California Health Insurance News 
Articles / Medicare Part D is being talked about everywhere in the media
12/30/2005
Medicare Part D is the new prescription drug-coverage plan that takes effect January 1, 2006.
This plan will affect those who have:
· Both Medicare and Medicaid
· Both Medicare and private insurance
· Only Medicare, but currently not taking any prescriptions
Unfortunately, those people that Medicare Part D affects most may be ignoring it because they either believe they are already covered or they are not sure which plan will give them the most benefits.
People who have both Medicare and Medicaid should choose a plan before December 31, 2005. If they do not, they will automatically be enrolled in a plan that will be assigned to them by that date, when Medicare takes over payment of prescription drugs.
"That could cause problems and that is where a trusted Insurance agent or broker really is of most value to his or her clients," said David Thau CEO and founder of Keep It Simple Insurance in the Los Angeles area. "In order to pick the correct plan with so many options is difficult and confusing but knowing the clients details and background allows us to pass on the best advice to the client so that they derive maximum benefit from Medicare Plan D."
Medicare Part D is an optional coverage for those who have Medicare only. However, Medicare-only people need to be aware that if they wait until after May 15, 2006, to sign up for a plan, they will be charged a one percent (1%) penalty fee for each month they fail to sign up, should they choose to enroll later.
For example, a person on Medicare who does not take any prescription drugs decides he or she does not need the plan. Five years later, however, this person has health problems and needs to take prescription drugs, so signs up for a Medicare Part D plan. That person will now pay approximately 60 percent penalty fee every month (12 months, at one percent penalty per month, times five years, equals 60 percent).
Consequently, a plan that might normally have cost about $25 a month will instead cost approximately $40 every month because of the penalties. Participants of Medicare Part D will be given the opportunity at the beginning of each year, however, to revise their plans as necessary without penalty.
