The underlying premise of this whole “Boomer Primer” thing was to proceed in a, more or less, orderly fashion – First, think about this; then, think about that, then…You get it.
The problem with a plan like that is that the Universe has absolutely no respect for our little plans because it has a much bigger plan of its own, and the Universe (as usual) wins. In this particular instance, the “Universe” takes the form of Medicare, which is about to super-impose “open enrollment” for Part D and Advantage Plans upon us, so – Ready or not! – Here it comes! And here we go (…well, what-the-heck, we would’ve had to go here eventually, anyway, so…).
AND, as casually mentioned last week, this year’s “open enrollment” happens from October 15th (nine days from today!) through December 7th – So much for “casual,” so here’s the short version:
Medicare Part D: “D,” as in “drug.” Drug coverage – Insurance. It isn’t run by the Feds, like Parts A or B – These are plans, run by private companies, that are approved by the Feds. There are two ways to go:
- What many of us do is have “traditional Medicare,” which means Part A, Part B, a “MediGap” plan, to pick up the 20% that Medicare “approves” (but doesn’t pay for) AND a Part D plan – Yes, it is confusing;
- What others do is have a Medicare “Advantage Plan,” which works (more or less) like a HMO, which provides all Part A and Part B coverage (usually, around here, through a “network” of providers) and (usually) Part D coverage – Yes, it is confusing.
As of this writing, we don’t know which (if any) Advantage Plans will be available in our corner of the Universe, nor do we know which Part D plans will be available; more will be revealed, which is the way of the Universe.
If you are “new to Medicare,” you get to sign up for these during the 7-month period that begins 3 months before the month you turn 65, the month you do turn 65 and ends 3 months after the month you turn 65. If you’ve been in the game for a while, you know that “open enrollment” means a specific period of time when you can change plans – “…and,” the newbie asks, “WHY would you do that?”
Well, because plans come and go, premiums change and formularies (the list of prescription drugs that a plan actually covers) change – Oops! So, the plan that was your best-friend-forever this year, may not be so great next year, get it?
If you don’t sign up for a Part D plan when you’re first eligible, you will incur a “penalty,” which is 1% of the “national base beneficiary premium” times the number of months that you dithered about, and that amount will be added to your premium (if you ever decide to sign-up for a plan) AND it will never go away. IF you have prescription drug insurance from other source (e.g. retiree insurance) and IF it is deemed equivalent to Medicare Part D coverage, you then have “creditable coverage,” which exempts you from the dreaded penalty. If this is the case, your insurance will send you a letter telling you so – KEEP THE LETTER!
The “skeleton” of Part D, which we can imagine to be in four “sections,” looks like this, using my BFF (Mrs. Jones), as an example, using 2011 numbers:
1. Mrs. Jones joins the “White Rabbit Part D Plan” on 1/1/11, and doesn’t get “extra help” (we’ll come back to that), and pays the first $310 of her drug costs out-of-pocket, plus “White Rabbit’s” monthly premium – White Rabbit pays zero;
2. Mrs. Jones pays a copayment and White Rabbit pays a bunch, until their combined amount (plus the deductible from #1 above) equals $2,840;
3. Mrs. Jones now enters the legendary “donut hole” (aka, “coverage gap”) in which, basically, White Rabbit pays zero. The tongue-in-cheek “good news” in 2011 is that Mrs. Jones got a 50% discount on “covered” (meaning that they’re on the formulary) brand-name drugs while she resides – Uncomfortably! – In the donut hole;
4. Once Mrs. Jones has shelled out $4,550, she emerges from the donut hole and enters “catastrophic coverage,” in which White Rabbit pays almost everything.
Now remember, that was the “skeleton” – Different plans look different, e.g. some plans don’t have a “coverage gap” – Will they be more expensive? Of course! And the premium has to be affordable and the formulary has to cover the drugs you take and what about this pharmacy vs. that pharmacy, and…
Right: Assuming that you don’t have the time, patience or endurance to cover the backyard with the policies of umpteen Part D plans for in-depth review, the only practical way to do this is to utilize Medicare’s “Plan Finder.” You can do this by going to http://www.medicare.gov/ and clicking on “Compare Drug and Health Plans.” It will ask you to enter the drugs you take, dosages, how much you pay, where you want to get them, blah blah, then will spit out a few of what appear to be the best plans for you, beginning October 15th.
Local lore notwithstanding, the “Plan Finder” actually works pretty well for most people, most of the time, and you don’t have to be Bill Gates to navigate it, but if you’re not comfortable with computer stuff or don’t have one or your situation is “complicated” or or or, there is now (and will be) free help available, and I’ll give you those specifics next Thursday. If you need help TODAY, call any of the numbers at the end of the column and decent people will help you – For free – Without trying to sell you anything, because they don’t have anything to sell. I promise.
We’ll venture into specifics, like “extra help,” etc. next week, which will be October 13th, which will be two days away from “D Day,” so stay calm and get this “open enrollment” thing on your “To-Do List” right now!
Look, this “Universe” is going to unfold, whether we like it or not, right? Sound a lot like “life?” Right, so we need to figure it out, deal with it and move on. Pretending it isn’t there only works with white rabbits.
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