Article: Read the Fine Print Before Signing Up for Medicare's Drug Benefit - from Suddenly Senior
From: "Frank Kaiser" <frank@suddenlysenior.com> Sent: Monday, December 12, 2005 5:46 PM Subject: [RxNews]
Read the Fine Print Before Signing Up for Medicare's Drug Benefit
By Albert B. Crenshaw Washington Post Sunday, December 11, 2005
Beyond the complexity of the new Medicare prescription drug benefit, health care experts have now identified another potential booby trap.
Although company-provided medical insurance has been declining -- a fact much reported in the press -- millions of retirees still have it, including drug coverage.
But some 60 percent of large employers are now saying that if a retiree 65 or older signs up for Medicare Part D, they will terminate that person's drug coverage -- and in many cases all of his health care coverage. The findings are from a study by the Kaiser Family Foundation and Hewitt Associates, a big benefits consulting firm.
Specifically, the survey of 300 companies with 1,000 or more employees found that of the companies continuing to provide prescription drug coverage (and taking a government subsidy that will be provided by Medicare), 31 percent said retirees who sign up for Part D will lose the company's drug coverage, and 29 percent said such retirees will lose all retiree medical coverage from the company.
Frank McArdle of Hewitt said there is "a combination of reasons" behind the employers' position. Some point to the administrative difficulties involved in having some workers on their plan -- for which they receive a government subsidy based on the number of retirees covered -- and some in the Medicare plan. Others don't want to lose any of the subsidy; still others view their plans as more generous than Medicare's and want to make sure their retirees stay in it.
Of course, one might assume that employees who have prescription drug coverage through their employer that is as good as or better than Medicare's would not sign up for the government program. And employers are supposed to have sent them a letter, called a "creditable coverage certificate," stating that the employer's plan is indeed as good as or better than Medicare.
(Retirees who get these certificates should hang on to them. Besides telling you your plan is as good as or better than Medicare's, the certificates will enable you to avoid a late-enrollment penalty if you sign up for Medicare Part D later on. There are also certificates of "non-creditable" coverage, which mean you could be penalized if you sign up for Part D in the future; if you get one of these you probably should sign up, but it's a good idea to check with your employer's benefits office to make sure you won't lose other coverage.)
Further, employers with these "creditable" plans are required to submit a list of their participants to Medicare, which in turn supplies it to the Medicare prescription drug plans. Thus, if a participant in such a plan turns up at a Medicare drug company, the company is supposed to notify the employer before allowing the retiree to sign up. Presumably the employer will urge the retiree not to sign up.
However, the employer cannot bar the retiree from signing up, and experts worry that despite the safeguards, "some retirees -- faced with a fairly significant change in their Medicare options -- may sign up for a Medicare prescription drug plan without realizing the potential consequences in terms of forfeiting their employer-sponsored benefits," the report said.
Some low-income retirees may face an even tougher situation.
Known as "dual eligibles," these people qualify for both Medicare and the federal-state health-insurance program for the poor, Medicaid. Some 6 million such people have been automatically enrolled in the Medicare drug plan.
"No one's quite sure how many of them have employer-sponsored coverage," McArdle said. It's probably a minority, he added, but for them all the safeguards don't apply.
Employers will get the notice from the Medicare drug plan that one of their retirees has signed up, McArdle said, but because of privacy rules, the employer won't be told the retiree was poor and enrolled automatically.
Further complicating the situation, he said, is that the right choice for such a person isn't always obvious. Dual eligibles can decline the government drug coverage if their other medical coverage is jeopardized, but the government benefits for them are quite good, so some people may be better off under Medicaid and Medicare Part D. But there is also a risk for some people that they could become ineligible for Medicaid and be worse off.
The bottom line here, for retirees of all income levels -- and their caregivers -- is to pay attention to all the notices you get concerning Medicare or Medicaid, keep them, and make sure you understand them. If you aren't sure what something means, contact your former employer or talk to an expert, such as an elder-law attorney.
Remember, every action you take, or don't take, has potential consequences now or later. Don't dismiss anything you get concerning the program as "just paper."
As Tricia Neuman, an author of the Kaiser-Hewitt study, said last week, health care coverage "is an issue that cuts to the core of retirement security."
* * *
The Internal Revenue Service said it will cut the standard rate used to calculate the deductible costs of using a car or light truck for business by 4 cents -- to 44.5 cents a mile -- beginning Jan. 1.
The agency also set the 2006 rate for medical or moving mileage at 18 cents a mile and left the rate for miles driven in service of a charitable organization unchanged at 14 cents, except for activities related to Hurricane Katrina.
The rate for business miles was 40.5 cents for the first eight months of this year. But in September, as gasoline prices soared past $3 a gallon, the IRS reset it at 48.5 cents for the last four months of 2005.
Similarly, for the first eight months of 2005, the standard rate for miles driven for medical or moving purposes was 15 cents and, except for special Hurricane Katrina rates, the standard rate for miles driven in service of a charitable organization was 14 cents per mile. For the last four months of 2005, the agency raised the rate for medical or moving purposes to 22 cents, but the charitable rate is fixed by law.
Congress, though, as part of its Katrina relief package set the rate for charities for Aug. 25 to Aug. 31, at 29 cents if the driver deducts the cost. If the charity reimburses the driver, it may pay up 40.5 cents that is not taxable. Then for September through December, the special Katrina-related rates are 34 cents for deductions and 48.5 cents for reimbursements.
For 2006, the Katrina-related charitable rates will be 32 cents per mile for deductions and 44.5 cents per mile for reimbursements.
*************************** Universal Drugstore is proud to sponsor the Suddenly Senior Rx List emails and the important information these emails provide. For more information on our sponsor please visit their website http://www.UniversalDrugstore.com/. ***************************
To unsubscribe to this Rx Newsletter, simply send a blank e-mail to Remove-rxnews@suddenlysenior.com
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(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. Suddenly Senior has no affiliation whatsoever with the originator of this article nor is Suddenly Senior endorsed or sponsored by the originator.)
----------------------------Frank Kaiser frank@suddenlysenior.com http://www.suddenlysenior.com Since 1999, America's most trusted senior citizen Website. Read by over 1.73 million monthly. ----------------------------
We never mail intentionally to anyone who has not requested being on the list. To remove yourself send an blank email to remove-rxdigest@suddenlysenior.com Thanks
Read the Fine Print Before Signing Up for Medicare's Drug Benefit
By Albert B. Crenshaw Washington Post Sunday, December 11, 2005
Beyond the complexity of the new Medicare prescription drug benefit, health care experts have now identified another potential booby trap.
Although company-provided medical insurance has been declining -- a fact much reported in the press -- millions of retirees still have it, including drug coverage.
But some 60 percent of large employers are now saying that if a retiree 65 or older signs up for Medicare Part D, they will terminate that person's drug coverage -- and in many cases all of his health care coverage. The findings are from a study by the Kaiser Family Foundation and Hewitt Associates, a big benefits consulting firm.
Specifically, the survey of 300 companies with 1,000 or more employees found that of the companies continuing to provide prescription drug coverage (and taking a government subsidy that will be provided by Medicare), 31 percent said retirees who sign up for Part D will lose the company's drug coverage, and 29 percent said such retirees will lose all retiree medical coverage from the company.
Frank McArdle of Hewitt said there is "a combination of reasons" behind the employers' position. Some point to the administrative difficulties involved in having some workers on their plan -- for which they receive a government subsidy based on the number of retirees covered -- and some in the Medicare plan. Others don't want to lose any of the subsidy; still others view their plans as more generous than Medicare's and want to make sure their retirees stay in it.
Of course, one might assume that employees who have prescription drug coverage through their employer that is as good as or better than Medicare's would not sign up for the government program. And employers are supposed to have sent them a letter, called a "creditable coverage certificate," stating that the employer's plan is indeed as good as or better than Medicare.
(Retirees who get these certificates should hang on to them. Besides telling you your plan is as good as or better than Medicare's, the certificates will enable you to avoid a late-enrollment penalty if you sign up for Medicare Part D later on. There are also certificates of "non-creditable" coverage, which mean you could be penalized if you sign up for Part D in the future; if you get one of these you probably should sign up, but it's a good idea to check with your employer's benefits office to make sure you won't lose other coverage.)
Further, employers with these "creditable" plans are required to submit a list of their participants to Medicare, which in turn supplies it to the Medicare prescription drug plans. Thus, if a participant in such a plan turns up at a Medicare drug company, the company is supposed to notify the employer before allowing the retiree to sign up. Presumably the employer will urge the retiree not to sign up.
However, the employer cannot bar the retiree from signing up, and experts worry that despite the safeguards, "some retirees -- faced with a fairly significant change in their Medicare options -- may sign up for a Medicare prescription drug plan without realizing the potential consequences in terms of forfeiting their employer-sponsored benefits," the report said.
Some low-income retirees may face an even tougher situation.
Known as "dual eligibles," these people qualify for both Medicare and the federal-state health-insurance program for the poor, Medicaid. Some 6 million such people have been automatically enrolled in the Medicare drug plan.
"No one's quite sure how many of them have employer-sponsored coverage," McArdle said. It's probably a minority, he added, but for them all the safeguards don't apply.
Employers will get the notice from the Medicare drug plan that one of their retirees has signed up, McArdle said, but because of privacy rules, the employer won't be told the retiree was poor and enrolled automatically.
Further complicating the situation, he said, is that the right choice for such a person isn't always obvious. Dual eligibles can decline the government drug coverage if their other medical coverage is jeopardized, but the government benefits for them are quite good, so some people may be better off under Medicaid and Medicare Part D. But there is also a risk for some people that they could become ineligible for Medicaid and be worse off.
The bottom line here, for retirees of all income levels -- and their caregivers -- is to pay attention to all the notices you get concerning Medicare or Medicaid, keep them, and make sure you understand them. If you aren't sure what something means, contact your former employer or talk to an expert, such as an elder-law attorney.
Remember, every action you take, or don't take, has potential consequences now or later. Don't dismiss anything you get concerning the program as "just paper."
As Tricia Neuman, an author of the Kaiser-Hewitt study, said last week, health care coverage "is an issue that cuts to the core of retirement security."
* * *
The Internal Revenue Service said it will cut the standard rate used to calculate the deductible costs of using a car or light truck for business by 4 cents -- to 44.5 cents a mile -- beginning Jan. 1.
The agency also set the 2006 rate for medical or moving mileage at 18 cents a mile and left the rate for miles driven in service of a charitable organization unchanged at 14 cents, except for activities related to Hurricane Katrina.
The rate for business miles was 40.5 cents for the first eight months of this year. But in September, as gasoline prices soared past $3 a gallon, the IRS reset it at 48.5 cents for the last four months of 2005.
Similarly, for the first eight months of 2005, the standard rate for miles driven for medical or moving purposes was 15 cents and, except for special Hurricane Katrina rates, the standard rate for miles driven in service of a charitable organization was 14 cents per mile. For the last four months of 2005, the agency raised the rate for medical or moving purposes to 22 cents, but the charitable rate is fixed by law.
Congress, though, as part of its Katrina relief package set the rate for charities for Aug. 25 to Aug. 31, at 29 cents if the driver deducts the cost. If the charity reimburses the driver, it may pay up 40.5 cents that is not taxable. Then for September through December, the special Katrina-related rates are 34 cents for deductions and 48.5 cents for reimbursements.
For 2006, the Katrina-related charitable rates will be 32 cents per mile for deductions and 44.5 cents per mile for reimbursements.
*************************** Universal Drugstore is proud to sponsor the Suddenly Senior Rx List emails and the important information these emails provide. For more information on our sponsor please visit their website http://www.UniversalDrugstore.com/. ***************************
To unsubscribe to this Rx Newsletter, simply send a blank e-mail to Remove-rxnews@suddenlysenior.com
Want to get "Monday's Best Jokes" e-mailed every week? Send blank e-mail to get-jokes@suddenlysenior.com
To get the informative and funny Suddenly Senior weekly column, absolutely free, send blank e-mail to Get-ss@suddenlysenior.com
NEW! Get the latest healthcare, Medicare and Canadian drug store news e-mailed almost every day, send blank e-mail to Get-rxnews@suddenlysenior.com
(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. Suddenly Senior has no affiliation whatsoever with the originator of this article nor is Suddenly Senior endorsed or sponsored by the originator.)
----------------------------Frank Kaiser frank@suddenlysenior.com http://www.suddenlysenior.com Since 1999, America's most trusted senior citizen Website. Read by over 1.73 million monthly. ----------------------------
We never mail intentionally to anyone who has not requested being on the list. To remove yourself send an blank email to remove-rxdigest@suddenlysenior.com Thanks
posted by Kathie Bracy at 10:32 AM
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