original Medicare Plan Only - The original Medicare plan does not provide prescription drug coverage. If you have Medicare, but no drug coverage, this is your chance to get coverage. You can do so by joining a Medicare drug plan, joining a Medicare Advantage Plan (which offers medical and drug coverage) or joining another plan (such as a state-specific plan or low-income plan).
- Medicare and Medigap Supplemental Insurance - New Medigap policies for prescription drug coverage will no longer be sold after Jan 1, 2006. You can keep your current coverage, but Medicare recommends that you join a plan that offers a Medicare drug benefit and then drop your supplemental policy.
- Employer/Union-Provided Prescription Drug Coverage - Your coverage provider should send you a comparison that highlights the differences between your current coverage and the standard Medicare prescription drug coverage. If you are happy with your current coverage, you can keep it and don't need to take action. But if you are dissatisfied with your current coverage, you need to find new coverage.
- Medicare Advantage Plan - The menu of plans and coverage options has expanded dramatically. Comparison shopping is completely up to you.
- Medicare and Medicaid - If you have coverage from Medicare with Medicaid drug coverage, you will automatically get comprehensive prescription drug coverage from Medicare beginning Jan 1, 2006. You need to choose a prescription plan or one will be chosen for you.
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