Don't miss Medicare enrollment deadline

by Center for Personal Finance editors

NEW YORK (5/3/06)--Medicare-eligible Americans have less than two weeks to sign up for the new Medicare prescription drug plan (Part D). If you don't, and you don't have any other drug coverage, you're out of luck until next year and--worse--subject to a permanent penalty on the amount you pay each month (Money May 2006).

The deadline is May 15, yet only about a third of those eligible have signed up. Although the Bush administration may approve a bill to extend the penalty-free enrollment deadline, don't procrastinate based on speculation. The longer you wait, the longer the phone wait times for the Medicare hotline and insurance companies.

The cost savings may be worth it. On average, you may pay $1,495 without Part D coverage. With it, your bill drops to $1,081 for a savings of 28%. However, an article in USA Today (April 27) cited two recent surveys suggesting that out-of-pocket costs for some enrollees actually have increased. Among those hardest-hit are the 6.4 million low-income people who transferred from state Medicaid drug programs and who previously had no co-payments; now they may pay $1 to $5 per drug.

Don't let that stop you from doing your homework. These tips will get you started:

Find a plan. Call 800-MEDICARE to talk to a counselor, or visit medicare.gov. You'll need to provide your Medicare ID number and information on drugs and dosages you're currently taking, and you'll be given a list of plans accepted by nearby pharmacies. If you have a second home, make sure the plan also is accepted there. Then estimate your annual cost by factoring in the monthly premium, deductible and co-payments.

Check coverage for each medication. Call the toll-free number of the plan you select and verify that the drugs--and specific dosage--you take are covered by that plan. Be specific about whether you take the medication by pill, liquid or other form.

Ask about specific authorizations. For the new plan to cover the cost, is your doctor required to write a letter or fill out a form explaining why you need a particular drug? Or, does your plan cover medications with no questions asked? When choosing among plans, you may decide to pay a little more for a plan that covers you without strict requirements or authorizations.

Ask for help. Check local senior centers for professional resources, or contact your state health insurance program. Call 800-677-1116 or visit eldercare.gov.

Plan ahead. The next open enrollment period begins in six months (Nov. 15 for coverage starting Jan. 1). If you're not happy with your decision this year, or if your medications will change, you can switch to a different plan for next year. However, if you don't enroll this year, your rates will be higher if you wait to enroll for 2007. So sign up now--before May 15.

For more information, read "Six Strategies for Helping Senior Parents Manage Their Money" in the Home & Family Finance Resource Center money savvy section.