New Medicare $600 Drug Benefit Is Hard To Grasp

Saving money can be a tough thing. The recently passed Medicare modernization law helps certain elders save money, but the law is confusing and difficult to understand. The money-savings involve two related parts: The Transitional Assistance Program (TA) and temporary discount drug cards. With the TA benefit, Medicare will provide a $600 drug credit in 2004 for a single person with an annual income up to $12,569 ($16,862 for a couple). If your income is at the poverty level ($9,310 for one person, $12,490 for a couple), you will receive the $600 credit but you will only have to pay a 5 percent co-payment for your medications. If your income is above the poverty level, but still qualifies you for TA, you will have a 10 percent co-payment for medications and the $600 credit. However, to receive the $600 benefit at either income level, you must have a Medicare-Approved Drug Discount Card.

Confusing? It continues! To qualify for the $600 benefit, you must not receive drug coverage from other sources, including Medicaid or group health insurance—except if your drug coverage is through a Medicare HMO plan or a Medigap supplement plan. You must sign up for a discount drug card and the $600 credit at the same time. Be prepared to submit income, retirement, and health benefits information.

And, there are more details! You can only enroll in one approved discount card program at a time, and you can only change cards once, between November 15 and December 31, 2004. If you move out of the discount card area, switch your Medicare health plan, or go in or out of a nursing home, you can also switch cards. All discount cards offered in Massachusetts will cover the whole state. Most prescriptions purchased at retail pharmacies are eligible for discounts and the $600 credit. Syringes and medical supplies for insulin injections are also covered. The $600 cannot be used to purchase over-the-counter drugs.

If you do not use up the full $600 credit in 2004, the unused portion will roll over to 2005, and a second $600 benefit will be added. The program will begin June 1, 2004 and will end at the start of 2006.

Still confused? I can see why. Thankfully a web site will allow people with Medicare to compare prices, fees, and other card program features. You should go to www.medicare.gov or call 1-800-MEDICARE. The web site offers a “Guide to Choosing a Medicare-Approved Drug Discount Card.” The Medicare program has selected 28 card sponsors, plus 84 Medicare-managed care plans that will offer cards to their members only.

Massachusetts officials have said they will encourage everyone in the state-run Prescription Advantage plan to sign up for the $600 TA benefit. To find out what cards are offered in Massachusetts, and how to enroll for the $600 credit, contact the SHINE (Serving Health Insurance Needs of Elders) program at MVES.