01:00 AM EST on Sunday, November 27, 2005

BY FELICE J. FREYER
Journal Medical Writer

Throughout Rhode Island, Medicare beneficiaries are struggling to make sense of the new drug benefit that will be available to them starting Jan. 1.

The program offers taxpayer-financed coverage for prescription drugs, a first for the vast federal health plan that covers 175,000 elderly and disabled Rhode Islanders.

But unlike other aspects of Medicare, the drug benefit is an insurance program. It requires beneficiaries to sign up with private companies that will provide coverage for the drugs. Dozens of such companies are competing; in Rhode Island, there are 18, offering a total of 44 different plans.

So beneficiaries face a complicated choice. Here is a second in a series of question-and-answer columns to help guide that choice:

Q: Can I change my mind after I've signed up for a plan?

A: Until Jan. 1, 2006, you can change your mind as many times as you want. Your last choice on Dec. 31 will be the plan that covers you starting Jan. 1. Between Jan. 1 and May 15, 2006, you may change your mind one time.

These flexible rules are just to ease the program's introduction.

After May 15, 2006, there will be one enrollment period each year, from Nov. 15 to Dec. 31. During that period, you will have one opportunity to choose a new plan, and that will be your only chance to switch.

The exception is people who are eligible for both Medicare and Medicaid. These "dual eligibles" can switch plans at any time, and as many times as they want.

Q: Can the plan I've chosen change over the course of the year?

A: Very little.

Premiums, copays and deductibles cannot change until Dec. 31 of each year.

The drug formulary -- the list of drugs the plan covers -- cannot change between Nov. 15, 2005, and March 1, 2006. After that, the formulary can change, but only if beneficiaries get a 60-day notice.

Drug prices can change, but this matters to beneficiaries chiefly if their copay is a percentage of the drug costs. For most drugs, people will pay a set dollar amount that won't change over the course of the year.

Q: What happens if a drug I need is dropped from the formulary? What happens if, after I've already chosen a plan, my doctor prescribes a drug that is not on that plan's formulary?

A: You can either switch to another drug that treats your condition, or you can ask for a special exception.

All the plans are required to provide at least two drugs to treat every condition on the government's list of common conditions. There will always be a covered drug for your condition.

However, if your doctor feels that you must have a certain drug, and that drug is not on the formulary, you can apply for a special exception. The plans are required to respond to this request within 72 hours.

If the response is negative, you can appeal. During the appeal, the plan is required to provide a transitional supply of the medication in question.

If you ultimately lose, you will have to pay for the drug until the end of the year, when you can switch to a plan that covers it.

Q: I'm already enrolled in BlueCHiP for Medicare. Do I have to do anything?

A: It depends which plan you're in, and what kind of coverage you want. You should have received a notice from Blue Cross & Blue Shield offering you a choice of plans. Check the appropriate box and mail it back.

If you don't do anything, this is what will happen:

If you now have a Blue CHiP Standard plan with generic-drug coverage, you will be enrolled in BlueCHiP Standard with Part D, which in 2006 will carry a $36-a-month premium.

If you have BlueCHiP Standard but have opted out of the drug coverage, you will stay in BlueCHiP Standard, which in 2006 will be a zero-premium plan with no drug coverage.

If you're in BlueCHiP Preferred, you'll be enrolled in the new version of BlueCHiP Preferred, which in 2006 will include drug coverage and carry a $154-a-month premium

If you sign up for a standalone Part D plan, you will be disenrolled from BlueCHiP.

The same rules apply for people now in UnitedHealthcare of New England's Medicare Complete.

If you have drug coverage now, and you don't do anything, you will be enrolled in a plan with drug coverage.

If you don't have drug coverage and you don't make the switch, you will continue to be in Medicare Complete without drug coverage.

If you sign up for a standalone Part D plan, you will be disenrolled from Medicare Complete.

If you're not sure where you stand, call the number on your UnitedHealthcare or BlueCHiP card and ask for help.

Q: I keep hearing that I'll face penalties if I don't enroll in Part D by May 15. How will they penalize me?

You will be penalized only if you sign up for Medicare Part D after May 15. If you never sign up, you won't face a penalty. The penalty is that you will always pay higher premiums for Part D coverage. You will pay an extra 1 percent in premiums for every month you delayed in signing up.

For example, if you wait until 2007 to sign up, you'll have delayed for seven months. That means you'll pay a surcharge on your premiums equal to 7 percent of the average monthly premium for 2007. In 2008, your surcharge will be 7 percent of the 2008 monthly premium. This will continue for the rest of your life -- and it can add up.

You won't be penalized if you are now enrolled in a drug plan, such as one offered by your former employer, that the federal government considers "creditable" -- equal to or better than Part D. If you switch from a creditable plan to Part D, you won't pay a penalty. Your premiums will be the same as everyone else's.

Q: I'm on TRICARE and I'm happy with it. Do I have to change anything?

A: No. You're all set. TRICARE, the military health system, offers "creditable" drug coverage, and you should stick with it.

The same goes for people who get their drugs through the federal Department of Veterans Affairs and the Federal Employee Health Benefits Program. They don't have to do anything.

Q: Will Medicare Part D save money for every beneficiary with prescription drugs?

A: No. There are at least two categories of people in Rhode Island who will end up paying more for their drugs, as a result of Part D.

The first are those who are covered by both Medicare and Medicaid, the health plan for the poor. Medicaid currently covers all prescription drugs, at no cost to the enrollee.

But as of Jan. 1, people who are in both Medicare and Medicaid -- called "dual eligibles" -- will be automatically switched to a Medicare Plan D. And all the Part D plans will require dual eligibles to pay a copay of $1 for generic drugs and $3 for brand-name drugs.

The second group of people who may see added expenses are those who are enrolled in the BlueCHiP for Medicare Standard plan with unlimited generic-drug coverage. This plan now has no premiums and a $7 co-pay on generic drugs. But that will change, come Jan. 1.

The rules require HMO plans like BlueCHiP -- called Medicare Advantage plans -- to offer either full Part D prescription-drug coverage or no drug coverage. The generic-only coverage is no longer allowed.

To keep your drug coverage under BlueCHiP Standard, you will have to move into BlueCHiP Standard with Part D, which costs $36 per month and has a $10 copay on generic drugs (as well higher co-pays for brand-name drugs).

If you stay with the zero-premium BlueCHiP plan, you'll have no drug coverage from BlueCHiP.

UnitedHealthcare of New England offers a zero-premium Medicare Advantage plan that does include drug coverage, with a $3 copay on generics. But some of the plan's other copays are higher than BlueCHiP's.

Q: I've read that, under Part D, the copay on drugs could not exceed 25 percent. But when I look at my copays under BlueCHiP, it looks like they come to more than 25 percent, for at least some drugs. What gives?

A: BlueCHiP is a Medicare Advantage plan -- an HMO -- and the rules are slightly different. Medicare Advantage plans have to offer drug coverage that is "actuarially equivalent" to Part D -- essentially the same coverage, although it may be designed differently.

BlueCHiP has no deductible. Because you don't have the cost of the deductible, the plan is allowed to charge a little more in copays.

Q: In the question-andanswer column two weeks ago, The Journal reported that my Medigap plan would stop offering drug coverage after Jan. 1. That's not what my plan is telling me. Who's right?

A: The Journal was incorrect.

Medigap companies cannot sell new plans with prescription-drug coverage after Jan. 1. If you already have a Medigap plan with drug coverage, that can continue -- if you decide to renew it.

But renewing it might not be a wise decision. Keep in mind that your Medigap drug coverage probably is not "creditable" -- equivalent to Part D. So you'll face penalties if you join Part D after May 15.

Instead, you can drop the drug part of your Medigap plan and enroll in a Part D plan. This will be less expensive for you.

Contact your Medigap plan for details.

Still have questions? The Journal will keep answering them. Please call (401) 277-7400 and leave us a message, or e-mail your questions to medicare@projo.com. We cannot answer every question, nor can we provide personal responses.