The new Medicare prescription drug plan began in January 2006. If you are currently eligible, the last date on which you could enroll without a penalty in 2006 was May 15.

Who Is Eligible?

The Medicare drug plan is available to anyone enrolled in Medicare Part A (the hospital coverage portion), and Part B (the medical coverage portion). Even if you are covered by another plan, you can switch to Medicare (if you are eligible), or Medicare will help you and your employer (if you have one) improve your drug coverage.

What Does It Cover?

The drug plan covers prescription drugs—both brand-name and generic, although you still have to pay part of the cost. Private insurance plans administer the Medicare prescription drug program. These plans must issue a list of drugs they will pay for, but they can change that list as long as they warn you that a drug will be dropped at least 60 days in advance. Plans will frequently not cover brand-name drugs for which less expensive alternatives exist. Your doctor can write a letter appealing these decisions on your behalf.

What Does It Cost?

The price of the various plans will likely increase every year, but so far the average cost has been less than $40 a month. Since some popular prescription drugs can cost $100 a month or more, this can mean great savings. However, you are generally responsible for the first $250 of drug costs each year (called a deductible). The plans also have a maximum of what you will have to pay each year in deductibles, co-payments and other fees, which may be as high as $3,600. If you purchase supplemental insurance (in addition to Medicare), such as Medicare Advantage, you may be able to obtain additional drug coverage.

What If I Am Covered by Another Plan?

Your employer must tell you whether the company plan is generally as good as Medicare's. If it isn't, you may be able to keep your current plan and join a Medicare plan, or drop your current plan completely and replace it with Medicare's.

If you decide to stay with your current plan for now but drop it for Medciare's after the May 15 deadline, you can expect to pay more. If, however, the plan you have now is as good as Medicare's, you can keep it until you are no longer covered (e.g., retirement, layoff) and then join a Medicare plan within 63 days and pay no penalty.

If you are covered by Medicare and a supplemental insurance policy, you should have been (or will be) notified of changes in the plan. If the plan is not at least as good as Medicare's, you can join Medicare without a penalty as long as you enroll by May 15, 2006.

What If I Miss the Deadline?

In most cases, if you are eligible for Medicare but do not choose a drug plan by May 15, you will have to wait until at least November to sign up, and then it will cost you more.

How Should I Make My Decision?

By answering a few questions you should be able to choose a plan that works best for you.

  • What drugs are you taking now? Does the Medicare plan you’re considering currently cover most of the costs for those drugs? (Bear in mind that coverage for specific drugs can change, or be withdrawn at any time.) It helps to make a list of all your medications and compare costs (and it's always a good idea to carry a list of your medications with you in case of emergency).
  • Does the pharmacy you use most often carry the drugs covered by the plan? Here, your pharmacist can be of considerable help in choosing the right plan.
  • How much can you realistically afford to spend on a plan each month and still save money over the course of the year?
  • Do you have all the information about other insurance coverage you have?
  • Is the plan you are considering flexible enough to change with your health needs in the future?

What If I Can't Afford Any Plan?

People with limited income and resources may be able to get extra help paying for the drug plan's monthly fee, yearly deductibles, and co-payments. The Social Security Administration may send you a letter offering these special programs, or you can call 1-800-772-1213 to apply for extra help.

Where Can I See the Plans?

The Department of Health and Human Services provides lists of plans available in all states, at http://www.medicare.gov/medicarereform/map.asp . Or you may contact your local Social Security office. In addition, local chapters of organizations advocating for the elderly community will have information on various Medicare Drug Plans.

How to Enroll

If you are already a Medicare beneficiary, the Social Security Administration ( http://www. ssa.gov ) should have sent you a letter encouraging you to enroll and outlining your drug plan options. They generally contacts eligible persons a few months before their 65th birthday. If you did not receive a letter, need more information about how to enroll, or have any questions about Medicare benefits, call your local Social Security office or your State Health Insurance Assistance Program (SHIP). Every state has a SHIP.

For al list of SHIPs, go to: http://www.medicare.gov/contacts/static/allStateContacts.asp .

To enroll in a Medicare drug plan online, go to http://www.medicare.gov and click on the new link, "Enroll in a Medicare Prescription Drug Plan." You will be given a complete list of plans in your area (by ZIP code), and may click to enroll.

You can also obtain prescription drug coverage and the rest of your Medicare coverage through a Medicare Advantage or other health plan, such as an HMO or PPO.