The six-month enrollment marathon for Medicare Part D - prescription coverage - turns into a sprint to the finish this week.
More than 8 million seniors and people with disabilities have signed up for new Medicare prescription insurance plans since enrollment began in November. Others have enrolled in Medicare HMOs that include coverage.
Another estimated 8 million are eligible but lack drug coverage and haven't signed up for any of the new plans. The deadline for sign-up is May 15 - a week from tomorrow - and those who don't meet it face gaps in coverage and financial penalties if they enroll later.
Here are some basic questions and answers about the program, the deadline and the enrollment choices.
Eligibility and penalties
Who is eligible for the new Medicare drug benefit?
People over 65 and those with disabilities that qualify them for Medicare coverage.
Is there any income limit?
Anyone is eligible to sign up, regardless of income or assets. Those with low incomes get "extra help" subsidies; some don't have to pay monthly premiums, and co-payments on prescriptions range from $2 to $5.
If I'm 65 or over, am I required to enroll?
No. Enrollment is voluntary.
What happens if I don't sign up by May 15?
You have to wait until the next enrollment period, Nov. 15 through Dec. 31, and coverage wouldn't begin until Jan. 1. And you'll pay a penalty on your premiums - 1 percent of the average premium for each month of delay - for the rest of your life. For example, if you're eligible now but don't sign up until November, a seven-month penalty would add about $2 a month to your premium for as long as you're enrolled. If you waited a few years to sign up, the penalty could be significant - nearly half of the average premium if you delay four years, for instance.
Why do they impose this penalty?
Insurance works by spreading out the risk. Healthy people included in the program pay the premium but don't cost the insurer as much as sick people do. That helps keep premiums more affordable. The Medicare penalty is designed to encourage the healthy to sign up.
Does everyone have to wait until November if they don't sign up by May 15? Does everyone have to pay the penalty?
No. Those who qualify for low-income subsidies can sign up any time without a penalty. There also are no penalties for late enrollment for people who currently have prescription coverage that's as good or better than Medicare's - what the bureaucrats call "creditable coverage." Those who turn 65 between May 15 and Nov. 15, or who lose existing coverage, can sign up without penalty for up to 63 days.
Does the deadline mean my application has to be postmarked by May 15, or received by the insurance company by May 15?
Postmarked. You can also sign up by phone - at 1-800-MEDI- CARE or by calling the insurer you've chosen - or on the Internet. For phone and internet sign-ups, the deadline will be completion of the application, based on your time zone, by midnight. The Medicare phone line is open 24 hours a day, but insurance company lines may not be.
How do I qualify for that "extra help" for low-income people?
You need to apply separately to the Social Security Administration, which uses your income records to see if you're qualified. In general, you're eligible for some level of assistance if your combined savings, investments and real estate (other than your home) are less than $11,500 if you are single, or $23,000 for a couple, and your income is below $14,712 (individual) and $19,812 (married couple). Social Security will let you know if you're eligible for a full or partial subsidy; it generally takes a couple of weeks to get an answer. You still need to enroll separately in a Medicare prescription program.
I thought you were signed up automatically if you had a low income.
About 6 million people nationally with incomes low enough to qualify for prescription benefits from Medicaid and other state programs were switched over automatically. But there are an estimated 8 million or so who would qualify for some subsidy but weren't enrolled in state assistance programs. They need to enroll to get coverage.
If you have low income, are you required to enroll?
No one's required to enroll. But counselors - including critics of the program - say that low-income people should enroll, since they're not charged a premium. Even those who don't use any prescription drugs currently would be protected against future drug costs - and their benefits would start immediately.
I have retiree health insurance from my employer. Do I have to enroll now or face a penalty?
Not if your coverage is as good as or better than Medicare's. Your employer (or union, if it administers the plan) should have sent you a letter telling you whether you have "creditable coverage." If you're not sure, you can contact your employer or union and request such a letter. If the employer drops coverage later, the letter will let you enroll with no penalty within 63 days.