Berkshire Senior Online

Homepage -- Programs and Services -- Contact Information

January 2004 Monthly News

Will the new Medicare drug benefit help or hurt? 

Q. Will the new Medicare drug benefit help you?              

A. The drug benefit may help you if you do not currently have drug coverage and your drug costs are over $810. However, whether it helps will depend upon three factors: whether insurance companies offer coverage at a reasonable premium; whether the drug benefit from your insurance company, or if not available, one from the government, will cover the drugs you need; and whether you can get your drugs cheaper through a discount drug plan or buying them from Canada.

Q. Will I be worse off with the new benefit if I already have drug coverage?

A. It is projected that as many as 9 million people will lose more comprehensive prescription drug coverage as a result of this bill, including people with retiree coverage and people with coverage from their states.

Q. When will I be able to get drug coverage from Medicare?

A. The new drug benefit will begin in 2006. A Medicare drug discount card will go into effect in Spring 2004.

Q. What premium will I pay for drug coverage?

A. No one yet knows what the monthly premium will be because no insurance company has ever offered a stand-alone drug policy before. Some people say $35 a month ($420 a year) in 2006. However, the premiums could be substantially higher. Different companies will likely charge different premiums and cover different drugs. Premiums can raise a lot from one year to the next.

Q. Will I have full drug coverage?

A. No. Your drug coverage will be limited and is likely to shrink over time. In 2006, on top of the monthly premium, you will pay the first $250 of your drug costs each year. After that, if your drugs are covered, you will pay 25% of the cost of the drugs, which will be more expensive than they are today. If your drugs are not covered, you will need to pay their full cost. Your drug coverage will stop completely, when your total drug costs reach $2,250. However, if your total drug costs are more than $5,100, after you spend another $2,850 of your own money, your coverage will start again, at that point covering 95% of the cost. You will pay either a co-payment of $2 for every generic drug prescription and $5 for every brand-name drug prescription that is covered, or five percent of the cost of the drug, whichever is greater.

After 2006, your premiums can raise a lot, the deductible you pay can also increase significantly, and the coverage gap can grow.

Q. Will I get extra help with drug coverage if my income is low?

A. It depends. If you have Medicaid, you will lose your Medicaid drug coverage and get help with the Medicare drug premium, deductible and coinsurance. However, the Medicare drug benefit may not cover the drugs you need. If you do not have Medicaid, but have an income under $12,123 ($16,362 for a couple) and assets under $6,000 ($9,000 for a couple), excluding your home and a car, you will also get some help. If covered, your generic drugs will cost $1-2 a prescription and brand-name drugs will cost between $3 and $5 a prescription.  

Q. How do I get the Medicare prescription drug benefit?

A. It’s not yet completely clear. It appears that you will need to sign up for the Medicare Part D benefit when you are first eligible for it. If you have Original Medicare, you will then need to choose a Medicare drug plan. If none is available in your area, you will get the drug benefit through the government directly. If you are enrolled in a Medicare private plan like an HMO or PPO, they will likely provide you with the benefit. If you do not sign up for the drug benefit when you are first eligible, it is projected that you will pay a 30 percent premium penalty for every year you delay enrollment.

 Q. Will the Medicare discount drug card help me?

A. Between March or April 2004 and the end of 2006, you will be able to pay $30 for a discount drug card that may save you some money on your prescription drugs. However, you may be better off with the discount card you are currently using, getting your drugs from the Veterans Administration if you qualify, or buying them from Canada.

Each card will offer some savings on some drugs and each card will be different. So, it will be very hard to choose which card, if any, to buy. If your annual income is below $12,123 ($16,362 for a couple), you will be able to get a discount card for free and will also receive $600 worth of free drugs, although you will need to pay 5 to 10 percent of the cost of each drug you buy.

Q. Will drugs be cheaper through Medicare?

A. No. The Medicare law specifically forbids the government from doing what all other group health plans do: negotiate with pharmaceutical companies for lower priced drugs.  

                                  Congressional Budget Office Estimate

                                      Of New Prescription Drug Benefit 

 This information was provided by the Medicare Rights Center, which was founded in 1989, and is a major independent source of information and assistance on health care rights and benefits for older and disabled men and women in the United States. For more information visit the MRC web site: www.medicarerights.org.