Drug costs set
to drop in isles

Competition brings low
premiums under Medicare's
pending Plan D program

» Seniors can pick plan after Nov. 15

Hawaii seniors will pay the second-lowest premiums in the country -- an average of $27 a month -- for Medicare prescription drug coverage.

"It's pretty incredible," Jeff Flick, regional administrator for the Centers for Medicare & Medicaid Services, San Francisco, said in an interview. "It surprised a lot of people, including me."

Hawaii seniors, particularly those with low income, are expected to save money through the drug coverage.

California's premiums, averaging $25, will be the lowest in the new Medicare Part D prescription drug program.

That was expected because of intense competition among insurance companies there, Flick said. "But I would not have picked Hawaii to be competitive. ... Competition seems to be pretty darned fierce."

The average premium nationally was estimated at $37 but dropped to $32 because of brisk competition, he said.

It looks as though 12 companies, some new to Hawaii, will offer about 25 different stand-alone prescription drug plans, Flick said. At least three will have premiums under $20 a month, and some might have none, he said.

Some premiums will run higher than $27 to provide better coverage, he said.

Groups such as Kaiser Permanente, the Hawaii Medical Service Association and possibly a newcomer will offer drug coverage as part of Medicare Advantage plans for coordinated care, he said.

The standard benefit will be about 53 cents on a dollar, and for low-income beneficiaries about 95 cents, Flick said.

The Medicare office estimates out-of-pocket costs for prescription medicine will drop to $144 from about $1,330 a year for low-income Hawaii seniors under the new program.

The drug benefits potentially will help about 50,000 of Hawaii's 186,000 Medicare beneficiaries, said Pamela Cunningham, coordinator of Sage PLUS, the free State Health Insurance Assistance Program in the Executive Office on Aging.

"We have a lot of people call us who are spending $1,000 a month on prescription drugs. It's scary," she said.

Either their family is helping them, or they are choosing between medicine and other needs or not taking a whole pill, she said. "That's what we don't want to happen."

Flick, who is here working with SagePlus and other groups to explain and promote the program, said while it seems complicated, "I think some people are going to be pleasantly surprised. People are going to get help through easy processes."

He said the prescription drug program is part of Medicare's attempt to encourage people to think more about prevention and wellness.

"Prescription drugs have had a huge impact on seniors," he said, noting the increase in life expectancy over the years.

"Maybe the only thing more expensive than paying for prescription drugs is not paying for prescription drugs."

Although people with limited income will benefit the most from the Part D program, Flick stressed that "it's for everybody" receiving Medicare benefits.

He recounted a conversation he had with his 87-year-old father, who thought at his age, after three heart attacks, no one would give him drug coverage.

He said he told his hard-to-convince father it does not matter how many heart attacks he has had or how old he is, he is going to have drug coverage.

"Every single person who wants this benefit gets this benefit ... and coverage never runs out."

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Seniors can pick
plan after Nov. 15

For people with a lot of questions about Medicare's Part D prescription drug program, Jeff Flick, Centers for Medicare & Medicaid Services regional administrator in San Francisco, has some answers:

Question: What is the timetable to start the program?

Answer: Medicare is still approving prescription drug plans in a rigorous review process and starting to get contracts out. Most will be final by Sept. 15.

All information about the plans will be fed into computers, and 43 million "You and Medicare" books with specific information about the plans for each area will be produced and sent to all Medicare beneficiaries.

On Oct. 1, companies can begin marketing plans; On Oct. 13, all information will be on the Medicare Web site (www.medicare.gov).

Medicare beneficiaries will have from Nov. 15 to May 15 to choose a plan. They can start getting drug coverage Jan. 1 if they select one before then. If they don't like it, they can switch plans before May 15.

Eligible people who do not enroll by May 15 will pay 1 percent more per month for their premium when they do enroll -- a provision designed to encourage people to sign up for a plan even if they are healthy.

Q: Who benefits the most from the drug benefits?

A: People with Medicare who do not have Medicaid but have limited income ($1,376 per month for an individual and $1,845 for a married couple) will get the biggest benefits, about 95 percent to 98 percent coverage with no premium.

About one out of three people will qualify for the free benefit, Flick said. "They'd be crazy not to get the plan."

People on Medicare who have Medigap drug coverage also will find some of the new plans more cost-effective with guaranteed benefits, Flick said.

Q: Hawaii has many state and federal retirees and others with good medical coverage from former employers or unions. Do they have to apply for a Medicare drug plan?

A: Medicare beneficiaries who have prescription drug benefits as good or better than the new plans do not have to do anything, and they won't be penalized. They should receive letters from the employer or union affirming that their coverage is equal to or better than the Medicare plans.

Q: How can people get help choosing a plan?

A: Information on each plan will be posted on www.medicare.gov. People also can call 800-MEDICARE (633-4227) or Sage PLUS, 586-7299 on Oahu or 888-875-9229 toll-free from the neighbor islands or mainland.

Younger people with computer skills are encouraged to help parents and grandparents with the process.

The only information needed is the enrollee's name, ZIP code, birth date, Medicare number and prescription drugs they are taking.

The computer will work through the math and give the enrollee the costs and best choices for the medicine (brand or generic) they want, their preferred pharmacy or mail order service.

Every plan also must have catastrophic coverage for illness. Once a person has spent $3,006 on drugs, the federal government will pay 95 percent of all costs.

Plans will differ widely in premiums, deductibles, co-payments, supplemental coverage and other features.

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