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Have you enrolled in your drug plan yet?

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How it works
Once enrolled in a qualified plan, you generally have to pay a separate monthly premium as well as a yearly deductible ($275). After the deductible amount is paid, you will then pay 25 percent of the cost of covered Part D prescription drugs up to a coverage limit of $2,510.

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In basic Part D plans, drug-related expenses above $2,510 and below $5,726.25 must be paid fully by the beneficiary. This is the program's controversial "donut hole" or coverage gap. Thereafter, though, Medicare Part D "catastrophic coverage" kicks in, covering 95 percent of prescription drug costs for the rest of the year. That means you'll pay either the coinsurance amount (5 percent) for your drugs or a small co-payment ranging from $2.25 to $5.60 for each prescription.

What it costs
Costs, of course, vary depending on the policy you select. The premiums for a basic Part D drug plan can cost up to $25 per month, while premiums for more comprehensive policies that pay for some or all of your drugs in the so-called donut hole can run from $50 to $75 per month. Consequently, if you take many drugs, the additional $300 to $900 per year you pay out in premiums for a more robust Part D plan could be worth the extra money because you'd likely come out ahead financially in the long run.

What happens if you don't enroll
If you currently have low drug costs, getting Medicare drug coverage could cost you more now, but it will protect you from high drug costs in the future. Remember, we're talking insurance here. Joining Part D when you are first eligible to do so means that you pay a lower monthly premium than if you delay enrolling in an eligible plan for a year or two.

There's a financial penalty for not joining Part D when you are first eligible: It is 1 percent of the monthly premium for each month you don't enroll, and it is applied to all of your monthly premiums for the rest of your life.

Need extra help?
You may qualify for "extra help" (the low-income subsidy) from Medicare to pay prescription drug costs if, in calendar year 2007, your yearly income level was below $15,315 ($20,535 for a married person living with a spouse and no other dependents) and you have resources of less than $11,710 ($23,410 for a married person living with a spouse and no other dependents). Call Social Security at (800) 772-1213 or go to www.ssa.gov to apply.
You automatically qualify for extra help if you have Medicare and meet one of these conditions:
1. You have full Medicaid benefits.
2. You get help paying your Part B premiums from your state Medicaid program.
3. You belong to a Medicare Savings Program.
4. You get Supplemental Security Income (SSI) benefits without Medicaid.
 
 
Next: Which plan will meet your needs?
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