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Elder Law Center One Essex Street Saugus, Massachusetts 01906 Telephone 781.233.4444 Fax 781.231.2222
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November 9, 2006
MEDICARE DRUG INSURANCE PREMIUMS TO INCREASE 87% A recent report by Families USA revealed that the average monthly premium in 2007 for Medicare prescription drug plans that offer “meaningful” coverage for the so-called “Doughnut hole” will increase from $55.08 to $103.20, an 87% increase. In order to understand what the report says, you need to understand a couple of the terms used. What is “meaningful” coverage and what is the “Doughnut hole”? The “doughnut hole” represents a period of time that your insurance stops paying for your prescriptions. When your prescription cost reach $2,250, you enter the doughnut hole and pay 100% of your prescription costs until you reach $5,100. For 2006, beneficiaries are responsible for paying 100% of prescription costs between $2,250 and $5,100. For 2007, beneficiaries are responsible for paying 100% of prescription costs between $2,400 and $5,451.25. You’ll get a kick out of this! There are plans that offer “doughnut hole” coverage. The only problem is that these plans cover only generic drugs and 18 of the 25 most popular drugs do not have generic equivalents. I was about to start ranting and raving about someone selling an insurance policy to an elder when they know that 18 of the 25 most commonly prescribed drugs will not be covered. I’ll let you draw your own conclusions. If you want coverage, you’re going to have to pay more. This is the 87% increase I was talking about. What you need is a Medicare Part D prescription plan that offers “meaningful coverage”, or coverage for non-generics. Unfortunately, 13 states do not offer prescription drug plans that include “meaningful” coverage and out of the 2,844 plans available for 2007, only 38 plans will offer meaningful coverage. If you are not sure that you have the right prescription plan, you should make an appointment with your local SHINE counselor. These counselors are available at your local senior center and their job is to assist you to find the right prescription plan for your individual needs. This article gives general information and not specific advice on individual matters. Persons wanting individualized advice on matters discussed should contact an advisor experienced in those matters. To the extent this article provides information on legal matters, it is based on law in effect in Massachusetts on the date of posting (laws in effect in other states are often quite different). Ronald H. Surabian is a CPA and attorney who works at the Elder Law Center in Saugus, Massachusetts. He also holds Masters in accounting and a Masters in tax law. He currently serves on the board of directors of the Massachusetts Chapter of the National Academy of Elder Law Attorneys. If you have any questions please call me at the Elder Law Center, One Essex Street, Saugus, MA 01906 (781)233-4444. To view this or any prior article, please visit our web site at www.elderlawcenter.org
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