February 2006
What you need to know about Medicare Part D
For many seniors who have struggled to pay for their medication, the benefit promises to be a boon. Yet the sheer number of offerings and the complexity of the coverage make finding a good plan a giant pain in the neck. "It' s a hostile market for any consumer," says Robert Hayes, president of the Medicare Rights Center, a New York City-based advocacy and service organization. With pitches coming from TV commercials, brochures at pharmacy counters, mail solicitations, and sales agents trying to cross-sell and upsell everything from memberships in HMOs to hearing aids, misinformation abounds. Some independent sales agents have told seniors that they work for Medicare, while others have offered illegal cash payments as an inducement to sign up. Sometimes there is no information. When we telephoned First United American Life Insurance Co. about its plan, the sales agent could not say whether or not the company' s policy had a deductible, a fact that customers should know before deciding whether to buy. When Congress authorized the drug benefit two years ago, it let private companies offer the coverage instead of mandating that the government provide it as it does traditional Medicare benefits. The law set forth the basics of the plan but granted great latitude in shaping the benefits to private insurers, HMOs, pharmacy benefit companies, and associations like AARP. The result is a market free-for-all that makes it difficult for consumers to make apples-to-apples comparisons of the 40 or 50, or even 60 plans that they may be offered in their areas. decisions, decisions, decisions The choice of plan, however, is only the last in a series of considerations that Medicare participants will face. In Should you join? we lay out the factors that should determine whether or not you buy a drug plan. If you decide to buy a plan, however, you are likely to find yourself bothered and bewildered by the complexities of the new benefit. For example, plans come in three flavors--standard, equivalent (also called basic alternative), and enhanced--but, inconveniently, not all companies use those names consistently, if at all. Worse, premiums provide no guide to the benefits you will get under any plan. A low-premium plan that falls into the bucket of equivalent plans might be a better deal for you than a standard plan with a similarly low premium. If a company has low premiums in general, its enhanced plan could cost less than a standard plan at some other company. For help, you can call Medicare at 800-633-4227, but you have to endure a series of recorded messages before you can get to a human being who will be able to answer all of your questions. You're better off using Medicare' s Web site, at www.medicare.gov. If you' re not adept with a computer, you should recruit a friend or relative to guide you. But before you go to either the phone or the computer, you'll need to consider the choices presented in the remainder of this report.
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