Блог Анкара

In This Chapter

^ Determining whether your other drug coverage is creditable under Medicare rules

^ Choosing between your current coverage and Part D

^ Using your current coverage to fill gaps in Medicare drug coverage

^ Factoring in free or low-cost drugs from other sources

M F you’re one of the millions of Americans who already have insurance for prescription drugs, it’s of utmost concern to know what will happen when you become eligible for Medicare. Will you lose your current drug coverage? Can you keep it? And if so, do you need to give Part D a second thought? This can be a head-scratching time, and maybe even a cause for real anxiety.

But don’t reach for the Valium yet (regardless of whether your prescription plan covers it). In this chapter, I explain the importance of finding out where your current coverage stands in relation to Part D — a step that’s essential in figuring out what to do next. Maybe you won’t have to do anything and can forget about Part D for now — but you can’t assume this without first finding out the facts of your own situation and how Part D rules apply to it. If you need to decide whether to stay with your present coverage or switch to Part D, I suggest some pros and cons to think about. I also explain the different kinds of drug coverage that can be used at the same time as Part D and how they fit together.

But first, you need to understand what counts as "other prescription drug coverage." I’ve heard people talk about "my coverage" or "my plan" when what they mean is some method of obtaining low-cost drugs that isn’t actually coverage at all. Coverage Equals Insurance — in other words, a system that guarantees you protection from some of the costs of prescription drugs in the future as well as now. For quick reference, look at Table 6-1. It shows which methods of obtaining drugs count as coverage and which don’t. I highlight those that are Not Coverage, and how they compare with Part D, in the last section of this chapter.

Finding Out Whether Your Current Drug Coverage Is Creditable

Creditable Is another of those Part D-speak words that you’ve probably never come across before. Creditable — not to be confused with Credible (meaning believable) — means something that can be credited or counted. Under Medicare rules, your current drug coverage is creditable if it counts as being at least as good as Part D coverage. This rule really matters. If the coverage you have now Is Creditable, you probably don’t need Part D. If it’s Not Creditable, you’ll need to make some careful decisions.

Bear with me for a moment while I explain more accurately what creditable coverage actually means. The common definition I just used — "at least as good as Part D" — is a convenient shorthand, but it’s also misleading. For example, I’ve heard people wonder why their employer drug coverage is regarded as "better than Medicare’s" when it’s actually costing them more — "If it’s better, shouldn’t I be paying less?" Or, conversely, wondering why their coverage isn’t creditable when it seems a whole lot better than Part D — "Hey, mine has no doughnut hole!" The answer is that creditability has nothing to do with whether you, as an individual, get a better deal under your own plan than you would under Part D. Instead, it’s a matter of accountancy. Your plan is considered creditable if whoever sponsors it pays at least as much money overall for everybody in the plan as Medicare would.

So in the following sections, I consider each kind of drug coverage listed in the first column of Table 6-1, how it fits in with Part D, and how to find out

Whether it’s creditable. What you need to do as a result of this information is detailed in the later section "Deciding Whether to Stay with the Coverage You Have or Switch to Part D."

Drug coverage from a current or former (nonfederal) employer

I’m assuming in this section that you’re an employee or retiree who has drug coverage based on employment in a private company, nonprofit organization, or state or local government. If you’re a federal employee or retiree, whether military or civilian, you can go to the later section "Drug coverage for federal employees and retirees."

What happens to your drug coverage when you retire?

Ever since Part D began in 2006, employers or unions have had a choice of several different drug coverage options for their retirees.

U The great majority of employers have continued their own coverage, not least because, under Medicare law, the federal government pays them large subsidies to do so.

U Some employers have modified their coverage so it fits in with Part D. (See the later section "Having It Both Ways: Using Part D as Well as Your Own Drug Insurance" for more details.)

U Relatively few employers have dumped drug coverage entirely, obliging their retirees to fall back on Part D — though this may occur more in the future.

So what may happen when you retire? Possible options include U Your current coverage remains available to you.

U Your current coverage ends, but your employer or union agrees to Wrap around Medicare drug coverage by paying some or all of your out-of-pocket expenses in any Part D plan that you choose.

U You’re required to join a specific Part D plan as a condition for continuing to receive healthcare benefits from your employer or union. These benefits may or may not cover some or all of your out-of-pocket expenses in Part D.

U Your current coverage ends, but your employer or union contributes a lump sum annually toward your Part D expenses. This amount is subject to tax.

U Your current coverage ends, and your employer or union makes no contribution to your out-of-pocket expenses in Part D.

As you approach Medicare age, the administrator of your health plan or your employer’s human resources department should let you know your options for health and drug coverage in retirement.

What happens if you retire before age 65?

Remember that you can’t join Medicare before turning 65 (unless you qualify at an earlier age because of disability), as explained in Chapter 1. So if you retire before you reach 65, you need to find out what health and drug coverage (if any) your employer or union will make available to you in the years or months that remain until you can join Medicare and enroll in a Part D plan.

If you won’t be covered at all during this period, you may qualify for the COBRA program, Which allows people to buy between 18 and 36 months of continuing coverage after they’ve left or lost jobs that provide health insurance. To find out more about COBRA, go to the U. S. Department of Labor’s Web site at Www. dol. gov or call the agency in your state that deals with labor and employment.

What happens if you work beyond age 65?

In many cases, employees with health and drug coverage who remain employed after they reach retirement age continue to receive their benefits until they retire, regardless of age. However, some employers require employees to switch to Medicare (and to Part D for drug coverage) as soon as they become eligible at age 65, even though they’re still working. (If you work for a company or organization with 20 or fewer employees, you’ll probably be required to enroll in Medicare when you reach 65, as explained in Chapter 1.) Sometimes employees’ spouses who are younger than 65 continue to receive the plan’s coverage until they, too, reach Medicare age. Your employer will notify you of any required changes before you turn 65.

How do you find out whether your drug coverage is creditable?

If you continue to receive full employer – or union-sponsored drug coverage in retirement or while working after age 65, you need to find out whether your coverage is creditable. You also need to know this information if you turn 65 when you’re receiving COBRA temporary health insurance after losing or leaving a job. COBRA counts as employment-based coverage, so it comes under the same Part D rules.

The Medicare law requires your employer or union (or COBRA insurer) to inform you in writing whether your current drug coverage is creditable and, if so, whether it continues to be creditable from year to year. Your plan may provide this info in a letter, in its regular annual brochure, or in its Evidence of Coverage document that gives details of your coverage for the following year.

U If the notice says your coverage is creditable (or "at least as good as Medicare Part D coverage," which is intended to convey the same thing), you don’t need to join Part D at this time.

U If the notice says your coverage is Not Creditable, it may or may not describe alternative options for you, but either way, you need to think carefully about what you do next. I cover points for you to consider in the later section "Deciding Whether to Stay with the Coverage You Have or Switch to Part D."

This notice about creditability is hugely important. If you don’t receive it, call the plan administrators or your benefits department and insist that they provide this info in writing, as the law requires. (Most retiree plans can be relied on to send such notices, but employers sometimes forget to send them to employees who are still working.) If you’re told your drug coverage is creditable, make sure you keep the written confirmation in a safe place — together with any follow-up mailings in subsequent years saying that your coverage continues to be creditable. Hanging on to these notices is a sensible precaution, because if you lose your creditable coverage, you may need to prove that you had it in order to join Part D without incurring a late penalty. (I explain the late penalty and its implications in Chapter 8.)

Drug coverage for federal employees and retirees

If you qualify for medical coverage through current or former employment with the federal government, you receive prescription drug coverage in one of two ways:

U Federal Employees Health Benefits Program (FEHBP): Drug coverage under this program for civilian federal workers, retirees, and their dependents is considered creditable. (For information or help on FEHBP benefits, go to Www. opm. gov [or to Www. opm. gov/retire if you're retired] or call toll-free 888-767-6738.)

U TriCare for Life (TFL): This Department of Defense healthcare program is for active duty and retired members of the military who are enrolled in Medicare, and for their dependents. Drug coverage under this program is considered creditable. (For information or help on TFL benefits, go to Www. tricare. mil or call toll-free 800-538-9552.)

With drug benefits from either of these programs, you do Not Need to join a Medicare Part D plan. And if you lose this coverage, you can join a Part D plan without penalty as long as you begin Medicare coverage within 63 days of losing FEHBP or TFL benefits, as explained in Chapter 8.

You can be in either of these programs and have Part D at the same time (without losing FEHBP or TFL benefits) if there’s any reason to do so. One reason may be if your income is low and you qualify for Extra Help under Part D. For more details on using both sets of drug coverage, see the later section "Having It Both Ways: Using Part D as Well as Your Own Drug Insurance."

Veterans drug benefits

If you’re a veteran and enrolled in the healthcare system run by the U. S. Department of Veterans Affairs (VA), your prescription drug coverage is creditable. You do Not Need to join a Part D plan. This is also true of the CHAMPVA (Civilian Health and Medical Program of the Department of Veterans Affairs) program, which is available to a spouse, widow or widower, or child of certain veterans who were killed or disabled in the line of duty. In either program, if you lose this coverage, you won’t pay a late penalty on joining Part D as long as your Medicare coverage starts within 63 days of losing VA coverage.

However, Medicare rules allow you to be enrolled in the VA system (including CHAMPVA) and in Part D at the same time. This can be an advantage, as I explain later in this chapter.

For more information or help on VA health and pharmacy benefits, go to www. Va. gov/healtheligibility, visit a local VA medical facility, or call the VA

Health Benefits Service Center toll-free at 877-222-8387. For CHAMPVA

Information, go to Www. va. gov/hac or call 800-733-8387.

Medicaid drug coverage

Iijj|kB£* If you’ve been getting drugs from your state under Medicaid (also known by other names in some states, such as MediCal in California, MassHealth in Massachusetts, and TennCare in Tennessee), you can’t continue to do so after you become eligible for Medicare. Medicaid coverage is certainly creditable. But under the law, as soon as you turn 65 (or qualify for Medicare at an earlier age through disability), you must receive your drugs from Medicare Part D, not Medicaid.

You’ll also automatically qualify for very low-cost coverage under Part D’s Extra Help program. If some of the drugs you need aren’t covered under your Part D plan, you may still be able to get them from Medicaid. Both of these scenarios are explained in detail in Chapter 5.

Drug coverage from a State Pharmacy Assistance Program

Many states have programs to help people pay for prescription drugs. But only some State Pharmacy Assistance Programs (SPAPs) offer drug coverage comprehensive enough to be regarded as Qualified (which is different from creditable) under Part D rules. SPAPs become qualified if they meet Medicare requirements, the most important one being that they must coordinate with Part D by wrapping around it any extra benefits that they provide. (In 2008, 23 states have qualified SPAPs, according to Medicare: Colorado, Connecticut, Delaware, Florida, Illinois, Indiana, Maine, Maryland, Massachusetts, Missouri, Montana, Nevada, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont, Virginia, Washington, and Wisconsin, plus the U. S. Virgin Islands.)

Coverage from a qualified SPAP is definitely creditable. But this doesn’t mean you can choose to get coverage from an SPAP instead of Part D. If you’re already in a qualified SPAP, you’ll be expected to join Part D — and, most likely, to apply for Extra Help — as soon as you become eligible for Medicare.

That’s hardly a problem. Being enrolled in a qualified SPAP may greatly improve your Part D coverage in some or all of the following ways, depending on the specific program:

U Lowering your out-of-pocket costs: Some SPAPs pay some or all of Part D premiums, deductibles, and/or co-pays.

U Offering low-cost coverage even if you don’t qualify for Part D’s Extra Help program: SPAPs’ income limits are generally higher than those required for Extra Help — and usually there are no asset tests — so you have a greater chance of qualifying, as explained in Chapter 5.

U Providing coverage in the doughnut hole even if you don’t qualify for Extra Help: Any payments an SPAP makes for your drugs in the coverage gap count toward your Part D out-of-pocket limit, as explained in Chapter 15.

U Covering needed drugs that aren’t covered in your Part D plan: Some SPAPs also cover drugs that Medicare excludes, such as barbituates and benzodiazepines, as explained in Chapter 4.

U Coordinating coverage with Part D as seamlessly as possible: I explain the ins and outs of this later in this chapter.

If you become eligible for Medicare while you’re in an SPAP, the program will inform you of what you need to do about Part D, help you enroll in a plan, and, if appropriate, help you apply for Extra Help.

Drug coverage for Native Americans

If you’re an American Indian or an Alaskan Native Elder who gets prescription drugs from the Indian Health Service, a Tribal Health Organization, or the Urban Indian Health program, your drug coverage is creditable. You’ll be able to join a Medicare Part D plan down the road without paying a penalty. (But be sure to get a letter from your Indian healthcare provider saying that you have creditable coverage.)

Right now you may be getting your drugs free or at low cost from an Indian health pharmacy if you’re enrolled in one of these programs, and this won’t necessarily change when you become eligible for Medicare. You aren’t required to join a Part D plan. However, it would be a big help to your community if you do. That’s because the drug plan pays part of the cost of your prescriptions — and pays almost all of the costs, in fact, if you qualify for Part D’s Extra Help program. This stretches the precious federal dollars that support your local clinic, allowing it to provide needed care for more people in your community.

As you approach age 65, visit your clinic or contact the benefits coordinator of your health program to talk over what it would mean for you to join a Medicare Part D plan and, if your income is limited, to apply for Extra Help.

Drug coverage from Medigap insurance

Medicare beneficiaries can buy private insurance policies to cover some out-of-pocket expenses of Medicare Part A and Part B and to fill in some gaps in Medicare coverage. These policies, known as Medicare supplementary insurance or Medigap, are explained in Chapter 1. Until Part D began on January 1, 2006, some of the policies included coverage for prescription drugs. But the Medicare law prohibited new policies with drug coverage from being sold after that date; it also barred people from having this kind of policy and being enrolled in a Part D plan at the same time. So if you still have a Medigap policy with drug coverage, it means you bought it before 2006 and haven’t yet joined Part D.

Most Medigap policies aren’t considered creditable compared with Part D. The standardized policies that include drug coverage — designated H, I, and J — are definitely not creditable. But some plans in Massachusetts, Minnesota, and Wisconsin (and some older policies dating from the 1980s and earlier in other states) may be creditable. You’ll have received a notice from your insurer saying whether yours is creditable. If it isn’t, you have the right to keep your policy — but you’d have to pay a late penalty (as explained in Chapter if and when you decide to join a Part D plan for your drug coverage. I cover the implications of this in the later section "Understanding the Medigap dilemma."

Drug coverage from individual insurance

People who are self-employed or who receive no group health coverage from their employers sometimes purchase individual health insurance policies. Such policies are the most expensive kind of health coverage on the market, so even people who can afford them are often relieved to give them up when they become eligible for Medicare.

If your coverage includes prescription drugs and you want to continue it after joining Medicare, you need to contact your insurer to find out whether it’s creditable under Part D rules. If it is creditable, you don’t need to join Part D. If it’s not creditable, joining a Medicare drug plan now would allow you to avoid a late penalty if you were to join one later on, as explained in Chapter 8. You can have individual insurance with drug coverage and be enrolled in Part D at the same time, as described later in this chapter.

Deciding Whether to Stay with the Coverage You Have or Switch to Part D

Stay or switch? Strangely enough, this decision doesn’t only affect people whose coverage isn’t creditable compared with Part D. As the costs of health insurance in general, and prescription drugs in particular, continue to climb, many retirees who are on fixed incomes but have employer or other coverage are beginning to find their health insurance less and less affordable. In some cases, Part D may offer a less expensive option. (See the nearby sidebar "What were they thinking. . . when they ‘allowed’ employers to dump drug coverage?" for more information.) But if you’re in either of these groups, you need to be aware of all the consequences before deciding which way to go. Look before you leap — and look before you stay.

In the following sections — assuming that you already know whether your current drug coverage is creditable — I outline what you need to consider when deciding what to do next. For quick reference, Table 6-2 shows at a glance whether different types of drug coverage are creditable and what action you may need to take, if any.

Table 6-2 What You Need to Do about Part D, Depending on Your Current Prescription Drug Coverage

Type of Drug Coverage Creditable or Not? Action Required

Employer or union Depends on plan 1) None, if plan

Benefits for current coverage is creditable.

Employees or retirees 2) If not creditable, must

Decide whether to keep it or switch to Part D, unless switching would affect medical benefits. 3) If required for people of Medicare age, must join Part D as condition of continuing to receive medical benefits.

A Part D plan after becoming eligible for Medicare.

Decide whether to add Part D. Can choose to have both existing plan and Part D coverage.

What were they thinking. . . when they "allowed employers to dump drug coverage?

Employers can generally do what they want about health and drug coverage, unless they’re bound by a cast-iron union contract. Most employee health insurance comes with a caveat — the employer reserves the right to change the terms from year to year or end coverage completely. And as the cost of healthcare has risen inexorably, employers have been faced with three choices — eat the costs themselves, pass on more costs to employees and retirees, or terminate benefits. The result is that employer health insurance and retiree benefits,

Traditionally the cornerstone of the American health system, are steadily shrinking.

So what has been Part D’s impact? Experts on health benefits are unanimous in saying that without it the situation would be far worse for retirees. That’s because Congress didn’t "allow" employers to dump drug coverage. Far from it. Congress actually gave a big incentive to employers to continue offering creditable retiree drug coverage after Part D went into effect — in the form of tax-free subsidies

(continued)

(continued)

Amounting to an average of 28 percent of their retirees’ drug costs. The result was that 82 percent of large employers took the subsidy and continued drug benefits.

After Part D began in 2006, I invited readers of the AARPBulletin To recount what had happened that year to their own retiree drug coverage. Hundreds sent in their stories. At one end of the spectrum was a fortunate retiree in California who said he was still getting the same generous coverage he’d been promised on retirement in 1990 — zero premiums, deductibles, and co-pays. At the other end were people who’d lost drug coverage they’d had for years and understandably blamed Part D: "We were thrown to the wolves," said one. Between these two extremes were many experiences that threw light on some developments that retirees hadn’t expected.

Although some reported their premiums had gone down, many others said they were paying more — and sometimes the premium hike had been so great that some suspected a deliberate attempt to force them out of the plan and into Part D. Naturally, they wondered why their insurance was costing more when their companies were now getting fat federal subsidies. One reason, benefits experts say, is

That the Medicare law didn’t require the subsidy to be used to reduce retirees’ share of the costs — or even specify how it should be used at all. Another reason is that in recent years many employers and unions have put caps on healthcare spending, so when it passes a certain point, the extra costs automatically trigger a rise in premiums for everybody in the plan.

Some of these retirees, even with creditable coverage, chose to drop their employer’s plan and join a Medicare drug plan; and some reported saving enough money on premiums that they hoped would exceed any expenses they’d encounter in the doughnut hole, which hadn’t existed in their company plans. Others found that they couldn’t give up their drug coverage without also terminating their health coverage, not only for themselves but for spouses under age 65. And some found themselves in a single company-designated Part D plan that they were obliged to join as a condition for continuing to receive health insurance. "It’s been a learning experience," one man said with feeling. Even so — at a time when benefits are shrinking and out-of-pocket costs are rising — Part D now provides a safety net for retirees that wasn’t there before.

Considering the other factor: Medical benefits

»5#|kBE0 If you’re thinking about switching to Part D at all, your number-one 4Y\M\ Priority is to find out What will happen to your medical benefits If you do so.

Most employer or union health insurance combines medical and drug coverage into one package — for you alone, or comprehensively for you, your spouse, and any dependent children — with a single premium. Of course, there are many variations. But whatever kind of deal you have, these are the questions you should get answers to, depending on your circumstances, as soon as possible:

If I drop just my drug coverage, will I also lose my (and my family’s) medical benefits?

If I drop my drug coverage, will my spouse (and/or dependent children) lose medical and/or drug benefits if he or she is under age 65?

I If I drop my drug and/or medical coverage, will I be able to get it back again if I want to return to my present plan?

I If I enroll in a Part D plan because my drug coverage isn’t creditable, will I (and my family) automatically lose my/our medical benefits?

If I’m expected to enroll in a specific Part D plan as a condition of continuing to receive drug coverage, will I lose my (and my family’s) medical benefits if I choose to enroll in a different Part D plan?

These are critical questions. Chances are that your plan’s benefits manager will send you a notice before you turn 65 and each year afterwards informing you of your options for the next year under the plan’s rules. But if you haven’t received such a notice, or remain unsure of the rules, contact the plan immediately to find out where you stand.

If this all sounds too gloomy, let me say that some employer and union plans are more flexible than these questions may suggest. Some do allow enrollees to continue receiving medical benefits even if they drop drug coverage. Some plans will continue benefits for a spouse under age 65 who isn’t eligible for Medicare, even if the enrollee is no longer covered by the plan. And some plans allow enrollees who have dropped out to return at a later date. But, in general, these dispensations are more likely for Medicare-age people who are still working than for retirees.

If you have federal drug coverage under FEHBP, TFC, or the VA, you can choose to have Part D without risking any of your benefits. But be aware that if you’re a retiree with FEHBP or TFC and you cancel it entirely, you can’t get it back.

In the following sections, I delve into the details of two typical situations: when your drug coverage isn’t creditable but switching to Part D is scary because you’ll lose your medical benefits, and when your drug coverage is creditable but difficult to afford.

If your coverage isn’t creditable but switching is risky

What if your employer or union drug coverage isn’t creditable, but dropping it means losing your medical benefits as well? This is a real Catch-22 situation. Basically, you have three options:

Stay with your plan and hope that its drug coverage will continue for as long as you need it. If drug benefits, or the plan itself, are terminated in future years, you’ll face a late penalty upon joining Part D, as explained in Chapter 8.

Stay with your plan and also enroll in a Part D plan (which means paying an additional premium) to avoid a late penalty in the future if you lose or drop your current coverage.

Check with your plan to be sure that enrolling in Part D doesn’t automatically terminate your current drug and medical coverage. If it does, this isn’t really an option.

I Drop out of your plan and switch to Part D for your drug coverage and Medicare for your medical benefits. Before doing this, look closely at your plan’s medical coverage and compare it with your potential costs and benefits under the traditional Medicare program (on its own or with a Medigap supplementary policy) or a Medicare Advantage health plan, as explained in Chapter 9.

If your coverage is creditable but hard to afford

Before throwing out your creditable drug coverage, you’d be wise to carefully compare what you have now with what you’d get under Part D. Maybe your current benefits are difficult to afford because the premiums are much higher than they used to be — probably a lot higher than Part D premiums. But be cautious here and consider these points:

I If you’re married and your spouse is covered under your plan, you’re probably paying a single premium for both of you. In contrast, under Part D you’d each have to pay a separate premium.

I Part D has a gap in coverage (the so-called "doughnut hole," which I cover in detail in Chapter 15), and your present coverage almost certainly doesn’t. If your costs are high enough to take you into the doughnut hole, this can greatly affect what you pay out of pocket for your drugs over a whole year. So you need to compare your likely Overall Drug costs under your present plan with those in the Part D plans that are available to you. I explain how to do this in Chapter 10.

And what about your medical benefits? This question isn’t as crucial for some people as others. Some retirees say that medical coverage under their union or employer plan isn’t worth much anyway. But you still need to compare those benefits with traditional Medicare, with or without a Medigap policy, or a Medicare Advantage health plan, as described in Chapter 9 — especially if, under the rules of your current plan, you can’t get it back after you’ve given it up.

Determining whether Extra Help can help

The Extra Help program provides comprehensive coverage that’s less expensive than almost any drug benefits you could get elsewhere. (I say "almost" because a lucky few still pay absolutely nothing for their drug coverage under employer or union retirement plans.) So if your income is low, it’s worth finding out whether you qualify for Extra Help, which I cover in detail in Chapter 5.

,\NG/

If you think you may qualify, don’t do Anything About your current coverage until you’ve applied for Extra Help and received a letter saying that you’re eligible — because you don’t want to jump out of the plane (or in this case the Plan) Without a parachute. Also, you need to know whether you qualify for full or partial Extra Help. Compared to your current drug coverage, full benefits may give you a better deal, but partial benefits may not.

What if you do qualify? Remember that you can get Extra Help only if you join a Part D plan. So all the questions I raised in the earlier section "Considering the other factor: Medical benefits" about how joining Part D may affect the medical side of your health coverage apply here too. If they do, you should ask your benefits administrator whether any exceptions are made for people who qualify for Extra Help.

But the most important factor in considering Extra Help is whether you’d have to drop your current coverage and, if so, whether you could get it back again if you needed to in the future. Some employer and union plans allow people to return. For example, the federal health plans (FEHBP, TFL, VA, and CHAMPVA) don’t require enrollees to drop drug coverage if they join Part D, whether or not they receive Extra Help. Anyone else should check with their current plan, because Extra Help doesn’t automatically continue year after year. If your circumstances change — for example, if your income rises above the limits — you could lose it.

Understanding the Medigap dilemma

If you still have Medigap supplementary insurance that includes coverage for prescription drugs, And You know that this coverage isn’t creditable under Part D rules, you already face a late penalty if you switch to a Medicare drug plan now. (Ouch!) So should you stay with your Medigap policy or cut your losses and switch to Part D? Here are some points to consider:

U The premium for your Medigap policy will probably increase a lot as the years go by. This is because no new policies that include drug coverage have been sold since the end of 2005 and, by law, can’t be sold in the future. Also, the majority of people who had these policies before 2006 switched to Part D then. So over time, fewer and fewer people will be enrolled in your plan. As the enrollment pool dwindles, premiums for those who remain in the plan are likely to increase.

U The longer you postpone signing up for Part D, the more expensive it’ll be when you do finally join the program. The late penalty becomes larger each year that you delay, as explained in Chapter 8.

I Medigap plans with drug coverage are expensive, and premiums may rise as you get older. If you switch to a Medigap plan Without Drug coverage, your premium would be reduced substantially. You’d save more than you’d have to pay for Part D premiums, which don’t vary according to age.

If you decide to switch to a Part D plan, remember that you can normally do so only during open enrollment from November 15 through December 31 each year. So if you miss this window one year, you’d accrue another 12 months of added late penalties before being able to sign up for Part D the next year. However, if you lose your Medigap coverage through no fault of your own — such as the plan ceasing business — you can sign up for a Part D plan at other times of the year.

What about the medical benefits of your Medigap policy? If you drop drug coverage from your current Medigap plan, you can choose to stay in it for your medical benefits on the same guaranteed terms. Alternatively, you can change to a different Medigap plan. Doing so may mean paying a higher premium, especially if you have a pre-existing health condition, though some insurers may voluntarily waive such requirements in these circumstances. (To find out more about the Medigap plans available to you, go to www. Medicare. gov and click "Compare Medigap policies in your area.")

Having It Both Ways: Using Part D as Well as Your Own Drug Insurance

Having health insurance that wraps around Part D is useful because it fills in some or all of the gaps in Medicare drug coverage. Under current Medicare law, you can’t buy specific wraparound coverage for Part D in the same way that you can buy Medigap insurance to use with Medicare Parts A and B. Getting such coverage depends entirely on the health benefits you already receive.

In the following sections, I explain how different types of insurance fit with Part D. In most cases, you enter a complex and sophisticated system known as Coordination of benefits. This is intended to streamline the process so Part D enrollees with other drug coverage pay what they should for prescriptions at the pharmacy without having to file separate claims. Medicare’s automated system records the details of each person’s coverage under different insurers, and pharmacists can access this information instantly by computer. (To see what to do if this system doesn’t work as intended, turn to Chapter 14.)

Medicare will send you a questionnaire, soon after you join the program and once a year afterwards, asking what other health and drug insurance you have, if any. You absolutely must fill out this form (legally, you’re required to) and return it. Providing this info ensures that all the details of any extra coverage you have are entered into the system so your benefits and required payments can be coordinated properly. (This applies to medical coverage as well as drug benefits.) Medicare encourages plan sponsors (such as employers) to file this information too, but doesn’t require it. So filling out the Medicare questionnaire is an important safeguard. It helps ensure that you won’t pay more than you need to. If you don’t receive this form, or if you lose it, call Medicare at 800-633-4227 to ask for one.

Employer or union coverage

If your employer or union plan no longer provides full drug coverage of its own, it may offer help by paying any (or all) of these expenses:

I All or some of your Part D premium

I All or some of your Part D deductible

I Your Part D co-pays (in total or up to a dollar limit)

I All or some of your out-of-pocket costs in the Part D coverage gap

Many employers or unions that provide wraparound coverage coordinate with Medicare. But some may require enrollees to pay out of pocket at the pharmacy and then claim reimbursement. Even if your plan coordinates with Medicare, keeping your pharmacy receipts is a good idea — at least until you know the coordination system is working smoothly, and especially after you’ve joined a Part D plan for the first time. The Explanation of Benefits statements that you receive from your employer/union plan and your Part D plan should reflect who has paid for what.

Federal drug benefits

Drug coverage from the Federal Employees Health Benefits Program (FEHBP) or from the military’s TriCare for Life program (TFL) is much more generous than Part D. However, you and any covered dependents of Medicare age can be in a Part D plan at the same time if it would be an advantage — for example, if you qualify for Extra Help, because neither program offers additional benefits for enrollees with low incomes. If you do join Part D, your coverage will be coordinated with Medicare in the following ways:

Iu FEHBP: If you’re retired, Medicare is the primary payer. This means that your Part D plan pays for covered costs first; your FEHBP plan pays whatever remaining costs it agrees to pay under its rules. If you (or your covered spouse) are still working, FEHBP is primary.

IU TFL: Medicare is the primary payer, whether you’re retired or still on active duty. TFL does Not Pay Part D premiums. But it does pay your out-of-pocket expenses for drugs that are covered under the TFL formulary. These include deductibles, co-pays, and the costs of drugs not covered by your Part D plan. If you should fall into the doughnut hole (as explained in Chapter 15), your TFL coverage becomes primary; you then pay the standard TFL co-pays for your prescriptions.

Veterans drug benefits

VA drug coverage, like the federal drug benefits in the preceding section, is also much more generous than Part D. The VA system covers more drugs than any Part D plan, has no premiums and much lower co-pays, provides coverage all year round (no doughnut hole), places an annual cap on co-pays for some veterans, and charges no co-pays for those with limited incomes who qualify. The only snag is that generally you must go to a VA facility to have a VA doctor write a prescription, and many vets live hundreds of miles from the nearest facility. Also, eligibility rules for getting VA healthcare (including prescription drugs) change from time to time.

The CHAMPVA program is somewhat different. You can fill prescriptions at retail pharmacies for 25 percent of the allowable cost, or get maintenance drugs free through the Meds by Mail program. No additional benefits are available for enrollees with low incomes.

Both programs allow you to enroll in Part D if you want to. Here’s how each fits in with Part D:

IU VA: You can choose whether to have Part D or the VA help pay for your drugs on a prescription-by-prescription basis. There is no coordination of benefits between the VA and Medicare, but all you need to do at the pharmacy is show either your Part D plan card or your VA health benefits card. Of course, you can’t use both for the same prescription. The VA doesn’t pay Part D plan premiums.

IU CHAMPVA: Medicare is the primary payer, but CHAMPVA pays up to 75 percent of the cost of your Part D co-pays at retail pharmacies, or 100 percent after you’ve met an annual $3,000 out-of-pocket limit. You aren’t eligible for the no-cost Meds by Mail program. CHAMPVA doesn’t pay Part D plan premiums.

Coverage from State Pharmacy Assistance Programs

State Pharmacy Assistance Programs (SPAPs) that are qualified under Medicare rules (as explained earlier in this chapter) are required to coordinate benefits with Medicare. If you’re in one of these programs, any extra benefits you receive are wrapped around Part D coverage, and SPAPs generally try to make the process as seamless as possible.

You should be able to get your prescriptions filled without having to bother about whether Part D, Extra Help, the SPAP itself, or, in some cases, Medicaid is actually helping to pay for them. If you have any reason to think you’re being charged incorrectly, contact your SPAP for help.

Individual health insurance

Is there is any reason to stay with health insurance you buy yourself instead of switching wholesale to Medicare and Part D? There may be, if you have dependents not yet of Medicare age and if dropping coverage yourself may mean having to apply again for insurance for the rest of the family, maybe on less favorable terms. You need to check the consequences with your insurer.

If you decide to stay with your policy and enroll in a Medicare drug plan, you need to contact your insurer to see how it fits in with Part D — for example, whether your insurance is primary or secondary and whether your policy will cover some or all of your out-of-pocket Part D expenses. If the insurer doesn’t coordinate benefits with Medicare, you may have to keep your pharmacy receipts and send them to your insurer for whatever reimbursement is allowed.

Factoring in Drugs from Other Sources

In the absence of insurance for prescription drugs, people turn to a variety of other sources to get them at less than retail cost. Often this happens in that twilight zone where uninsured folks in their late 50s and early 60s begin to develop health problems requiring medications but have not yet reached Medicare age. If you’ve been in this situation but are now approaching 65, you may be of two minds about what to do next. Perhaps you can’t wait to leap into the Medicare prescription drug program and start getting some help with costs. Or you may be among those who are just plain suspicious of Part D, or concerned that it’ll cost too much or be too much of a hassle to navigate — so why not stay with the system you’ve got?

I consider each of these alternative sources in some detail in Chapter 16 and cover how you might use them together with Part D, especially if you fall into the doughnut hole. But here I ponder a different question: Should you continue using them Instead Of joining Part D?

Certainly, doing nothing may seem easier than going to the trouble of choosing a Part D plan. But some other considerations may be more important: cost and certainty, for example. Here are some questions to ask yourself about your current method of obtaining prescription drugs:

IU Will it provide the drugs I need reliably and indefinitely?

IU Will it pay most of the costs if I suddenly need very expensive medications?

IU Will it pay most of the costs if my income is very limited?

0K!

Most noninsurance sources aren’t reliable in the long term. Low-cost drugs from medical clinics, patient programs, charities, and state drug discount programs may decline through lack of funding. Free samples from doctors depend on which drugs, and for how long, the drug manufacturers offer them. Free or low-cost drugs directly from the manufacturers often come with time limits — and there’s no guarantee they’ll supply another drug you may need in the future. Pharmacy discounts — even those $4-per-prescription offers from some supermarket pharmacies — cover only a limited selection of drugs. Even drugs from Canada or other countries may be disrupted if the drug manufacturers succeed in blockading the trade, or the source countries try to stop it, or U. S. Customs intercepts supplies to American customers — all of which has happened.

Nor do any of these methods provide catastrophic coverage against very high drug costs, or continuous help for people with low incomes in need of multiple drugs, as Part D does. Not that Part D is perfect — far from it. But on the whole, except for the doughnut hole, it provides the certainty of insurance coverage. Having Part D And Using one or another of these alternative sources to supplement it if necessary, as explained in Chapter 16, may be a better way of covering all the bases long term.

Chapter 7

The 5th Wave By Rich Tennant

"Okay – lei’s play the statistical probabilities Oi This situation. There are A o£ Us and 1 o£ him. "Phillip -will probably start screaming, "Mora vrill probably ■£aint, you’ll probably yell at me Ior Leaving the truck open, and there’s a good probability I’ll run like a – weenie i-£ he comes toviard us."

In this part. . .

Change from percents to decimals, and you have a problem that can be solved using arithmetic processes. The problems that I introduce in this part all involve basic arithmetic principles — no big surprises. Use the formulas. Count the money. Combine the ingredients. Measure the temperatures. The formulas and math are here.

Chapter 5

The 5th Wave By Rich Tennant

" Lei’s see if – we can identify some of the stress triggers in your life. You mentioned something aloout a large – wolf that periodically shovrs up and attempts to blow your house dovm…1′

1%

In this part…

■# ou’ll get to grips with what CBT stand for and why it’s W~ Such a hot topic among mental health professionals. You’ll get a good idea of how your thinking about events leads to how you feel. We’ll get you started on recognising and tackling your negative thought patterns, and give you some tips about exerting control over your attention.