MEDICARE

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Medicare Deductibles Increasing Effective January 1, 2006

Medicare's Impact

Outline of Medicare Supplement Coverage

     Senior Benefits offers a wide variety of Medicare supplement policies through major rated carriers such as, Blue Cross/Blue Shield, United Teacher Assoc., Lincoln Heritage, Mutual of Omaha, and others.

Medicare Deductibles Increasing

Effective January 1, 2006

Medicare's Impact

Seniors will see drug costs keep rising ...

Washington - Seniors will face annual increases in premiums and deductibles - and a growing gap in coverage - for the prescription drugs they buy under the new Medicare law, budget analysts say.

For example, the $250 annual deductible at the start of the program in 2006 is projected to rise to $445 by 2013.

The legislation that won final congressional approval Tuesday would allow seniors to buy coverage - at an estimated monthly premium of $34 - for their prescription drugs beginning in three years.  After they agreed to the monthly premiums and paid their first $250 in pharmacy bills, the coverage would kick in, paying 75 percent of their bills between $250 and $2,250.

After that, there would be no further coverage until beneficiaries' drug bills for the year reached $5,100, leaving a gap of $2,850 that they would have to pay out of their own pickets.  Above $5,100 the insurance would pick up roughly 95 percent of costs.

Those are numbers supporters of the bill have used, with little mention that they would change in future years.

But after just one year, the Congressional Budget Office projects that seniors would see their $250 deductible and the $2,850 gap for which there is no coverage both jump 10 percent.

By 2013, the eighth year of the program, the deductible and the coverage gap are both projected to grow by 78 percent.

In other words, seniors would pay a $445 deductible and those with the largest dug bills would be entirely responsible for ore than $5,000 in drug costs.

"I think these numbers will come as a shock to consumers and they are pretty optimistic projections based on what drug costs are going to do," said Gail Shearer, a health-policy analyst at Consumers Union and an opponent of the legislation.  She noted the focus has been on 2006, the year the prescription drug benefit begins.

At the same time, CBO said, Medicare's contribution also would rise each year so that the program would pay $1,500 of the first $2,250 in drug costs in 2006 and $2,666 of the first $4,000 in 2013.

The numbers were contained in a CBO analysis provided to Sen. Don Nickles, R-Okla., the Senate Budget Committee chairman, and are posted on the CBO Web site.

Medicare Supplement insurance can be sold in only ten standard plans plus two high deductible plans.  This chart shows the benefits included in each plan.  Every company must make available Plan "A."  Some plans may not be available in your state.

BASIC BENEFITS:  Included in all plans.

Hospitalization:  Part A Copayment plus coverage for 365 additional days after Medicare benefits end.

Medical Expenses:  Part B Copayment (generally 20% of Medicare-approved expenses), or, in the case of Hospital outpatient department services under a prospective payments system, the applicable copayment.

Blood:  First three pints of blood each year.