posted on May, 16 2006 @ 08:50 PM
Just finished a stint counseling elders on the Medicare Part D and enrolling them in the plan of their choice (my job ended on May 15!). Certainly
much lacking about this program, especially the constant threat that if seniors didn't sign up NOW (by May 15) they would face a life time
"penalty". Actually, the penalty goes like this: 1% of the average monthly premium (which is about $35 in 2006) times the number of months the
senior missed/failed to sign up for a plan once they became eligible. Enrollment closed May 15 for this year, but opens again at the end of the year
for coverage that takes effect January 07 (which is 7 months from now), thus, the 7% figure used for this year's penalty.
So, for 2006, some seniors who wanted more time to think about this realized that the formula above didn't really "penalize" them that much if they
wanted to wait until the end of the year to sign up. The formula penalty for waiting just 7 more months is: .01 x $35 x 7 = $2.45. A person who
was 2006 eligible but waits until January 2007 to enroll would have $2.45 added on to their MONTHLY premium. If they chose a plan with a $25 monthly
premium, they would then pay $27.45. They would pay this "higher" rate "for the rest of their life". But in this case, they saved $175 in
premiums (or the equivalent of 6 YEARS worth of penalties) in 2006 by not going on the plan this year. For those healthy seniors who do not take
meds, it was a no-brainer to figure out that they really don't hurt much by taking a little more time to study this and sign up at the end of the
[However, assuming the penalty remains part of the program (some debate about this), those healthy seniors that forget about it and wait, say 5 years
(60 months), could see a monthly premium almost double, and this would be significant for those on limited and fixed incomes.]
After working closely with this program, it's quite obvious that it is a boondoggle for big pharm. And many seniors recognized this right away.
With an estimated 90% of those eligible indeed going ahead and signing on this year, big pharm and its insurance industry bed fellows reap the
benefits of premiums, and the 10% that should have but didn't sign up now will pay the penalties in years to come, with the penalties going to the
government, supposedly back into the medicare program.
I was surprised and disgusted at the various ways many news reports and talking heads organized their words to make it sound like it was mandatory
that someone sign up this year. This program was totally voluntary, and in my case, since I was hired to EDUCATE seniors independent of the
government and any insurance plan, I made it clear up front that this was a VOLUNTARY program, then ran the "numbers" specifically for their case to
show what the "penalty" looked like if they waited 7 more months (or more). I felt that was the ONLY honest way to truly EDUCATE the individual
on their choices.