Medicare maze

Welter of drug plans poses difficult, critical choices


"In the state of Maryland," Jeannette Krapcho began, "you have 67 choices."

The room at the Ellicott City Senior Center rippled with nervous laughter. Sixty-seven choices? With different monthly premiums? Different drugs covered? Different out-of-pocket charges?

"It does make shopping a bit complex," Krapcho, coordinator of insurance counseling for the Howard County Office on Aging, conceded to the roomful of seniors.

From the audience, Beverly Crovo of Ellicott City, flipping through a thick booklet from the federal Medicare agency, asked about a chart on page 97-J that says with one of the choices for the new Medicare drug benefit, the patient would pay "$5 to $28 co-pay and/or 25 percent coinsurance." Krapcho, generally an unflappable font of knowledge, admitted she wasn't sure.

"It's like the old saying: You almost have to be a Philadelphia lawyer to understand," Crovo said.

Tuesday, the sign-up period opens for the first-ever Medicare drug plans, leaving some 43 million people (most older than 65, some younger but with disabilities) to puzzle seriously over that chart on page 97-J.

No wonder seniors - nationally, as well as in Ellicott City - are confused and that many don't plan to sign up.

A poll conducted in late October and released Thursday by the Kaiser Family Foundation and Harvard School of Public Health found that 36 percent of seniors said they had enough information to understand how the new benefit would affect them. And 20 percent said they would sign up, compared with 37 percent who said they don't plan to enroll and 43 percent who said they weren't sure.

The choices are complex and the design of the new benefit was contentious, but there is consensus among analysts and advocates about how to approach the decision.

First, there is agreement that the choice matters.

"There could be a difference of thousands of dollars between making a really good decision and a really bad decision," said Joseph R. Antos, a health researcher at American Enterprise Institute.

Antos and his colleagues compared costs among the 43 plans available in Cleveland for a patient using five common medications. The estimated annual cost to the patient - premiums, deductibles and co-payments - ranged from $891.35 to $3,538.56. Using the same five medications and the Baltimore ZIP code 21212, results were similar. The patient could pay as little as $888.09 or as much as $3,105.48, according to price information on Medicare's Web site.

Second, there is agreement that not choosing also matters.

Those who don't sign up, then get hit by big drug costs, could miss out on thousands of dollars in government help. And those who don't sign up by May 15 but want to join later get slapped with a penalty of 1 percent a month. (If they already have retiree coverage that's equal to or better than Medicare's, the penalty doesn't apply.)

Someone who joins 18 months after the initial sign-up period pays an extra 18 percent in premiums every month as long as he remains in the program.

"Don't let the confusion lead you not to do anything," advised Marilyn Moon, director of the health program at American Institutes for Research and a former Medicare trustee.

As confusing as the choices may be for seniors, there is help.

The Medicare Web site gives pricing information on each medication for each insurer, as well as premiums and deductibles. The information is also available from the Medicare toll-free phone number and from local Senior Health Insurance Assistance Program (SHIP) counselors such as Krapcho.

Here's advice to seniors from advocates and experts on how to navigate the choices:

Don't rush.

"What we're telling people is to take their time," said Vicki Gottlich, senior policy attorney at the Center for Medicare Advocacy. "Do some difficult calculations; there's a lot of math involved. Figure out what kind of benefit structure works for you."

There's no single best plan.

"What's going to be good for you," Krapcho told the Ellicott City seniors, "is not necessarily good for a friend or a neighbor."

The plan with the lowest monthly premium won't necessarily be the best deal. A key to choosing a plan is to find out how much medications would cost.

In Maryland, the monthly premiums on prescription plans range from $6.44 to $68.91. But for many seniors, the prices on the drugs will be at least as important as the monthly premiums or the deductibles in determining which plan is best.

Many plans have three different out-of-pocket charges: for generic drugs, for "preferred" brand-name drugs, and for other brand-name drugs. For example, one of the plans from CareFirst BlueCross BlueShield has a $5 co-payment for generic drugs, $25 for preferred, and $64 for nonpreferred (for a one-month supply).

Each insurer has a different preferred list. In addition to the "tiers" of charges, some plans require approval in advance for some expensive medications, or demand "step therapy" - trying and failing with a cheaper drug before the plan will pay for the higher-cost one.

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