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The Medicare Prescription Drug Coverage, sometimes called "Part D" is here. Enrollment begins November
15, 2005. Your clients will be deluged with information and articles in the press about Plan D. Even if you are
not now Medicare eligible, you may have clients who are Medicare eligible and who will be eligible for the new
prescription coverage, which starts January 1, 2006. This newsletter will cover a few basic facts to help you
respond to inquiries.
Who Is Eligible? Anyone who is eligible for Medicare can enroll in a prescription drug plan. This outline will
cover principally individuals who are 65 and older. However, younger persons who are eligible for Medicaid,
or receive Medicare because of renal problems, are also eligible. For Medicaid clients, the Medicare
Prescription Drug Plan will replace the current drug coverage. (For those people, Medicare will automatically
enroll a person in a plan unless the individual has chosen a plan on their own.)
What Is An MDP? Medicaid Drug Plans - MDP’s - are offered by a variety of health insurance companies with a
variety of premiums and a variety of drugs offered at various co-pay levels. We are informed that 17
companies are approved for Plans in Michigan and have filed for approval of 40 different Plans. Obviously,
this can make things very confusing.
How Does A Plan Work? Each Plan has a monthly premium, which seems to be $20-40 per month. The co-
pay and deductible works this way:
$250 deductible in 2006;
Co-pay 25%-$250 to $2,250*;
Co-pay 100%- between $2,250-$5,100;
5% Co-pay for drug bills over $5,100.
*Blue Cross, for example, has a variety of co-pays for various drugs, depending on category or "tier". Blue
Cross has 6 tiers. Talk about complicated! Medicare will subsidize the insurers, but nobody really knows
what the total costs to the government will be.
What About Existing Group Plans? Some group plans are integrating with Medicare. Retired State of Michigan
employees who have a state sponsored drug plan, will be part of a Medicare Drug Plan and the old coverage
will stop (MERS). We are also informed that school retirees, who have their own plan, will have the drug
coverage integrated with Part D and that they will not have any extra monthly fee. Other group retirees, such as
auto company retirees, should check with their benefit office to see whether or how their existing plan would
be integrated with Medicare.
When Does a Retiree Enroll? The initial enrollment period is November 15, 2005 to May 15, 2006. Annual
enrollment periods for changing Plans, for example, after the initial period, will be November 15 - December
31 each year. There will be penalties for late sign-up. Six months should be enough time to study alternatives
and sign up. It is especially important for seniors with large drug bills to study alternatives for their particular
prescriptions. For people joining Medicare (i.e. turning 65), there will be an enrollment period covering seven
months:
Three months before eligibility
The month of eligibility (month of 65th birthday)
Three months after eligibility
How Does a Person Get Help? Plan Finder Tools will be posted on www.medicare.gov . The State of
Michigan has free consultation through MMAP (Michigan Medicare/Medicaid Assistance Program) at 1-800-
803-7174. This connects to a MMAP counselor at the Area Agency on Aging in Traverse City. The local
counselor can help a client choose the plan that best fits their needs. In other words, a Medicare recipient will
sign up with an individual insurance company, such as Blue Cross or United Health, for a particular plan that
is offered by that sponsor. Plans are designed for particular market segments. Seniors with relatively small
prescription needs can choose a less expensive plan. Seniors with large prescription bills and expensive
drugs will want to make sure that their particular drugs or acceptable alternatives, are covered by a specific
plan without additional co-pays.
Conclusion. Hopefully, there is enough information in this letter to help to steer your clients to competent
advisors. (We have not attempted to go into the requirements for Extra Help which is the subsidy offered by
the State based on need.) This is a confusing area for most seniors, with so many sponsors and so many
plans. It seems that individuals who are not now in a group plan will each have a fact- specific choice to make.
Where seniors are involved, our particular practice is focused on establishing Medicaid eligibility and asset
preservation. This is an area that will be changing as well. If you have senior clients who are facing a nursing
home need and are concerned with the complicated rules that effect asset preservation, please call Jim
Modrall at 231 941-9660.
©BRANDT, FISHER, ALWARD & ROY, P.C.
This newsletter is provided for informational purposes and should not be acted upon without professional
advice.
15, 2005. Your clients will be deluged with information and articles in the press about Plan D. Even if you are
not now Medicare eligible, you may have clients who are Medicare eligible and who will be eligible for the new
prescription coverage, which starts January 1, 2006. This newsletter will cover a few basic facts to help you
respond to inquiries.
Who Is Eligible? Anyone who is eligible for Medicare can enroll in a prescription drug plan. This outline will
cover principally individuals who are 65 and older. However, younger persons who are eligible for Medicaid,
or receive Medicare because of renal problems, are also eligible. For Medicaid clients, the Medicare
Prescription Drug Plan will replace the current drug coverage. (For those people, Medicare will automatically
enroll a person in a plan unless the individual has chosen a plan on their own.)
What Is An MDP? Medicaid Drug Plans - MDP’s - are offered by a variety of health insurance companies with a
variety of premiums and a variety of drugs offered at various co-pay levels. We are informed that 17
companies are approved for Plans in Michigan and have filed for approval of 40 different Plans. Obviously,
this can make things very confusing.
How Does A Plan Work? Each Plan has a monthly premium, which seems to be $20-40 per month. The co-
pay and deductible works this way:
$250 deductible in 2006;
Co-pay 25%-$250 to $2,250*;
Co-pay 100%- between $2,250-$5,100;
5% Co-pay for drug bills over $5,100.
*Blue Cross, for example, has a variety of co-pays for various drugs, depending on category or "tier". Blue
Cross has 6 tiers. Talk about complicated! Medicare will subsidize the insurers, but nobody really knows
what the total costs to the government will be.
What About Existing Group Plans? Some group plans are integrating with Medicare. Retired State of Michigan
employees who have a state sponsored drug plan, will be part of a Medicare Drug Plan and the old coverage
will stop (MERS). We are also informed that school retirees, who have their own plan, will have the drug
coverage integrated with Part D and that they will not have any extra monthly fee. Other group retirees, such as
auto company retirees, should check with their benefit office to see whether or how their existing plan would
be integrated with Medicare.
When Does a Retiree Enroll? The initial enrollment period is November 15, 2005 to May 15, 2006. Annual
enrollment periods for changing Plans, for example, after the initial period, will be November 15 - December
31 each year. There will be penalties for late sign-up. Six months should be enough time to study alternatives
and sign up. It is especially important for seniors with large drug bills to study alternatives for their particular
prescriptions. For people joining Medicare (i.e. turning 65), there will be an enrollment period covering seven
months:
Three months before eligibility
The month of eligibility (month of 65th birthday)
Three months after eligibility
How Does a Person Get Help? Plan Finder Tools will be posted on www.medicare.gov . The State of
Michigan has free consultation through MMAP (Michigan Medicare/Medicaid Assistance Program) at 1-800-
803-7174. This connects to a MMAP counselor at the Area Agency on Aging in Traverse City. The local
counselor can help a client choose the plan that best fits their needs. In other words, a Medicare recipient will
sign up with an individual insurance company, such as Blue Cross or United Health, for a particular plan that
is offered by that sponsor. Plans are designed for particular market segments. Seniors with relatively small
prescription needs can choose a less expensive plan. Seniors with large prescription bills and expensive
drugs will want to make sure that their particular drugs or acceptable alternatives, are covered by a specific
plan without additional co-pays.
Conclusion. Hopefully, there is enough information in this letter to help to steer your clients to competent
advisors. (We have not attempted to go into the requirements for Extra Help which is the subsidy offered by
the State based on need.) This is a confusing area for most seniors, with so many sponsors and so many
plans. It seems that individuals who are not now in a group plan will each have a fact- specific choice to make.
Where seniors are involved, our particular practice is focused on establishing Medicaid eligibility and asset
preservation. This is an area that will be changing as well. If you have senior clients who are facing a nursing
home need and are concerned with the complicated rules that effect asset preservation, please call Jim
Modrall at 231 941-9660.
©BRANDT, FISHER, ALWARD & ROY, P.C.
This newsletter is provided for informational purposes and should not be acted upon without professional
advice.
| WEALTH CONSERVATION: PROFESSIONAL ALERT Brandt, Fisher, Alward & Roy, P.C. |
| If you would like to receive future editions of the monthly Wealth Conservation Newsletter directly to your e-mail account, please e-mail our office using the following link: Estate Planning Newsletter |
| Brandt, Fisher, Alward & Roy, P.C. Attorneys at Law |
| November 2005 THE MEDICARE DRUG PLAN IS HERE by James R. Modrall III, J.D., C.P.A., David R. Appleford, J.D., L.L.M. (Taxation) |