Should Your Clients Enroll in Medicare’s New Drug Program?
Journal of Financial Planning, Vol. 76 and 77, p. 72-74, January 2006
Posted: 12 Jun 2017
Date Written: January 2006
• From November 15,2005, to May 15, 2006, Medicare recipients can enroll in a voluntary prescription drug benefit program referred to as Medicare Part D. Medicare Part D will initially take effect January 1,2006, or the first day of the month following enrollment.
• Medicare Part D can benefit some individuals who have no prescription drug coverage. But some healthy individuals and individuals participating in pharmaceutical manufacturers' assistance programs or employer retiree health plans may not benefit from Part D.
• Individuals choosing later enrollment will pay a premium penalty expected to be at least one percent for every month of delayed enrollment.
• An enrollee will pay$420 in annual premiums. An enrollee must spend $250 for prescription medication to meet the annual deductible. Thereafter, the enrollee and Medicare will pay varying percentages of coverage depending on prescription drug expenses.
• Low-income enrollees may receive financial assistance. Not all sources of income and assets are considered when determining whether someone is qualified for financial assistance.
• Personal financial planners need to be aware of Medicare's prescription drug benefits and requirements to better serve clients. Financial planners may help individuals to qualify for assistance in the form of lower premiums or co-pays by encouraging clients to change asset allocations.
Keywords: Medicare Part D, Prescrition Drug Benfits, Employer Insurance
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