If you are one of the fortunate that has deciphered Medicare Part D and enrolled in a plan, you should apply for the extra help.

The “Extra Help” is a subsidy Social Security will place on your record if you qualify.

When you qualify for the extra help your out-of-pocket expenses will be greatly reduced.

When you enroll in a plan without the extra help from Social Security your plan costs include premiums, deductibles, and a “gap” in coverage.

Monthly Premiums: The average premium is $37 per month or $240 per year. This premium varies depending on the plan you select.

Annual Deductible: There is a $250 annual deductible you must meet before the coverage starts. This means you will pay $250 at the pharmacy before Medicare pays a dime.

The Gap: This plan has a gap in coverage. Once you reach $2,250 in drug costs you will pay 100% out-of-pocket until you reach $3,660 in drug costs. Above $3,660 of your annual drug expenses you only pay 5% of the cost of your medicine, or $2-$5 co-pays, whichever is greater.

This gap is going to be problematic for many seniors on fixed incomes. This is why you must apply for the “Extra Help” through Social Security.

Medicare Part D Coverage with Extra Help

If you qualify for the full subsidy of “Extra Help” your costs for the plan are listed below.

Monthly Premiums: Zero dollars

Annual Deductible: Zero dollars

The Gap: No gap in coverage. You will only have to pay $1-$2 co-pay for generic drugs and $3-$5 co-pay for brand drugs at the pharmacy.

As you can see coverage with the extra help from Social Security is much better. The extra help is dependent on your income and money in the bank. Social Security does award “partial extra-help” for those above certain income limits; do not assume you will not qualify if you have some money in the bank. To find out if you qualify for the extra help with prescription drug plan costs call Social Security at 1-800-772-1213.

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• How Do I Sign Up For Medicare?

Medicare coverage can be very expensive. Premiums for Medicare Part B are $88.50 per month in 2006. If you sign up for Medicare Part D your premiums can cost $35.00 per month or more depending on the plan you choose. Not only do you have to pay these premiums for Medicare, but they go up every year!

Is there any help paying these ever-rising premium costs? The answer is yes; however, it depends on your income. There are two programs that could help pay your Medicare premiums. One is a Social Security program and the other is your State’s program.

For assistance with your Medicare Part B premium, you may be eligible to have your State pay the $88.50 for you. The program is called “QMB” or “Qualified Medicare Beneficiary.” Your state will evaluate your income to see if you qualify. To see if you qualify for QMB contact Social Services in your state and ask to apply for QMB. If you need contact information for your State, Medicare can provide you the number to call. Contact Medicare at their toll-free number: 1-800-633-4227.

Medicare Part D has a monthly premium and an annual deductible of $250. If you qualify for Social Security’s extra help with prescription drug plan costs, you will not have to pay this premium or deductible. Social Security will consider your monthly income and any money you have in the bank to determine if you qualify. You should apply even if you think you may be over the income limit as Social Security awards partial subsidy amounts for people in certain income categories. To apply for the extra help with prescription drug plan costs, contact Social Security at 1-800-772-1213.

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Related Articles at Medicare:

• How Do I Sign Up For Medicare?