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Health Care Reform:

Health Insurance & Affordable Care Act

Medicare Rx Benefit: Sorting Out the Options

WebMD looks at the choices facing Americans who enroll in Medicare's prescription drug benefit.

Medigap

Some seniors on Medicare get drug coverage through supplemental insurance plans known as Medigap. Medigap plans are labeled by letters from A to L.

Plans H, I, and J are the only Medigap plans that carry drug coverage, but in almost no cases do they qualify as creditable. In these cases almost all Medigap customers would be best served buying into Part D insurance, Matheis says.

Possible exceptions are so-called nonstandardized Medigap plans in Massachusetts, Wisconsin, and Minnesota. Some of these plans may be creditable, so it is best to wait for that letter from the carrier to see if that magic word shows up.

State Pharmacy Assistance

Some states have publicly-funded Pharmaceutical Assistance Programs for low-income seniors not on Medicaid. Most of those programs are expected to "wrap around" Part D, meaning that they can still help pay some of your co-payments and deductibles once you sign up for a plan. Medicare has not yet completed all of its agreements with the state plans but should have the arrangements ironed out soon.

Key Dates

Here are some important dates to remember:

  • Oct. 15 -- The approximate date Medicare expects to launch its Part D comparison resources at the Medicare web site and 1-800-MEDICARE.

  • End of October - This is the time when Medicare and employers will send letters to beneficiaries either notifying them of their automatic Part D enrollment (in the case of Medicaid) or "creditable" status of private insurance.

  • Nov. 15 - Open enrollment for Part D plans begins.

  • Jan. 1, 2006 - Part D prescription drug benefits begin.

  • May 15, 2006 - Open enrollment ends. If you're Medicare eligible and without a creditable private plan, you'll pay a 1% per month premium penalty if you sign up for Part D after this date.

Some Useful Resources

The Access to Benefits Coalition is a group of health organizations working to smooth the transition to Part D, especially for low-income seniors.

The Medicare Rights Center has useful resources and tips for beneficiaries at its web site or by calling (212) 869-3850.

AARP has published a 24-page brochure called "Medicare Rx Drug Coverage: What You Need to Know." It can be ordered on the group's web site.

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