How to diagnose Medicare's new drug plan

Delivering word of Medicare’s new drug plan to its 42 million participants will likely thin a few forests, wrench some mail carriers’ backs and wrack more than a few brains. At 104 pages, the guide is hardly light reading.

Adding to the burden, the new Prescription Drug Plan Part D is offered through multiple private providers. While all meet or exceed a Medicare established standard, each offers different coverage options and cost structures requiring written disclosure.

“In urban-dominated states such as New York, there are now twenty different approved plan choices,” says George Kelemen, campaign manager of AARP’s MedicareRx Outreach program in Washington DC. “In more rural states, there will still be at least ten.” 

That adds up to a lot of mail—none of which even seniors with time on their hands will relish reading, let alone the sons and daughters many will give it to.  That is if the seniors are even opening this mail.

“I just received notice from my former employer explaining I’d have the option of enrolling in the Medicare Part D plan. I put it aside because I didn't feel like delving into the pros and cons,” says Elaine Robbins, a retired executive assistant living in Chicago. “I’m happy with my coverage and very lax when it comes to reading Medicare material.”  Actually, she admits to throwing away most of it unread. She is not alone.  A small, unscientific sampling found tossing is a popular choice.

Near term, tossing solicitations is a luxury only those covered under generous employer plans, paying minimal premiums, with low-to-no co-payments or deductibles can afford. Though, even they should retain the letters asserting current coverage meets or exceeds the Medicare standard. Those letters will allow future penalty-free switching. Switching may still come into play for these seniors starting in 2007, after employers rework their existing retiree plans to incorporate Part D options.

Important dates — October 1, 2005: Plan details become public and information is sent out — November 15, 2005: First day for enrollment — January 1, 2006: Programs take effect — May 15, 2006: Last day of enrollment for 2006 coverage

This year, however, the program’s primary focus is on signing up the uninsured, low- income Medicare participants, those facing catastrophic drug costs, or those with mediocre supplemental or employer coverage.

Joyce Larkin, a vice president of communications and community strategy with UnitedHealthcare Group says savings under the program will be broad-based: “Our research indicates even those with average incomes will save about $700 annually under the plan.  Lower income seniors could save as much as $1,500, or about 90 percent.”  Because of pricing discounts, even the currently uninsured are expected save after factoring in premiums, which can be less than $20.00 a month with some plans, or nonexistent for low-income seniors. 

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