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Contact: Sarah Seals 800.428.0272, ext. 688 sseals@tscpa.net Signing Up For The Medicare Drug Benefit
Texas CPAs Explain What Consumers Need to Know About Part D DALLAS — Beginning Nov. 15, everyone entitled to Medicare Part A or enrolled in Medicare Part B will need to decide whether to enroll in Medicare’s new prescription drug benefit. Medicare Part D, as it is called, begins Jan. 1, 2006. According to the Texas Society of Certified Public Accountants, this new Medicare plan can offer savings on prescription drugs. HOW MEDICARE PART D WORKS Medicare beneficiaries who choose to remain in the traditional fee-for-service Medicare program can sign up for drug coverage through a stand-alone prescription drug plan (PDP) from a private insurer. All beneficiaries are guaranteed to have at least two qualifying plans from which to choose. You also have the option to elect to receive all Medicare covered benefits, including new prescription drug benefits, under Medicare Advantage, the new name for the Medicare HMO program. If you have coverage for prescription drugs through a former employer or union, check with the benefits administrator. Medicare prescription drug coverage may be different for you. WHEN TO ENROLL The initial enrollment period for Medicare beneficiaries runs for six months beginning Nov. 15 and ending May 15, 2006. For those who join by Dec. 31, drug coverage takes effect on Jan. 1, 2006. Join after that date and coverage becomes effective the first day of the month after the month of enrollment. If you become eligible for Medicare after Nov. 15, the Medicare program will inform you of your six-month enrollment period. SIGNING UP FOR THE MEDICARE DRUG BENEFIT The new drug benefit is voluntary. If you’re eligible and don’t enroll during your six-month enrollment period, but change your mind and sign up later, you will pay more. The late enrollment fee is approximately one percent of your premium for each month you delay, or 12 percent per year, and you’ll pay it as long as you stay in a Part D plan. For example, should you decide not to join a Part D plan when eligible, but change your mind two years later, your monthly premium will be 24 percent higher for the entire length of time you are enrolled in a Part D plan. WHAT COVERAGE INCLUDES Each plan has its own list of covered drugs (called a formulary), and the list may change during the year. Prepare a list of the name, dosage, and cost of the prescriptions you use. Since the drugs covered vary from plan to plan, this will help you choose the best plan. Be aware that you will be required to pay the full cost of drugs not on the plan’s formulary. MEDICARE PART D: COSTS Medicare Part D participants pay a monthly premium set by the plan, an annual deductible, and co-payments. Each plan can set up its own premium and co-payments, within certain guidelines set by Medicare. Under the standard plan, in 2006, individuals will pay a premium of about $37 per month and will have a $250 annual deductible. After meeting your deductible, you are responsible for paying 25 percent of the cost of covered drugs, with Medicare making up the difference until your total drug expenditures reach $2,250. Beneficiaries are responsible for paying 100 percent of drug costs between $2,250 and $5,100. Once the $5,100 threshold is exceeded, Medicare pays 95 percent of your prescription drug costs, with no maximum benefit amount. SIGNING UP FOR THE MEDICARE DRUG BENEFIT SUBSIDY AVAILABLE TO QUALIFYING INDIVIDUALS As part of the new benefit, extra assistance is available through Medicare Part D for low-income individuals. Applications mailed this past summer will provide millions of qualifying individuals with a Medicare drug plan with little or no premiums or deductibles and low co-payments. ADDITIONAL RESOURCES AVAILABLE For additional information about Medicare Part D and how it may help you address your medical needs, contact your CPA or visit www.medicare.gov where you will find helpful information about choosing a plan. PERSONAL FINANCE INFORMATION For more information about personal financial planning, visit www.ValueYourMoney.org. While there, sign up to receive a free monthly electronic newsletter with personal finance tips on variety of topics. ABOUT TSCPA TSCPA (http://www.tscpa.org) is a nonprofit, voluntary, professional organization representing Texas CPAs. The society has 20 local chapters statewide and has 27,000 members, one of the largest in-state memberships of any state CPA society in the United States. TSCPA is committed to serving the public interest with programs that advance the highest standards of ethics and practice within the CPA profession. |
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