When Congress authorized the Medicare program’s new prescription drug benefit, known as Part D, two years ago, it let private companies offer the coverage instead of mandating that the government provide it as it does traditional Medicare benefits. If you have been following this issue in the news or, worse, attempting to determine whether you should buy a drug plan, you know that finding the right plan can be horribly complex. The law set forth the basics of the plan, but granted private insurers great latitude in shaping the benefits.

A May 15, 2006 deadline was given for current Medicare participants to sign up for a plan. If you did not meet the deadline, you must wait until November 2006 to sign up and you will receive no benefits until January 2007; you will also have to pay a penalty. Reliable sources indicate that only if you spend less than $750 per year on prescription drugs should you consider waiting to enroll.

  • You should definitely join a plan if you have low income; you have coverage under a “Medigap” policy; or your annual prescription expenses are over $750.
  • You should not join a plan if you have a retiree policy that covers medications. You should have been notified if your plan has “creditable” coverage, which means that its drug benefit is at least equivalent to Medicare’s. If the plan is later dropped, you can join a Medicare plan within two months and not pay a penalty.
  • You will automatically be enrolled if you belong to a Medicare HMO or if you’re on both Medicare and Medicaid.

Unfortunately, this is only the start. For help with the bewildering choices that may be available to you, you may need to solicit assistance from friends, family, or perhaps even your pharmacist. Lipsitz, Ponterio & Comerford may also be able to provide you with other sources of information.

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