And despite all of the information that seniors were overrun with this last fall, many are left wondering just how you can make sense of this plan. Quite simply, starting in January 2006, for the very first time Medicare will offer prescription drug coverage for the ones that are qualified for the national government’s Medicare health insurance plan.
Medicare Prescription Drug Plan
On the other hand, the confusion begins here since registration at the Prescription Drug program is optional, however, if the beneficiaries don’t register with the May 15, 2006 deadline, they risk paying a permanent surcharge in their premium, which increases at a rate of 1 percent per month. For example, delaying saying healthy during COVID-19 registration for six months can raise the monthly premium by 6 percent.
The Medicare Prescription Drug plans will likely be provided by insurance companies and other private companies approved by Medicare, and these programs will provide at the conventional level of policy that consists of the following:
- A monthly premium that will change based upon the plan you pick.
- A $250 annual deductible, that’s the very first $250 of their yearly cost of these medication.
- A 25% co-pay for another $2,000 in drug prices with the Medicare Prescription Drug plan paying another 75 percent of these expenditures.
- There’s also a policy gap interval, known as the”doughnut hole”, in which the beneficiary pays 100 percent of the next $2,850 in drug expenses.
- Then, the beneficiary has a 5 percent co-pay for the remaining portion of the calendar year following the 3,600 in out-of-pocket expenses.
- Of all of the attributes from the new Medicare Prescription Drug program, the most vexing and possibly the most contentious aspect seems to be the”doughnut hole” policy gap interval, in which the beneficiary is liable for not just 100 percent of their prescription drug expenses, but also the monthly premium. And that’s also why before registering in a plan, beneficiaries might want to crunch some numbers to ascertain which strategy is most suitable to their specific circumstance.
- The very first thing beneficiaries need to think about is the medication formularies they will use throughout the year. Before settling to a Medicare Prescription Drug program, beneficiaries might want to affirm their medication formularies are covered by this program, and they’ll want to compare the co-pays which are going to be required to their specific drug formularies. The Medicare site includes a helpful instrument for comparing the a variety of prescription drug programs.
Here’s an illustration of 3 Medicare Prescription Drug strategies chosen for comparison using the Prescription Drug Plan Finder tool located on the Medicare site, together with the following assumptions:
- The Prescription Drug Plan Finder tool on the Medicare site allows for a comparison of three strategies at one moment, and also the outcomes for your programs chosen for comparison are under.
- As we could see from the preceding case, there are a few substantial differences on the yearly overall drug plan price with our assumptions.
- As it happens, the main factor in determining the overall yearly drug policy costs to the beneficiaries isn’t the premium and deductible, however, whether a specific drug formulary is insured under the program.
- Another important factor is the total amount of co-pay the beneficiary must pay for a specific medication formulary.
- The quantity of co-pay that’s demanded of the beneficiary will be dependent on which grade group a specific drug formulary is recorded under by the prescription drug program.
- In the instance of WellCare, the beneficiary might have needed to cover 100 percent of the expense of the medication (and pay the monthly premium!) Because this program didn’t cover any of those 3 formularies, although the AARP plan coated the medication, however, demanded a co-payment ranging from 40 percent for Lipitor to 66 percent for Mobic.
- The ideal strategy in our case, the Humana Standard strategy, had the cheapest monthly premium plus in addition, they supplied standard policy for three of our medications, requiring only the 25% Nominal prior to attaining the initial coverage limit.
- All three of those plans had 6 neighborhood drug shops such as CVS, Giant, RiteAid amongst many others, conveniently located in the region that approved their plans.
Though the new Medicare Prescription Drug program could be confusing, using a little bit of study and some number crunching, customers are able to make an educated choice. With the increasing cost of health care and prescription medication generally, the new Medicare Prescription Drug plan has the capacity to be a favorable new benefit for Medicare beneficiaries, and also an equally significant part of an individual budget.
Remember also that, you’re not locked to a specific plan indefinitely. After May 15, 2006, there’ll be a yearly open enrollment period from November 15 through December 31 of every year when beneficiaries could alter their plans.