Feb. 23, 2005

AMARILLO – The new year is only a couple of months old. But it's not too early to start getting ready for Medicare changes scheduled for 2006, said a Texas Cooperative Extension program specialist.

Medicare's new drug benefit, also known as Part D, will start next January, said Andrew Crocker, Extension program specialist in gerontology and health. Enrollment of beneficiaries will begin in November.

"Enrollment in Medicare Part D will be optional but you may pay an additional premium if you do not enroll in the program within a certain period of time after becoming eligible," Crocker said.

"Private companies will be contracted by Medicare to offer the Part D benefit, but there will be no separate application. Medicare will help you decide which plan is best for you and process your enrollment in it," he said.

Making that decision requires a little math, Crocker said. To begin with, the monthly premium for Part D will be $35, which will be deducted from beneficiaries' Social Security checks. The plan also has a deductible of $250 each year.

Multiply the monthly premium – $35 – by 12 months per year and the annual premium comes out to $420, Crocker said. And don't forget to add the deductible.

"In the end, this benefit will cost you $670 annually before you ever receive help from Medicare," Crocker said. "If your prescription drug expenses (excluding over-the-counter medications, which are not covered) are less than $670, you will not benefit from this program."

However, people with more costly prescription medications might want to consider enrolling for Part D.

After meeting the deductible, Medicare Part D will pay 75 percent of prescription drug costs, up to $2,250 each year, Crocker said. Beneficiaries are responsible for the total cost of prescriptions between $2,250 and $3,600 annually, and Medicare will cover 95 percent of the costs above $3,600.

Confused yet? Crocker offered an example to help clear things up:

Assume your annual expense for prescription medications is $1,850. You are responsible for the premium – $35 each month or $420 each year – and the $250 annual deductible. That means after you pay the initial $670 – the amount of the annual premium plus the deductible – Medicare will pay 75 percent of your prescription medications (up to $2,250). In this case, that means 75 percent of the $1,600 that remains after the $250 deductible is subtracted from $1,850. You are responsible for paying the other 25 percent – $400.

Some low-income beneficiaries will be eligible for even more savings under Part D, Crocker said. Beneficiaries who are single and have annual incomes of less than $12,123, or married with incomes of less than $16,362, may qualify for further reductions in cost. Other beneficiaries with slighter higher incomes may also qualify.

For more information on Medicare Part D contact the Centers for Medicare and Medicaid Services at (800) MEDICARE – (800) 633-4227 – or on the Web at http://www.medicare.gov . Or contact the Texas Department of Aging and Disability Services at http://www.txcares.org or Area Agencies on Aging of Texas at (800) 252-9240.