You probably know that the deadline for enrolling in the new Medicare drug benefit plan (called Medicare Part D) has passed. So now, million of seniors who labored over the details and choice of a plan can breathe a sigh of relief, right? Well, maybe.

Chicago, USA. July/August, 2006 (via Chicago Caregiver) Enrollment may be over for the nearly 39 million people who now have some type of drug benefit plan under Medicare. But don't get too comfortable because much of what we know today is likely to change in the near future. Seniors and their families need to keep abreast of how those changes might affect them. Now that the dust has settled a bit, let's look back to see what happened as well as ahead to changes that might he forthcoming in the next year.

What happened?

Good participation. In the months leading up to the deadline, critics of Part D ware saying that most eligible Medicare beneficiaries were not signing up. But the latest figures from the Centers for Medicare & Medicaid Services (CMS) show a different outcome. It claims an estimated 38.7 million of the 43 million Americans eligible for Part D now have some type of prescription drug coverage. Two million of these people signed up in the final two weeks. These figures seem to indicate that the current administration's effort to educate and sign up Medicare recipients generally met projected expectations.

Good choices by seniors. Not only did large numbers of beneficiaries enroll, beneficiaries overwhelmingly chose plans that cost less than the average. In July 2005, the expected average monthly premium, based on the best estimates of the CMS actuaries, was $37. Based on the actual choices that seniors have made, the average monthly premium that beneficiaries will pay in 2006 is now about $23, down from even the most recent estimate of $25.

Lower costs. This significant reduction in premiums reflects both strong competition among plans and a response of seniors to these choices, showing they were informed and clearly favored lower-cost plans. By choosing plans that met their needs at a much lower cost than expected, both beneficiaries and taxpayers are saving more than expected. Based on the results of the Part D open enrollment process, Medicare expects to announce another significant downward revision in estimated Part D costs in the coming months.

Those not covered. Despite the good news, this still leaves an estimated 4-5 million beneficiaries without drug coverage, many of whom are people with low incomes. The Social Security Administration has recently launched an initiative to enroll these low-income senior citizens in the Medicare drug program. The focus will he on those age 79 and over.

Jim Firman of the National Council on Aging, who heads a private outreach effort known as the Access to Benefits Coalition, says the problem of low-income seniors without drug coverage continues to get bigger as 60,000 people a month reach the age at which they become eligible for subsidized coverage.

Penalty. To encourage Medicare recipients to enroll in the drug plan before the May 15 deadline, a penalty for late enrollment was introduced. This penalty was a hotly debated issue leading up to the deadline. But it was, in the end, upheld. Anyone who now signs up for the drug benefit plan (with the exception of low-income seniors who are exempt from late penalties), will incur a penalty that amounts to 1% of the premium for each month beyond the initial sign-up period. For a $23 a month premium, that would only add $.23 to the monthly premium cost.

Coverage. Here's how the coverage currently works. In addition to your monthly premium (and possible penalty), you will pay:

• The first $250 of your drug costs each year (deductible);
• 25% of the cost of covered drugs between $251 and $2,250;
• 100% of the cost of covered drugs between $2,251 and $5,100 (sometimes called the "doughnut hole"); and
• 5% of the cost of covered drugs above $5,101 (or a co-payment of $2 for covered generics and $5 for covered brand-name drugs-whichever is greater).

What's Ahead

The drug benefit program-and the plans by private companies contracting with Medicare-likely will change again as early as 2007 and will continue to evolve over the next few years. Most of these changes are still yet to be determined but here are the best projections from officials and advocates.

Premium increases. Though plans are not allowed to increase premiums this year, they can-and probably will-increase in future years. The Centers for Medicare and Medicaid Services is a estimating an average 7% increase in premiums for 2007, although officials say some plans will change very little or not at all next year. Out-of-pocket costs will also increase.

Penalties. If premiums increase, so will the penalties for waiting. If you are subject to a penalty, this increases the premium for life. So, the penalty acts as an ongoing incentive for those who have not yet signed up.

Change in coverage. Plans are allowed to change the drugs that they cover and the co-payments for each drug at any time. If a drug is dropped, the plan has to give patients 60 days' notice or a 60-day supply of the drug. They can also drop coverage of some drugs entirely. But, beneficiaries are only able to change plans for 2007 during the next enrollment period, which doesn't begin until November 15, 2006. A panel of experts is recommending that seniors be allowed to change plans as they see the need. And most insurance leaders seem to be supportive of this recommendation. So this provision may be added in the near future.

Deductibles. The law creating the drug benefit allows consumer costs, such as deductibles, to be increased annually. So in 2007, the standard deductible could go up by $15, to $265. Other co-payments may change as well.

Co-payments. A coalition of 30 healthcare groups, including the National Center for Assisted Living and the American Health Care Association, are supporting a bill, currently in the Senate (S 2409), that would eliminate co-payments for those who live in assisted living facilities, resident care program facilities or other similarly licensed programs. Nursing home residents are already exempt from co-payments.

Filling in the doughnut hole. One of the biggest complaints thus far has been over the so-called "doughnut hole"-the financial level in most plans where seniors receive no drug help between $2,250 and $5,100 in total costs. This coverage is expected to receive more scrutiny as senior concerns become prime campaign issues leading up to national elections in 2008

Health savings accounts. CMS Administrator Mark McClellan believes that beneficiaries might also see health savings accounts introduced next year as an added way to help seniors pay for prescription drug costs.
### Source: Chicago Caregiver