On December 8, 2003, President Bush signed into law the Medicare Modernization Act. This is the first time in 38 years Medicare has undergone any significant changes. This Act also added a prescription drug benefit, which, along with all the other changes, does not go into affect until 2006.
The New Rx Program
In addition to the monthly premium for Part B, participants in the new Prescription Drug Program will pay an estimated $35 a month. There are four tiers to this program (keep in mind the figures below are estimates for 2006 only. They are likely to change):
• Tier One: There will be a deductible, which means you will pay 100% of the cost of your Prescriptions up to $250.
• Tier Two: After the deductible has been met, the plan will pay up to 75% until a benefit limit of $2,250.
• Tier Three: After the $2,250 is reached you pay 100% of your drug costs until $5,100 is reached. This figure is total drug spending, which means at this point you have spent approximately $3,600 out-of-pocket.
• Tier Four: At this point Medicare will pay 95% of all drug costs for the remainder of the year.
So what do I do?
Like any type of health insurance, Medicare is complex. It is important to write out what your specific needs are and any special situations that may impact your options (such as being eligible for retirement benefits or requiring Medicare before age 65.) Once you have a good understanding of the Medicare basics and your own needs, contact the administrators for Medicare and any other plans you are considering to discuss your options and what is required of you. The resources below will help you learn more.