The ABCs of Medicare Part D

Despite calls for an extension from members of Congress and interest groups, both Mr. Bush and Michael Leavitt, secretary of Health and Human Services, have said that the deadline is firm - with one exception: low-income Americans eligible for Part D (about $15,000 yearly income for singles, $20,000 for couples), who get an indefinite reprieve. The administration estimates that about half of the 5.7 million eligible Americans who haven't signed up for Part D are in this low-income group.

The Congressional Budget Office has calculated that extending the deadline to the end of the year would cost an additional $100 million.

The cost of the plan rises 1 percent per month for those who are eligible, and it rises at that rate for as long as they wait. The next time eligibles will be allowed to join a plan is seven months away (Jan. 1, 2007), so they'll have to pay at least 7 percent more.

The administration says the average person who signs up will pay about $25 per month in premiums. That's about $12 lower than earlier estimates. But the figure varies according to the plan selected: Some have premiums below $10 per month.

When the plan was being debated and voted on in Congress in late 2003, the cost was estimated to be about $395 billion over the next decade. But a more recent estimate of $724 billion nearly doubles that, troubling many fiscal conservatives.

After the enrollee pays a $250 deductible, Part D pays three-quarters of the cost of covered medicines up to $2,250. Between $2,250 and $5,100, it pays nothing, the so-called doughnut hole in the plan. Above $5,100, Part D kicks in again, paying 95 percent of the cost.

Some seniors have thought that the $2,250 figure included only their contribution, but both payments made by either the enrollee or their plan count, so enrollees may reach the $2,250 figure faster than they expected. At least one study suggests that many enrollees may hit the doughnut hole next fall, just in time to be angered at politicians running for reelection.

Are seniors satisfied with the program?

65 percent of seniors enrolled in Part D were happy with it, a Washington Post/ABC News poll found in April.

More than 80 percent reported no problems in filling prescriptions under the new plan, according to a Kaiser Family Foundation poll in early April.

42 percent of respondents in a CBS/New York Times poll this month said their prescription-drug expenses have gone down, while 19 percent say they have gone up. The CBS/Times poll also found that three-quarters of respondents said the drug program was difficult or somewhat difficult to understand.

Page: 1 | 2