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Nothing But Confusion Surrounding Medicare Changes

Anyone confused by the new Medicare drug benefits for senior citizens shouldn’t blame their age. Some of the brightest brains and best informed are struggling to make sense of the prescription program that some are calling a giveaway to drug companies. Alan Maisel, chief of staff at former assemblymember Frank Seddio’s office, is well versed in the legislation but still finds it confusing. Maisel will likely be nominated as the Democratic candidate for the 59th Assembly District special election. “I have read every piece of the legislation on Medicare Part D, and I still don’t understand it,” said Maisel. “There are so many different nuances [that] people don’t know what to do.” Arnold Kahn, a principal examiner with the New York State Insurance Department, came to a meeting of Informed Voices of Canarsie Jan. 17, held at 1696 Canarise Road, to lead members through the mystifying world of the Medicare Prescription Drug Plans. Starting Jan. 1, Medicare Part D replaced Medicaid in paying for prescription drugs. Now Medicare pays for all eligible drug costs. People who do not have their own private insurance, must choose their Medicare plan by May 15 or they will face penalties, at one percent per month of what it would have cost to join the program on time. They can postpone enrollment if their existing coverage is as good as the Medicare basic plan. The next enrollment period will be between Nov. 15 and Dec. 31. There are 91 plans to choose from in New York State. Of those, 47 are stand-alone plans; the rest are connected with HMOs. With many plans available, it is important to choose the correct plan. To find their way through the minefield of choices, seniors should seek advice from a counselor. The government automatically assigned people who are eligible for Medicaid and Medicare and receive full benefits, such as Social Security, last year to a program. But this may not be the most appropriate plan for the individual. People in this position can change to one that better suits them. Seniors can opt for stand-alone private prescription drug plans, which either offer basic Medicare Part D drug coverage, or at an additional cost, provide a more comprehensive drug plan. They can also sign up with Medicare Advantage (MA), Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs), which typically provide more medical benefits at a significantly lower cost through a network of doctors and hospitals. Premiums average around $32, $5 less than originally estimated, according to Kahn. “They wanted more people to enroll,” he said. Under Part D coverage, the person pays the first $250 of annual Medicare costs themselves. Then if the patient spends between $250 and $2,000 on drugs, the plan will pick up around 75 percent of the costs. If the patient’s prescription costs are between $2,250 and $5,100, the recipient has to pay 100 percent. “That is what they call the donut,” said Kahn. “There is no coverage.” Above that, the plan will kick in again, paying 95 percent of the costs. By the time the recipient’s drug costs have reached $5,100, the patient will have paid at least $3,600 for their drugs for the year. So peculiar is this deductible and coinsurance structure that New York Times columnist Paul Krugman wrote a scathing article entitled “The Deadly Donut.” In order to calculate whether or not seniors have to pay monthly premiums under Part D, the Social Security office divides people into three income groups. For group one and two, there is no monthly premium. For group there is a sliding scale based on income. Those in group 1, with lowest income (below poverty level with limited savings) have no deductible but pay a $1 - $3 co-pay. Those in Group 2 (below 135 percent of poverty level with less limited savings) have a $250 standard deductible and $2 -$5 co pay. Those in the highest Group 3 (above 150 percent of poverty level) pay a premium and 15 percent of their drug costs. To find out which income bracket they fall into, seniors should contact the Social Security office. Medicare does not cover certain drugs, such as those for depression, obesity, infertility and cosmetics. In certain circumstances, drugs for obesity may be covered if the weight has to be lost for non-elective surgery. People are eligible for Medicare Part D when reaching 65, or disabled people who have had two years of disability. Whatever plan is chosen must be creditable, meaning that it is equal or better than the basic Medicare formula, sketched above. One such creditable plan is for New York State residents, the state sponsored Elderly Pharmaceutical Insurance Coverage (EPIC), which helps pay for prescriptions. New York State residents can join EPIC if they are 65 or older, and have an annual income of $35,000 or less if single, or $50,000 or less if married. Seniors with low incomes pay a low quarterly fee. Seniors with higher incomes meet an annual deductible. Single seniors with income up to $20,000 and married seniors with income up to $26,000 are eligible for the fee plan. Seniors with a single income of $20,000 or less pay an annual fee between $8 and $230 depending on income, while married couples earning less than $26,000 pay an annual fee on a sliding scale between $8 and $300. The deductible plan is designed to help seniors who have high drug costs. Single seniors with an income between $20,001 and $35,000 pay full price for their prescriptions until they meet an annual deductible of between $530 and $1230, depending on income. Married couples with household incomes between $26,001 and $50,000 pay deductibles of between $650 and $1715 per person. Those covered under EPIC pay co-payments of between $3 and $20 for prescriptions. EPIC will also cover medication for anxiety and depression, which basic Part D programs do not. Seniors may also get coverage for their medications under some of 10 standard top-up plans for designed for people on Medicare. Medigap plans – which include other medical costs -- cover bills that are not covered by Medicare. These, plans are labeled A to J, and are standard plans across the country. Part A is the cheapest plan with the least coverage, while Part J is the most expensive. Only plans H, J and I provide some prescriptions coverage, Kahn said. Plans H and I are not considered creditable with a limit of $1,250, while plan J is creditable with a drug benefit limit of $3,000. Retired civil servants, or union members and other privately insured people might already have creditable coverage that is equal or superior to anything Medicare can offer. Each coverage program has a list of approved drugs. Seniors should choose a plan that will cover their particular drug needs best. There are three classes of drugs, generic, brand, and formula --where doctors customize a cocktail of drugs for specific needs such as AIDS and cancer patients. People can check retail prices of drugs on www.drugstore.com or www.piillbot.com. In addition to prescription benefits, Medicare has separate coverage for hospitals and doctors. Medicare Part A helps cover inpatient care in hospitals and hospices. Most people don’t have to pay for Part A, providing they or their spouse paid Medicare taxes while they were working. And most people are enrolled automatically. Medicare Part B helps cover doctors’ services, and outpatient hospital care that Medicare Part A doesn’t cover, including physical and occupational therapists, and home health care. For Part B most people pay a premium of $88.50 in 2006. But there is a 10 percent annual penalty for each year that an eligible person didn’t sign up for the plan. Under Part B there is a $110 deductible. Seniors can get coverage through HMOs and PPOs, which provide coverage through a network of hospitals and physicians. Customers can use services outside this network, with permission, but they won’t get as well reimbursed as if they stick to what is offered under the organization’s umbrella. To be eligible for a particular program under Part A or Part B the senior must live in the service area. Most people are automatically enrolled on Medicare Part A. Social Security recipients are automatically enrolled in Medicare Part B, otherwise they can call (800) 772-1213 to find out how to enroll. For more information about enrolling in Medicare Part A, call the Social Security Administration at 1-800-772-1213. For more information on the Part D drug plan, Kahn can be contacted at (212) 480-4691 whose office is located at 25 Beaver St. “We are there to help consumers,” Kahn said. Medicare Prescription Drug Plans can be compared at www.medicare.gov. More information is available at www.ins.state.ny.us/cseniors. To find out the nearest city counseling center for Medicare Part D, visit www.nyc.gov/aging or call (212) 341 3200.The helpline can also provide advice over phone.

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