There is no hotter topic in the health insurance debate than that of prescription drug benefits. The issue is an ever-changing morass, both for those who are covered by employer plans, but can’t get certain medications, and for those covered by government plans that are as confusing as solving a rubix cube blindfolded. Here is a summary guide that identifies the issues of which you need to be aware.
PRIVATE INSURANCE
For individuals covered by private plans, the issues are more straightforward. Your cost of health insurance is rising, your prescription drug benefits are decreasing, and prescription drugs are not getting any cheaper (particularly as the U.S. government works to protect the U.S. pharmaceutical industry by blocking access to medications from outside the country).
For privately insured individuals, your task is to compare policy options closely so that you are choosing a plan that is right for you. You can’t simply look at the cost of your premium anymore. You must look both at what your policy covers and what your out-of-pocket expenses are to take advantage of that coverage. For example, are contraceptives covered by your plan? Many plans don’t cover such medications. Also, does your medication come in a generic form? If not, what is your co-pay for a brand name? Often, co-pays are 2.5 to 5 times more for brand names. In addition, some plans have “preferred” name brands, which cost less than “non-preferred” name brands. You’ll want to read your policy carefully to determine what the plan scheme is.
In fact, many plans have you choose between prescription plans and non-prescription plans. If you have been with your employer for a while and ignore those thick packets that come in the mail with your plan administrator’s name on it, you might want to evaluate what you signed up for. You need to evaluate your medical needs annually so that you can alter your coverage when it makes sense for your personal situation. Don’t get caught in a no-prescription plan when you anticipate a change in that need.
MEDICARE
Beginning in 2006, Medicare recipients are also eligible to receive prescription drug coverage. However, the program is voluntary, so individuals who qualify for Medicare need to take action to sign up. If you do qualify for Medicare, you cannot be denied the drug coverage, no matter what your pre-existing condition or level of income.
The confusing part is that there is not a single Medicare plan. Instead, Medicare has approved a list of private plans that you can choose from. Like the discussion, above, about private plans, you need to choose wisely as each policy is likely to have differences. These differences could be significant depending on your medical needs. You need to understand what drugs are covered, what aren’t, and what the differences are between generic and name brand, for example.
First the deadlines. If you were enrolled in a Medicare Part A or B program before May 15, 2006, you had until that date to sign up for prescription drug coverage. If you didn’t, then you can still sign up, but will have to pay a late penalty (one percent per month each month past that deadline). For those who are newly joining the Medicare program, you will be notified of your right to join and the deadline to do so. U.S. citizens become eligible for Medicare three months before their 65th birthday and three month after. However, eligibility due to a disability is not based on age, but on your length of payments.
Like most coverage, you will have to pay a premium to join. The average monthly premium is about $32 per month (in addition to your Medicare Part B premium). Your deductible cannot be higher than $265 for 2007. You will also have to pay a co-pay for each prescription. The exact amounts of your premium, deductible, and co-pay will depend on the plan you choose.
Once you enroll in a plan, here is how your plan costs will bear out. You will pay a monthly premium, plus deductible, and a co-pay. Once you pay the deductible, your Medicare plan will cover 75 percent of the next $2,000 in prescription drug cost. After that, different states and different plans pay 0% and up, depending on the plan, until you reach the “catastrophic” level. At that point the plans must kick in again and cover 95 percent of your costs. The “catastrophic” level is reached once you pay $3,600 in out-of-pocket prescription drug costs.
In a nutshell, Medicare will start covering after your first $250 in costs, cover 75 percent of your next $2,000 in cost, pay zero (but possibly more depending on your state program) of your next $1,500 in costs, then cover 95 percent of you costs thereafter.
If you are a Medicare beneficiary, you should seriously consider the prescription drug coverage. According to the AARP, individuals in their 70s use 25 percent more prescription medication than those in their 60s. It might not make sense now, but factoring in the penalty for late enrollment, it might make sense to anticipate your future need and enroll sooner rather than later.
To start reviewing the plans that are available, go to:
www.medicare.gov
MEDICAID
Medicaid is government supported health care coverage for low-income individuals. It is a federally enabled program, but is run by each individual state. If you qualify for Medicaid, you will qualify for its prescription drug coverage as well. In fact, unlike Medicare, you will be automatically enrolled for both coverages.
Because coverage depends on each individual state, it is impractical to cover specifics of Medicaid prescription drug coverage in this article. You must contact your local Medicaid agency to find out the details of your particular program. The following link provides a search window for you to find your state’s Medicaid office:
http://www.cms.hhs.gov/apps/contacts/