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October 2005
by James C. Musser, ASBA Washington Representative

This column normally focuses on the latest developments on Capitol Hill, news from the SBA or the direction of the economy. However, this month the focus is on the results of legislation passed and signed into law in 2003 which will soon have a major impact on senior citizens and their families. The new Medicare Part D program, commonly called the Medicare Prescription Drug Law, comes into full effect starting January 1, 2006 and enrollment for the new program begins November 15, 2005. Because so many small business owners are either seniors themselves or have parents or grandparents who look to them for assistance, a few basics about the law need to be emphasized so that everyone who is eligible can enroll and take advantage of the new benefit.

There is a common misconception that the new prescription drug benefit is only available to low income seniors. In fact, the new program is open to all persons who are eligible for Medicare. Although enrollment is voluntary, all seniors are strongly encouraged to enroll during the open enrollment period which runs from November 15, 2005 through May 15, 2006. There are substantial penalties for those who do not enroll when they are eligible but choose to sign up later. If currently eligible seniors do not sign up by the May 15, 2006 deadline, they must wait until the next open enrollment period which starts on November 15, 2006 so there are ample incentives to sign up right away even if the individual does not currently take many prescription drugs.

For most seniors, it is expected that the new Medicare Part D program will lower their prescription drug costs and help to protect them against future increases in prescription prices. The insurance is offered through private insurance companies but all insurance plans must meet the minimum coverage guidelines established by Medicare. There will be a monthly premium and deductible which varies depending on the senior’s income. Those with limited incomes may qualify for extra help and have no premium or deductible.

The Centers for Medicare and Medicaid Services (CMS) has undertaken a massive outreach program to make sure that seniors and those who care about them can make confident decisions about how to sign up for the new prescription drug coverage. CMS has made a number of resources available to help with the decision-making process. By the end of October, every household with a Medicare recipient should have received a copy of the Medicare and You 2006 handbook. This handbook contains useful information about what the new coverage means for the beneficiary based on his or her current coverage. The handbook also provides helpful guidance on choosing a plan. Seniors can also get help signing up by calling CMS at 1-800-MEDICARE (1-800-633-4227) twenty-four hours a day. CMS also has on-line assistance available at “www.medicare.gov”. After choosing a plan, beneficiaries can enroll by mail, via the internet or by calling the toll-free number above.

The passage of the new Medicare Prescription Drug Law was highly controversial at the time it was being debated in Congress. Regardless of the policy preferences of that time, the new benefit is here and we need to help our seniors make the most of the opportunity.

James C. Musser, Esq. is a legislative consultant based in Falls Church, Virginia. His reports are updated monthly.