01:00 AM EDT on Sunday, October 30, 2005

Q: [On the new Medicare prescription drug program], is it necessary that my wife join the same plan that I do?

-- T.G., Portsmouth

A: No. Medicare, the federal health insurance program that covers most people age 65 and older and the disabled, is not a family plan; it applies to each beneficiary individually.

The same is true for the new Medicare prescription drug coverage, said Roseanne Pawelec, spokeswoman for the Boston regional office of the federal Centers for Medicare & Medicaid Services.

"Medicare goes to the individual," and so does the new Medicare prescription drug coverage, she said.

Everyone enrolled in Medicare has the option to sign up for a Medicare prescription drug plan, said Deane Beebe, spokeswoman for the Medicare Rights Center, an independent, nonprofit consumer group based in New York:

www.medicarerights.org

"That's an individual choice, not a couple choice," Beebe said. Each Medicare beneficiary must decide whether to enroll in one of the plans, and which one to pick. (One may best suit you, another may best suit your spouse.)

The prescription drug plans are technically not a Medicare benefit; they are individual insurance plans. Each is different, offering its own type of coverage and carrying its own costs and rules, Beebe said.

It's important to at least consider signing up for one of these plans, because Medicare prescription drug coverage (technically known as Medicare Part D) will typically pay for about half of your drug costs, the government says.

Keep in mind that there's "extra help" available, through what amounts to a subsidy for people with limited income and resources. Nearly one in three Medicare beneficiaries will qualify for extra help, and those who qualify will get help paying for their drug plan's monthly premium, yearly deductible and prescription copayments, the government says in the recently published "Medicare & You" handbook. The amount of extra help depends on your income and resources.

This may be what you had in mind in your question to MoneyLine. If you're married, the government will generally take into account your combined income and resources to help determine whether you qualify for extra help, Beebe said.

If you haven't received an "extra help" application in the mail, but you think you may qualify, call the Social Security Administration toll-free at 1-800-772-1213 or see its Web site:

www.socialsecurity.gov

Q: I have I Bonds that are over five years old. Can I take out just the interest on them, or do I have to redeem the whole bond?

-- E.P., Cumberland

A: You must cash in the entire bond. The Series I bond, one of several types of U.S. Savings Bonds, doesn't pay out interest. Instead, interest accumulates over time.

It's only when you cash in the bond that you receive what you originally invested, plus all the interest that's accumulated. (The interest is subject to federal income tax, but is free from state and local income tax.)

There is a five-year rule. It generally works like this: If you cash in a bond before you've held it five years, you'll forfeit three months' interest. The penalty is generally intended to discourage short-term "traders" and encourage long-term saving.

Neil Downing is a Journal staff writer and author of The New IRAs and How to Make Them Work for You. Questions about your money matters? Call us at 1-401-277-7484 and leave a message, or e-mail:

moneyline [at] projo.com

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