Parents may prize help in picking drug plan

PERSONAL FINANCE

December 11, 2005|By EILEEN AMBROSE

This holiday, baby boomers can give their parents a gift they really may need: help choosing a Medicare prescription drug plan.

The new drug coverage kicks in next year, presenting those 65 and older dozens of options, each with its own premium structure, list of covered drugs and participating pharmacies. One of the best tools for cutting through the maze is Medicare's drug plan comparison program at www.medicare.gov.

That's the problem. About three-quarters of older Americans have never been on the Internet, according to a recent Kaiser Family Foundation survey. Baby boomers and younger generations can provide assistance by putting their keystroke skills to work.

Alan Dorenfeld of Pikesville recently went through the Medicare online program to select prescription drug plans for his 85-year-old father and 82-year-old mother.

"It's well done, but not well done for seniors," said Dorenfeld, 60. "You have to be comfortable with the computer -- kind of like trial and error. Put data in; take data out. Let's be honest, what percentage of 85-year-olds are computer-literate enough to be able to do that?"

The enrollment period runs from Nov. 15 through May 15. Sign up before the end of the year and coverage begins Jan. 1. Enroll after the May deadline, and you'll pay a penalty in the form of an escalating premium for each month you delay.

By now, older Americans have been bombarded with materials about the new drug program and likely would welcome some help in sifting through the myriad of choices.

"That's probably what a lot of us are facing when we go home for the holidays," said Linda Rhodes, former secretary of aging for Pennsylvania and author of Should Mom be Left Alone? Should Dad be Driving?

If your parents don't have a computer, visit a library. Or, "bring your laptop and aspirin for your headaches," said Rhodes, who is helping her 85-year-old father and 90-year-old aunt select a plan.

The first step is to find out if parents have prescription drug coverage from, say, a former employer and whether that coverage will continue into next year.

Employers should have sent a letter if their coverage is "creditable," which means it's at least as good as what Medicare will offer. If your parents have one of those letters, there's no reason to change and your work is done, experts said. Keep this letter for your records. If your parents someday switch to the Medicare drug program, they won't have to pay any penalty if they are coming from a "creditable" plan, experts said.

One warning: Don't enroll parents in the Medicare drug plan without asking about their current coverage, said Deane Beebe, communications director for the Medicare Rights Center in New York. Otherwise, they could forfeit that coverage, which might be better than Medicare's plan.

If your parents don't have coverage now or an employer is dropping it, then roll up your sleeves and crank up the computer. The next step is to educate yourself on Medicare and its drug program. "It is confusing for a baby boomer. They don't understand Medicare," said Arnold J. Eppel, director of Baltimore County's Department of Aging.

Eppel's group launched www.takingcareofmomanddad.net that spells out the drug program basics and lists plans in Maryland. It also links to other sites, such as federal and state financial assistance for lower-income individuals enrolling in Medicare's drug program.

AARP's booklet, The New Medicare Prescription Drug Coverage, What You Need to Know, is available at www.AARP.org. Or, check out "Medicare and You 2006" at Medicare's site.

Plans differ, but here are some of the basics:

Participants will pay a monthly premium, with the average being $32 a month, Rhodes said.

The typical deductible is $250, meaning individuals pay the first $250 of drug costs out of pocket. After that, they will pay 25 percent of the next $2,000 in drug costs. There's a gap in coverage between $2,251 and $5,100, where individuals foot the bill on their own. This is what's called the "doughnut hole." Once prescription drug costs exceed $5,100, the plan will cover 95 percent of additional costs.

Some plans, though, have no deductibles or offer coverage during the doughnut hole.

Once familiar with Medicare terms and the drug program's basics, talk to your parents about what prescription drugs they take, the dosages and where they buy the medications.

Take each parent's medication inventory separate, because the best plan for dad may not be the right plan for mom, said Joseph DeMattos Jr., AARP's Maryland director.

This is where your Internet skills come in. Go to www.medicare.gov and conduct a prescription drug plan comparison by plugging in your parents' ZIP code, medications and doses. "You can narrow the possible universe ... from 60 to six or seven plans," DeMattos said.

The program will kick out a list of available plans, starting with the least expensive. It will break out the monthly premiums, any deductible, estimated annual costs and the names of pharmacies serving the plan.

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