Fleming & Curti, P.L.C. - New Medicare Drug Act Increases Payments by Beneficiaries

NOVEMBER 22, 2004 VOLUME 12, NUMBER 21

New Medicare Drug Act Increases Payments by Beneficiaries
The following is excerpted from the lead story in the November, 2004 edition of Never Too Late, published by the Pima Council on Aging (PCOA). This article was written by Stew Grabel, Pima County’s Ombudsman for Aging, who has educated many thousands in Arizona on a wide variety of community and national aging issues through his seminars and writings.

The Friday before Labor Day 2004, the largest increase in Medicare insurance premiums in 15 years was announced. Most enrollees will pay a Part B premium of $78.20 per month beginning in January 2005, up from $66.60 in 2004. This represents a 17.5% increase in premiums. In addition, the Part A deductible will increase from $876.00 to $912.00 as will several Medicare co-insurance payments.

Hidden in the Bush administration supported 700+ page Medicare Prescription Drug Improvement and Modernization Act of 2003 were provisions mandating these increased out-of-pocket payments for elderly beneficiaries and those with disabilities. The Act also increased payments to physicians, HMOs (and other managed cost plans now called "Medicare Advantage Plans"), hospitals, pharmaceutical companies and drug distribution companies.

Although the Act provides some coverage for prescription drugs, it prohibits the government from using its buying power to negotiate drug prices with the manufacturers or from importing less expensive drugs from Canada or Mexico. Robert M. Hayes, president of the Medicare Rights Center, said the increase in out-of-pocket costs will be especially painful to those on fixed incomes because Social Security payments are expected to rise only 3%. "Older Americans already are staggering from the relentless increases in the cost of prescription drugs," he said. "More older Americans will face harsh choices in meeting basic human needs - health, food and housing."

When the Medicare Act’s prescription drug plan is implemented in 2006, enrollees in the drug coverage plan will be paying an additional $35 per month in premiums. By then, the typical retiree will be paying more than $115 per month in Medicare premiums in addition to the cost of any Medigap/private supplemental insurance premiums.

There is some good news: low income enrollees who are not on AHCCS (Arizona's Medicaid program), TRICARE for Life, private group or employer group plan with prescription drug coverage or an FEHBP (Federal Employees Health Benefit Plan), may be able to apply for a $600 credit on their Medicare Rx card for 2004 if they apply before 12/31/2004 and another $600 credit for 2005. For more information, please call PCOA at (520)790-7262.

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