Prescription Drug Coverage: A Crash Course

Prescription Drug Coverage: A Crash Course

More than 200 turn out for forum on new plan for seniors.

Registration for Medicare's Part D Prescription Drug Plan went into effect Nov. 15. Mass confusion over the how, when, who and why commenced Nov. 16.

Much of that confusion was greatly lessened for more than 200 Northern Virginia seniors Nov. 17 during a Town Hall meeting at James Lee Community Center in Falls Church sponsored by U.S. Rep. James P. Moran (D-8). That accomplishment can be attributed directly to Howard Houghton, Virginia Insurance Counseling and Assistance Program, Fairfax County Agency on Aging.

Throughout a two-hour presentation, entitled "Medicare Part D Made Easy," Houghton walked the audience through every twist and turn of the plan's maze, while fielding questions and sprinkling his presentation with humor.

"Even the title of today's program is somewhat of a joke," he said at the outset.

"This program is not for everyone. It is open to everyone. But, if you already have a prescription drug program through another source you may not want to sign up for this," he stated.

What has triggered the nationwide concern among seniors is that those who do not sign up for the program by the May 16, 2006 deadline could incur a 1 percent per month premium penalty if they decide to participate at a later date. The minimum premium in Virginia is estimated to average $34 per month.

Someone who decides to enter the program in June 2007 could end up paying a minimum monthly premium of $38.08 for the rest of his life. That is based on a penalty increase of $4.08 per month. That premium total increases every month of non-enrollment.

"This is like fire insurance on your house. If you don't have it that's exactly when you are going to need it," Houghton said. "It comes down to Part D or no Part D, that is the question."

Houghton was joined in his presentation by Diana Varela of the Social Security Administration. "We will have a sliding scale of premiums for those in the low income brackets. And some will pay no premium," she said.

There is also "extra help" available from the Social Security Administration, according to Varela. "We sent out 19 million applications for extra help. We have received back only three million so far," she said.

That brought forth several claims from audience members that they never received a letter from Social Security. They only received the 2006 "Medicare and You" booklet that details the new Part D program. On the cover is a notation, "This year it's different."

Social Security's so-called "extra help" designation is geared to "limited income beneficiaries of Medicare who need extra financial help to subsidize the costs of Part D participation," Houghton explained.

However, Houghton also warned the audience that the new 2006 booklet contains many errors, including advice on how to enroll found on pages 94, 94 F, 97 and 97 F. "When I and my staff discovered the mistakes we called Social Security and said they needed to send out a clarification letter to correct the mistakes. Their answer was no — it would cost too much," Houghton told the audience.

ALTHOUGH MORAN was supposed to kick off the meeting at 10 a.m., he was delayed until nearly noon due to votes being called in the House of Representatives. When he did arrive he explained why he had voted against the Part D legislation.

"Even if you hang earrings on a sow's ear it is still ugly. This was a bad bill and never should have been enacted. It may help some of you but for many of you it will hurt, including our children," he said.

"I have now co-sponsored a bill that would delay implementation of the penalty element for another year to allow people more time to study their situation and make a decision," Moran said. "However, I don't know how much success it will have because the White House is threatening to veto any legislation that does not put all parts of the program into effect."

Moran explained to the audience that "the night the legislation came to the floor of the House it was 6 p.m. and they [Republicans] did not have the votes for passage so they kept it open for three hours. The normal time to keep a vote open is 15 minutes."

"Our best leverage was with the drug companies. And the most egregious language in this legislation is that it prohibits the Secretary of Health and Human Services from negotiating with those companies to reduce their prices," Moran told the seniors assembled in the Center's auditorium. "The people of this country pay more for drugs than anywhere else in the world."

In the final analysis, Moran advised the audience, "You've got to sign up, as ugly as it is. Medical practice has become a business and this bill was the first step in privatizing Medicare," Moran predicted.

Houghton advised those who take little or no prescription drugs, and are not enrolled in what is designated as a "credible coverage" plan, to enroll in the Humana Inc. plan as listed in page 97 E of the "Medicare and You 2006" manual. The premium is only $8.81 per month, according to the manual. "This will protect you from the premium penalty if you decide to enroll later," he said.

Another primary piece of advice offered by Houghton was, "If you aren't in a plan that covers all your drugs, get into one that covers your most expensive drugs."

OTHER HIGHLIGHTS of Houghton's presentation included:

* Benefits begin Jan. 1, 2006. They are available to everyone regardless of how current health and/or drug coverage is received.

* Enrollment in Part D is optional and voluntary.

* Drugs will be available through two types of drug plans: 1. Private prescription drug plans (PDP); and 2. Medicare Advantage Plans (MS-PD). Those choosing MA-PD need to be enrolled in both Parts A and B of Medicare.

* True out-of-pocket costs include: Annual deductible and any coinsurance or copayments plus annual premiums coupled with a percentage of the drug costs. The total annual limit is $3,600. After that the "Catastrophic Benefits" kick-in and Medicare Part D becomes a prescription drug support plan.

* There are three enrollment periods: 1. Initial period: Nov. 15, 2005 to May 16, 2006; 2. Annual Coordinated Election Period or "Open Season": Nov. 15 to Dec. 31 each year after May 16, 2006; and 3. Special Enrollment Periods which apply to a set of particular circumstances.