Medicare Part D Enrollment Deadline - May 15th - What to Look For When Choosing a Prescription Drug Insurance Company Program

April 23rd 2006

Medicare Part D

Potential Medicare Part D Drug Plan participants have about three weeks to choose a company to avoid paying a penalty. The May 15^th deadline is approaching and Medicare is in their final push to help enroll seniors, aged 65 and older. It is estimated that between 60 and 75 percent of those seniors that can benefit from the program have enrolled, depending on location.

Medicare has added additional staffing to their hotline number as the deadline approaches. Participants can call 24 hours a day, seven days a week, and talk to a staff member. The Medicare toll free number is: 1-800-633-4277. You can also check with your local senior’s center for possible classes or seminars.

There are numerous drug plans available. Participants need to list all of the drugs they take, both generic and name brand, before they determine which plan works best for them.

According to PricewaterhouseCoopers LLP, beneficiaries with average incomes can save about $700 per year. Senior with low incomes could save an average of $1,500 per year. Of course the savings will be different depending on the individual, but those that take a lot of medicines should save the most.

You will need to write down all of your prescriptions before you compare plans. The lowest priced plan may not be the cheapest plan for you. If you don’t take any prescription drugs, you might want to choose the cheapest plan before the deadline to avoid a late enrollment penalty. That penalty will become a permanent fee attached to each monthly premium.

The penalty amounts to 1 percent of the state average (some experts say it is the national average and others believe it could be the regional average) premium for each month you delay enrollment after May of this year. The penalty is determined by how many months you delay before enrollment. For instance, if you wait until 2011 to sign up, you will have to pay a penalty that factor’s in the 60+ months that you did not join.

So if the state average premium is $40 a month at the time you enroll in 2011, and you choose a plan that costs $30 a month, your monthly premium will be $30 plus $26.80 (that's 66 percent of $40 – assuming you waited 66 months), or a total of $56.80. So it may be better to enroll now rather than wait, even if you do not require prescription drugs.

The biggest insurance companies may not offer the best plans for you. Consider the co-pays before you decide, and make sure that the drugs you take are covered by the plan.

Not everyone needs to sign up for Part D. Some seniors may have an HMO that covers prescription drugs. The Medicare drug benefit is voluntary, but eligible seniors who don't sign up by May 15 will incur a financial penalty when or if they do sign up someday.