PRESCRIPTION DRUG PLA

Monday, July 18, 2005

Seniors, watch for drug-benefit letter

By Tim Bonfield
Enquirer staff writer

HOW IT WORKS

For lower-income seniors, there will be a two-step process to get signed up for the new Medicare drug plan. The first part - determining if you qualify for government help - has already begun.

To qualify, a single senior can earn up to $14,355 a year in income. That includes Social Security checks, pensions, alimony, rental income and other sources.

Seniors also must meet an asset test. Single seniors cannot have non-income assets above $11,500. The values of homes and cars are not counted in the asset test. But all other savings and investments are counted, including 401(k) accounts, mutual funds, stocks, bonds and vacation homes.

Insurance plans to cover up to $1,500 in burial expenses would not be counted as assets. But life insurance policies with "cash surrender values" that exceed $1,500 would be counted as assets.

Seniors who still live as couples will be able to earn $19,245 in income, and have up to $23,000 in assets.

People with disabilities and seniors with dependents, such as grandparents raising grandchildren, will be able to exclude some of their income and still qualify.

In addition to the letters, which come with an application form, many community groups will be holding information sessions in the next few months about the new Medicare benefits. Applications also are available through local Social Security Administration offices.

It will take up to 30 days to hear back from the government about whether you qualify for extra help.

The second big step - actual enrollment in the Medicare Part D plans - begins Nov. 15. People who already are seniors, but choose not to sign up, will face increasing costs if they enroll after May 15.

For additional information, check http://www.medicare.gov/ or call (800) MEDICARE. For senior groups and other organizations interested in hosting an information session, call Sue Denny at (513) 357-5507.

RELATED STORIES

• Seniors get word on drug benefit

WHO GETS THE LETTERS

Here's where more than 135,000 Medicare letters are going in our area:

ZIP codes starting with 452: These areas, which include nearly all of Hamilton County, will get 62,805 letters

ZIP codes starting with 450: These areas, which include parts of Butler and Warren counties, will get 29,604 letters

ZIP codes starting with 451: These areas, which include parts of Clermont, Adams, Brown, Highland and Clinton counties, will get 22,507 letters.

ZIP codes starting with 410: These areas, which include parts of Kenton, Boone and Campbell counties in Northern Kentucky, will get 21,043 letters.

Source: Gannett News Service

More than 135,000 low-income senior citizens in Greater Cincinnati and Northern Kentucky will receive letters from now through August urging them to sign up right away for a federal program that will save them hundreds, perhaps even thousands, of dollars a year on prescription drugs.

Starting next year, Medicare - the federal health system for the elderly and disabled - will launch a prescription drug coverage program. Called Medicare "Part D," the plan represents the biggest change in the Medicare system since it was launched in the 1960s.

Starting in November, all seniors will be invited to enroll in one of the new, privately-run drug coverage plans. But before then, millions of low-income people are being urged to apply for "extra help," or subsidies that will sharply reduce out-of-pocket expenses that come with the new program.

Nearly 850,000 notices are going out in Ohio. Locally, more than 60,000 letters are going out in Hamilton County. Nearly 30,000 are going out in Butler and Warren counties. More than 22,000 are going out to people in Clermont, Adams, Brown and Highland counties. More than 21,000 are going to Northern Kentucky.

The letters are being sent according to the last few digits in Social Security numbers. Mailings began in May and will continue through August, said Social Security Administration spokeswoman Sue Denny.

Many seniors and consumer groups remain skeptical about how much help the new drug coverage plan will be for better-off seniors, or those who already have drug coverage.

For well-off seniors, the new benefit will cost about $37 a month. There also will be co-payments, a deductible, and a "doughnut hole" that will provide no coverage for drug spending between $2,250 and $5,100 a year.

Whether such coverage adds up to much help in an era of soaring medication costs remains an issue of hot debate between senior citizen groups and the Bush administration.

In many cases, consumer advocates say seniors will be better off sticking with drug benefits they already have, be they supplemental Medicare plans bought out-of-pocket, or coverage through employer pension plans (assuming the company maintains such benefits).

But for the many seniors who have no drug coverage and struggle to make ends meet, the new program is clearly worth signing up for, says Dave Scharfenberger, director of the Working in Neighborhoods Senior Action Coalition.

"There are definitely some real benefits for lower-income seniors. They'll be able to get medicines with minimal co-payments and many won't have to pay a monthly premium," Scharfenberger said.

And there won't be a "doughnut hole" to try to figure out.

The new program will replace the bewildering array of temporary Medicare drug discount cards that have recently flooded the market. In Ohio, seniors could have chosen from more than 40 such discount cards. Many never bothered.

The new Medicare drug program will still require seniors to choose from several different plans, so it will be crucial for them to pick a plan that actually covers the drugs they need, Scharfenberger said.

"There's still some confusion about how all this is going to work. But in the long run, it's good to replace those discount cards," he said.

The exact number of Part D plans hasn't been set - it depends on how many plan providers enter the market. But it probably won't be 40, Scharfenberger predicts.

Government officials note that receiving a letter does not automatically mean a person will qualify for extra help.

A key factor in getting a letter has been the size of a person's Social Security check.

Many teachers and state employees get very small federal Social Security checks because their retirement pay comes from other government pension systems. Many such people will get notices but won't actually qualify for Medicare's low-income drug benefits.

Also, millions of people nationwide who already get drug benefits through Medicaid and other special programs will automatically qualify for the Medicare subsidies. They do not need to apply for extra help.

Those benefits will be largely replaced by the new Medicare drug program.

That means such people will be asked to pick a Part D plan in November.

If they don't pick one, the government will automatically enroll them in one.

E-mail tbonfield@enquirer.com

Copyright 2005, The Enquirer