New Medicare Act, The

Real Living with Multiple Sclerosis, May 2004 by Campbell, Teresa

How it may-or may not-help you.

THE MEDICARE PRESCRIPTION Drug Improvement and Modernization Act of 2003 was signed into law by President Bush on December 8, 2003, affecting 41 million Americans who receive Medicare benefits. The big question is: Will it do any good?

Answering that question is important for individuals who have MS; those with MS receive Medicare either because they are age 65 or because they are collecting Social security Disability. For information about the new act, you can call 1-800MEDICARE and speak to an operator by pressing "0" at the directory. The operator can answer questions and have printed information sent to you upon request.

Other options include calling the American Association of Retired Persons (AARP) at 1-888-687-2277 and visiting http:// www.aarp.org. The AARP will send you printed information about the new act upon request, too. You don't have to be a member of the AARP to ask for information or view the Web site.

You can also visit http://www.medicare.gov or http://www. feinstein.senate.gov for information. Because of numerous questions about the coverage by legislators and senior citizen groups, it's likely some aspects of the act will change before being fully implemented. Conservatives are worried about overspending and liberals contend that the benefits are too paltry. The legislation is expected to cost $400 billion through 2013-although many believe that it will easily exceed to trillions in the next century.

The complexity of the new Medicare Act runs 681 pages, inviting confusion and different interpretations of what the details mean. Some argue that enrollees will be forced into HMOs and other private plans to receive drug benefits. Others argue the new act clearly gives beneficiaries who wish to stay in traditional Medicare the right to receive drug coverage from a stand-alone drug plan, regardless of managed care alternatives in their area.

The new Medicare Act is the biggest expansion of Medicare since its creation in 1965. The act adds a prescription drug benefit, among other benefits. It also provides billions of dollars in incentives for those receiving Medicare to move into modern managed care systems that provide health care to most U.S. workers. Some view this feature as an attempt to privatize the health system and a multibillion-dollar giveaway to health insurance and pharmaceutical industries.

Private insurance plans will administer the drug coverage. However, the government will provide standard drug coverage in any region that does not have at least one prescription drug plan and one integrated private health plan.

Some of the specific expansions include:

1. Interim drug card. Beginning in June 2004 through 2005, all Medicare recipients will be eligible to buy a discount card for $30 a year that the administration estimates will save 10% to 15% off the cost of prescription medicine. Recipients with an income of $12,123 for an individual or $16,362 for a couple can apply for the card and have $600 credited to their accounts to further defray costs.

Additionally, they will not have to pay $30 for the drug card, and these recipients will not pay more than 10% of drug costs after they've spent more than $600 on drugs. The cards will be good for the rest of 2004 and 2005.

2. Main drug benefit. Beginning January 2006, the cards will be discontinued and Medicare beneficiaries can choose to: stay in traditional Medicare, a current Medicare HMO, or a retiree plan without signing up for the drug benefit; stay in traditional Medicare and enroll in a stand-alone drug plan; or enroll in a private health plan that offers drug coverage and Medicare health services.

Beneficiaries will be charged an estimated premium of $35 per month or $420 per year in the Medicare drug plan. After meeting a $250 deductible, Medicare drug insurance will pay 75% of drug costs up to $2,250. From $2,251 to $5,100, coverage effectively stops and leaves a gap without coverage ($2,850 that has to come out of your own pocket before you get any more benefits). Medicare beneficiaries enrolling in the new program will not be able to purchase Medigap insurance to help pay the drug costs that are not covered by gaps in the new act. After $5,100, 95% of costs will be covered.

Enrollment in the plan is voluntary. Critics point out that the new plan neither limits the prices drug companies can charge nor permits Americans to import drugs available more cheaply abroad.

Each individual will have to figure out their drug costs to determine if the new Medicare drug plan will benefit them. In general, if drugs cost you less than $810 a year you're better off not participating in the plan.

3. Low-income Medicare recipients. Premiums, deductibles, and coverage gaps will be waived for individuals earning less than $12,123 a year (or $16,362 for couples a year). They receive the entire low-income coverage, and those who earn up to $13,470 ($18,189 for couples) will also receive significant assistance. To qualify for the subsidy, Medicare recipients can have no more than $6,000 in assets, not including a house. American Association of Retired Persons (AARP) estimates about 13 million of today's Medicare beneficiaries will be helped by the bill's low-income and catastrophic provisions. It also estimates 1.8 million beneficiaries will not be eligible for assistance because their assets are too high.