What Medicare's New Prescription Drug Benefit Means

The financial facts and figures...

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For the millions without drug coverage, who pay an average of $3,100 a year in medications, the new Medicare plan may cut their costs by half or more.

Medicare's new prescription drug benefit goes into effect on Jan. 1, 2006. Under the new plan, patients choose a prescription plan and typically pay a monthly premium of about $32 and a yearly deductible of $250. For the next $2000, Medicare will pay 75% and you'll pay 25% (or $500). You pay for the next $2850 in expenses (or in other words, until you've spent $3600 out of pocket), and then Medicare will pay for 95% of costs after that.

Anyone currently covered by Medicare is eligible to enroll beginning Nov. 15, 2005, but make sure you sign up before May 15 , 2006, after which premium rates will go up by 1 percent a month. You can keep your current coverage if you want, but first compare it with the new benefit to see which provides better care and could save you more. To talk to a Medicare representative, call 1-800-MEDICARE, or go to www.medicare.gov to compare drug plans.

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