More on the new Medicare Program

Q) How does Medicare Part D work?

A) Medicare Part D is the newest edition to Medicare. Part A covers hospitalization and Part B covers medical treatment. In order to be eligible, an individual must be age 65 or permanently disabled. Eligibility begins on the first day of the individual’s birth month when he or she becomes age 65. Whereas individuals can begin receiving Social Security benefits at age 62, such is not the case with Medicare.

There is no premium for Part A, however Part B does have a premium, as does the new Part D. For the first time under Part D, beneficiaries can pay directly to a private insurer instead of the government, and the benefits are administered in the private sector too.

The basic Medicare Part D works this way. All Rx costs up to a $250 deductible are paid by the insured. Then Part D pays 75% until $2250 has been paid out by the insurer (US Gov’t). After this, any Rx expenses between $2250 and $3600 are paid by beneficiaries. Once the $3600 ceiling is reached, Medicare then pays 95% of pharmacy expenses. Medicare recipients at the poverty level are excluded from the above, and receive far richer benefits.

Insurers participating in the Medicare Part D program must offer benefits equal to or better than the above, and so far most are. By the end of December 2005 I will be certified to write plans issued by Mutual of Omaha in several states. Notice I said certified. Normally we just become licensed by filling out paperwork and waiting for licensing approval by the insurer. In the case of the new Medicare program, we must be certified, code word for test. So far premiums with Mutual of Omaha run between $18.24 and $50.48 depending upon geographic location and the choice of which of their three plans is chosen. For more information, please click on the link below.

http://www.cms.hhs.gov/FamilyFirst051118c-N.pdf