Optional enrollment begins Nov. 15
posted October 1, 2005
The wide-sweeping Medicare reform bill signed into law in December 2003 will reach another milestone: Tuesday, Nov. 15, will mark the first day of the inaugural six-month sign-up period for the new Medicare Prescription Drug Plan. Over the coming months, millions of Americans are expected to sign up for the program, which goes into effect Jan. 1, 2006.
The Medicare Prescription Drug Plan, also known as Medicare Part D, is an optional program. It allows individuals entitled to Medicare Part A or enrolled in Medicare Part B to purchase a prescription drug plan from sponsors approved by the federal government. It is anticipated that everyone who signs up for the program should have the choice of at least two plan sponsors within their geographic region.
Medicare is conducting a national rollout campaign to inform Americans about the program, including the mailing of a handbook titled "Medicare and You," which provides instructions on how to join a plan.
Timing is a key issue. For individuals eligible for Medicare as of Nov. 15, initial enrollment is Nov. 15-May 15. Individuals who become eligible after Nov. 15 will have six months from their date of eligibility to enroll. Those who enroll after their initial enrollment period has expired could be subject to higher premium payments.
The standard Medicare Part D coverage, which goes into effect in 2006, provides a $250 annual deductible for drug costs. The Medicare Prescription Drug Plan will then pay 75 percent of an individual's prescription drug costs up to $2,250 annually. When an out-of-pocket expense of $3,600 is reached, Medicare then pays 95 percent of additional costs that year. The premium for this benefit is an estimated $37 per month. Individuals with limited assets and income may be eligible for subsidized premiums, deductibles, and copays.
With the introduction of Medicare Part D, benefits and regulations governing AVMA Group Health and Life Insurance Trust medical coverage for Medicare-eligible members and their families will change.
Effective Nov. 1, 2005, GHLIT Plan E—the Trust's major-medical plan for insureds who are age 65 or older—will be closed to new participants. Insureds who attain age 65 and become eligible for Medicare on Nov. 1, will continue in the major-medical plan they are enrolled in the day preceding turning age 65. Plan benefits will be paid secondary to Medicare. All insureds who attain age 65 will be charged a reduced premium rate when they become eligible for Medicare. In addition, insureds who enroll for Medicare Part D prescription benefits will be charged a lower premium rate than those who have not enrolled, to reflect lower prescription drug costs to the AVMA GHLIT.
If Medicare Part D is not elected, the AVMA GHLIT major-medical coverage will pay prescription drug expenses as primary, provided Medicare Part D coverage has not been elected.
Beginning Jan. 1, 2006, outpatient prescription drugs will continue to be covered as eligible expenses under GHLIT Plan E. Prescription drug expenses will be covered as primary by GHLIT Plan E if Medicare Part D coverage has not been elected. In the event that Medicare Part D has been elected by the insured, the GHLIT Plan E will exclude all outpatient prescription drug expenses. In those circumstances, however, a lower premium rate—initially, roughly 30 percent less than the plan's primary rates—will be charged for GHLIT Plan E. Upon receipt of evidence that Medicare Part D has been purchased, participants will be billed at the lower coverage rates, with no prescription benefits. This becomes effective the first of the month following the day the Trust office receives proof of Medicare Part D enrollment, such as a copy of the insured's Medicare Part D ID card.
Medicare-eligible participants age 65 and above should review Medicare Part D and compare the costs and benefits with their current prescription drug plan. Others should take the time to become educated about the plan now, as part of the bigger picture of planning for retirement.
The rising price of prescription drugs is a phenomenon that affects nearly every American consumer. With prescription drug prices growing faster than many other medical expenses, savvy management of costs is imperative for any health plan. The AVMA GHLIT has addressed the issue of rising drug costs through a variety of cost-containment measures, including education about the use of generic drugs.
The AVMA GHLIT encourages eligible participants to compare their current plan benefits and costs with the Medicare Part D plans offered by the sponsors within their geographic region. Medicare provides information about the plan's sponsors at www.medicare.gov. The Web site also provides information on Medicare Part D. Information can also be obtained by calling (800) MEDICARE, or (800) 633-4227.
During the coming transition months, the AVMA GHLIT will be communicating with members on a regular basis to keep them informed. GHLIT continues to make every effort to ensure that members can secure the protection they have come to expect from the GHLIT insurance program. Participants can get more information by calling the Trust office at (800) 621-6360.
For purposes of GHLIT Plan E changes, "primary" is defined as coverage that pays benefits as if the participant does not have other coverage or is the first coverage to pay benefits, and "secondary" is defined as coverage that pays benefits assuming the participant has another benefit plan that is paying first.