CHAMPAIGN – With her 65th birthday coming up in December, Janice Wilson of rural Atwood says shes been deluged by mail and phone solicitors selling Medicare supplement insurance plans.
Every time the phone rings, you think, oh no, not another one, she says.
You want to talk marketing blitz?
Hang on, Medicare beneficiaries, for the one thats on the way.
Saturday was the first day companies could begin marketing their various plans for the new Medicare Part D prescription drug coverage, for which enrollment will begin Nov. 15. And with so many competing plans available to Medicare beneficiaries, a storm of advertising is expected in the weeks ahead.
In Illinois alone, Medicare-eligible folks have 29 different plans from which to choose, all with varying monthly premiums, deductibles and co-payments.
One of the plan providers, Urbana-based Health Alliance Medical Plans, has already heard from many of its older members who are confused about whether they should sign up for this optional drug coverage and wondering how theyll ever pick a plan.
One of the conferences I was at, they were calling this a medical tsunami, said Jana Perry, Health Alliances director of Medicare and Individual Services. Many beneficiaries are looking at us and saying, Just tell us what to do.
Perry said Health Alliance plans to hold 70 informational meetings throughout its service area. And more than just the elderly need to get up to speed, she advises. Younger adults with Medicare-eligible parents may need to help their parents sort through the options and enrollment procedures.
Wilson said she and her husband, Tom, havent made up their minds yet about whether theyll enroll in a plan.
On one hand, they dont need much medicine now, with just two prescriptions apiece, she said. On the other hand, who knows what ailments they might have later in life?
Were kind of healthy. Arent we lucky? Wilson remarked. Were trying to decide whether we want to do this down the road.
Medicare Part D is being delivered as part of the Medicare Modernization Act of 2003, and it will begin offering all Medicare-eligible people who enroll in a plan new prescription drug coverage starting Jan. 1.
At the end of this year, the discount drug cards – which the government issued as an interim measure while everyone was gearing up for Medicare Part D to begin – will expire for those who enroll in a new plan. The cards will remain in effect until May 15 for those who dont.
Those stopgap cards offered just a discount on medications, but Medicare Part D will be a true insurance plan with monthly premiums to pay, Perry said.
Premium prices will vary: There will be one plan in each state with a premium of under $20, and eight Medicare Advantage organizations in Illinois are offering drug coverage at no additional charge, according to the Centers for Medicare and Medicaid Services.
But most providers will likely be trying to keep their premiums in the neighborhood of the national benchmark of $32.20 a month, Perry said.
There are other costs associated with the new plans, so Medicare consumers should also pay attention to deductibles and co-payments.
The government is requiring all plans to offer at least as good or better than the Medicare standard, which specifies the following deductible tier:
– Beneficiaries pay the first $250 of their drug costs per year.
– Beneficiaries pay 25 percent of the drug costs between $250 and $2,250.
– Beneficiaries pay 100 percent of their drug costs between $2,251 and $5,100. This is the so-called doughnut hole, where no coverage is provided.
– When the greater of these – $5,100 in total pharmacy costs or $3,600 in total out-of-pocket costs – is reached, coverage picks up again, with beneficiaries paying 5 percent or a $2-$5 co-payment on their prescriptions.
Shop around, advises Fran Soistman, executive vice president of Coventry Health Care Inc., the parent company of Champaign-based PersonalCare.
Coventry is offering some no-deductible plans – though none include benefits in the doughnut hole, Soistman said.
I think youll see some companies that take it further, and find some benefits even in the doughnut hole, he added.
Soistman declined to disclose how much his company is spending to market its Medicare drug plans nationwide, but he did say Coventry is soft-pedaling it and not planning to do a lot of TV and radio advertising.
Coventry has formed marketing partnerships with several Medicare Supplement insurance carriers that already have a track record in the senior insurance market, among them Mutual of Omaha Insurance Company, Conseco Inc. and United Teachers Associates Insurance Company.
This is going to be a one-on-one sale, across-the-kitchen table, Soistman said. We feel this is an important decision for Medicare beneficiaries to make. It requires someone who can answer their questions face to face.
The first decision many will be making, though, is whether to enroll in any plan at all.
Arlene Aschermann, 68, of Arthur, said she currently has four prescriptions – three of which are fairly inexpensive – and her 69-year-old husband, Lawrence, doesnt have any.
They havent made up their minds yet about whether to enroll in a drug plan, she said, but from what she knows so far, I cant see where theyd be any savings in it for me.
But Chuck Facer, 79, of Urbana, said he does see some potential savings for him and his wife, Jane, whose medications can run some $500 to $600 a month without any discounts or coverage.
The couple used the interim discount drug card from the government, he said, and theyre interested in seeing what the new plans have to offer.
Well wait and see the specifics, he added.
Perry warns that the cost of opting out of the new coverage may be high in years to come. Each year, those becoming Medicare-eligible get a shot at enrolling at the best rates. But those who miss the annual enrollment period, which this first time around is being extended through May 15, 2006, will pay a penalty in the form of higher premiums.
The penalty is a cumulative, 1 percent-per-month higher premium cost, meaning somebody who enrolls five years – or 60 months – after they become eligible will pay a 60 percent higher monthly premium, Perry said.
It aggregates forever, and you pay it forever, she added.
Medicare beneficiaries have two basic choices for Medicare Part D plans: those being offered by the companies already offering Medicare Advantage (Medicare managed care) plans, and organizations offering standalone prescription drug plans.
In Illinois, there are 16 companies offering standalone coverage and 13 offering Medicare Advantage plans, including one statewide Preferred Provider Organization (PPO) plan.
The new drug coverage is available to everyone, regardless of ability to pay. A dozen of the companies offering coverage in Illinois will have plans available at no premium to beneficiaries who qualify based on their income, according to the Centers for Medicare and Medicaid Services.
Soistman says the new drug coverage will likely continue to attract its critics, but the goal now is to make it all work for the Medicare population.
I think its a very good start, a long overdue benefit need, he added. I think there are those who will be critical of the benefit design, but we had to start someplace.