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.

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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Here is the easiest way to find the right prescription drug plan for you.

1. Make a list of all the medications you take. List your medications by how often you take them and brand name vs. generic.

2. Call Medicare. Ask them for the list of prescription drug providers in your area. Medicare Part D is administered by private insurance companies on a regional basis.

3. Call each of these providers to find out who is going to give you the best deal for your coverage AND covers all of your medications. The providers all charge different amounts for their monthly premium amounts and not all of them cover the same medications. Your challenge is to find a provider that covers all of your medications, has the lowest premiums, and offers you the greatest plan flexibility in your coverage.

4. Once you have found a provider that meets your needs enroll with that provider. If you want the monthly premiums deducted from your Social Security check you must initiate this process with the insurance provider. Social Security can do nothing to help you with this process, it is all handled by the insurance company.

5. Apply for the extra help with prescription drug costs. The easiest way to do this is over the Internet on Social Security’s website. Alternatively you can call Social Security and ask to apply for the extra help with prescription drug plan costs.

That’s it, you’re done! (Just do it before May 15th)

Medicare 1-800-633-4227
Social Security 1-800-772-1213
http://www.ssa.gov

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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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General Enrollment vs. Special Enrollment

General Enrollment is only open to the public January through March of each year. If you do not qualify for Special Enrollment (see below) your only option for enrolling in Medicare Part B will be the General Enrollment period. To sign up you need to fill out the General Enrollment form, HCFA-40b. (HCFA is pronounced hick-fah) You can pick up this form at your local Social Security office or have one mailed to you by calling Social Security’s toll free number.

The problem with the General Enrollment period, other than the fact that it only opens January through March, is that your Medicare Part B coverage will not start until July 1st of that year. Additionally, if you declined the Part B coverage originally and did not have group health insurance due to employment, (your employment of a family member’s) you can be charged a premium surcharge penalty. This penalty is 10% of the Medicare Part B premium amount for each year you were not enrolled in Medicare.

The Medicare Part B premium for 2006 is $88.50 per month. If you were out of Part B for one year the penalty would be 10% or $8.85. Your monthly premium for Part B coverage would then be $97.35 per month. As you can see, enrolling under General Enrollment can become quite expensive if you are assessed a penalty on your premium amounts.

Qualifying for Special Enrollment

Special Enrollment for Medicare Part B is available to qualified beneficiaries any time of the year. The coverage can be effective immediately and you will not have to wait until July as you would under General Enrollment. To sign up under special enrollment you need a Special Enrollment package, which is available from your local Social Security office or by calling the toll-free number.

To be eligible for Special Enrollment under Medicare Part B you need to have been covered by a group health plan due to current employment. The employment can be yours or that of a family member; as long as you are covered by that health insurance you are eligible for Special Enrollment. The catch is that the health plan must be due to current employment. You or your family member must actually be working; retirement policies do not satisfy this work requirement. If you are retiring and your policy is shifting from work to a retirement policy, you have a six month window to sign up for Medicare Part B. You are allowed three months before you stop work and three months after stopping work to enroll.

If you do not qualify for Special Enrollment and have to sign up under General Enrollment you must have the paperwork submitted prior to March 31st. For more information about your enrollment options, contact Social Security at their toll-free number: 1-800-772-1213.

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Medicare Part D is prescription drug coverage under Medicare. It was added as part of the Medicare Modernization Act of 2003. This plan is administered by private insurance companies for Medicare. You will need to pick a plan from a provider in your area and enroll with that company.

Medicare Part D has an annual deductible of $250. You will pay monthly premiums for the coverage and the amount you pay depends on the plan you choose. After you meet the annual deductible, Medicare will pay 75% of your prescription costs up to $2250 each year. After $2250 per year you will pay 100% of the cost until your out-of-pocket expenses reach $3600. After the $3600 level is reached you will pay 5% of your cost, or a $2-$5 co-pay, whichever is greater.

There are options for individuals on a fixed-income. Social Security offers a subsidy for Medicare Part D. If you qualify the subsidy will pay your annual $250 deductible and the monthly premiums. Depending on the level of subsidy you qualify for you may only have to make co-payments of $3-$5 at the pharmacy.

To find out if you qualify call Social Security at 1-800-772-1213 or apply online at:

http://www.ssa.gov/prescriptionhelp

Once you have applied for the subsidy, or if you are not eligible based on your income, you need to choose a plan for Medicare Part D. The best way to do this is make a list of all the medications you take, including the brands and the dosage. Call Medicare at their toll-free number (1-800-633-4227) and ask the representative for the Medicare Part D provider list in your area.

Once you have the list of providers, (Providers are private insurance companies that administer prescription drug plans for Medicare) call each of these companies with your list of medications and find out who is going to give you the best deal for the medicines you take. Be careful when selecting a Medicare Part D provider as all the plans are different and may not cover all of your medications. These insurance companies you contact will most likely try and sell you on their plans; after all they are in this to make a buck. You will need to be a shrewd consumer and shop around for the best plan for you. Don’t let a representative push you into a plan that doesn’t meet your needs.

Once you have selected the plan that covers all of your medications with the lowest monthly premiums and the best coverage, you will enroll in that companies Medicare Part D plan. If you get stuck along the way a Medicare representative can answer your questions and get you back on track. Contact Medicare at 1-800-633-4227.

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Most people who are age 65 or older are eligible based on their own employment, or that of a spouse. You qualify for Medicare coverage if you are 65 or older and receive Social Security Retirement or Railroad Retirement benefits. If you do not have ten years of work (40 quarters of coverage) to qualify for Medicare on your own record, you can qualify on a spouse’s work if the spouse is at least 62 years old and meets the ten year work requirement on their own. The spouse can be a former spouse as long as the marriage lasted for ten years or longer.

If you are a Federal, State, or local government employee that did not pay into Social Security but paid into Medicare you will be eligible when you turn 65.

If you are under the age of 65 you can qualify for Medicare coverage early if you have already received Social Security Disability benefits for 24 months. You can also qualify if you have Lou Gehrig’s disease or End Stage Renal disease.

If you receive disability from Railroad Retirement you will be eligible for Medicare after the waiting period; for more information contact railroad retirement.

If you do not meet the eligibility requirements for Medicare you can still enroll by paying the monthly premiums. To sign up for Hospital Insurance under Medicare you will be required to enroll in the Medical Insurance as well. (Both Part A + Part B)

Premiums for Medicare A and B

In 2006 the monthly premium amounts are as follows:

Part A: $393 per month
Part B: $88.50

If you will be turning 65 and are not currently receiving Social Security you should call three months before your birthday to schedule an appointment to enroll in Medicare. If you are still working and are covered by a group health plan due to your employment (or your spouse’s employment) you have the option of declining the Part B coverage so you do not have to pay the $88.50 premium. If you are already receiving Social Security Retirement benefits your Medicare will start automatically on the 1st day of the month you turn 65; you do not need an appointment to enroll.

To enroll in Medicare, contact Social Security at 1-800-772-1214.

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If you did not work and paid into Social Security and are not eligible on your own record, you can qualify for Medicare benefits off of your spouse’s record as long as they have paid into the system. If you are not eligible for Social Security Disability and qualify for Medicare, you will have to pay the monthly premiums for Medicare Part B. In 2006 this Part B premium is $88.50.

If you and your spouse does not meet the work requirements for Medicare, you can still enroll for coverage; however, you will be billed for both Part A and Part B premiums. The Medicare Part A premium for 2006 is $393 per month. Don’t let this premium amount scare you as there is a good chance your State will pay it for you if you meet their income requirements.

For more information about receiving Medicare benefits for individuals with End Stage Renal Disease, contact Social Security at 1-800-772-1213. A Social Security representative can provide you contact information for your State’s Social Services department to see if you qualify to have premiums paid by the state if necessary.

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When you become entitled to Medicare Social Security will start deducting premiums for your Medicare Parts B and D. In 2006 the premium amount for Medicare Part B is $88.50. Medicare Part D premiums vary by the plan you choose for prescription drug coverage.

If you receive Social Security Disability and SSI, or the amount you receive from Disability is low, your State may pay the Part B premiums for you. The State run program that does this is called “Qualified Medicare Beneficiary,” or QMB. To find out if you qualify for QMB, call Medicare at 1-800-633-4227.

If you receive SSI benefits only, you will not be eligible for Medicare A and B. People who receive SSI benefits are covered by their State’s Medicaid program. In some States you will have Medicare Part D for your prescriptions along with your Medicaid coverage. There are a number of States that are continuing to cover prescriptions through their Medicaid programs; if your state is one of these you will not be enrolled in Medicare Part D.

For more detailed information refer to the following article: Medicare for Dummies

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In July of 1965, the Medicare bill was signed into law, and government heath care for elderly and disabled Americans was established. There haven’t been significant changes to the program since 1965, until President Bush signed the Medicare Modernization Act of 2003. This new law added prescription drug coverage. There are now three basic parts to Medicare coverage. These parts are: Part A (hospitalization), Part B (doctor visits), and Part D (prescription drugs).

Medicare Part A

Part A of Medicare covers your inpatient hospitalization, critical access, and skilled nursing expenses. For most people there are no monthly premiums to pay; this part of the coverage is free. You will have to pay a deductible for your hospital visits. The amounts of this deductible change almost every year.

In 2006, for the first 60 days of your hospital stay, you will pay $952 to meet the Medicare deductible. After you meet this deductible, Medicare typically pays 80% of your expenses, which means you will be billed for the other 20%. If your hospital stay lasts longer than 60 days you will need to meet an additional deductible, charged each day. For days 61-90 of your hospital stay you will have to pay $238 each day to meet your deductible. For days 91-150 you will have to pay $476 each day to meet your deductible.

Medicare Continues on Page 2

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