It is important that employees who are eligible for benefits under the new law take a step-by-step approach to considering their existing coverage, future needs, and available options. This will eliminate anxiety and bring some clarity to a potentially confusing situation.

AVAILABILITY
If you are eligible for Medicare, you are eligible to enroll in Medicare Part D. With that said, enrollment is not mandatory and in some cases may not be the best choice. For example, if your employer or former employer offers a prescription drug program that meets or exceeds the government's standards, called creditable coverage, you may consider passing on Part D for the time being. You will still have the option of enrolling in Medicare Part D later without the late enrollment fees.

Although Medicare Part D is funded by the federal government, it will be administered by private insurance companies through government-approved Prescription Drug Plans or PDP's. Within this new benefit, two types of plans will be offered: one that covers prescription drugs only and one that covers doctor's visits, hospital stays, and prescriptions. The latter called Medicare Advantage Plans, are not available in every part of the country. If you currently have a Medicare Supplement policy that includes prescription drug coverage, you must change it to exclude prescription drug coverage in order to be eligible for Medicare Part D.

ENROLLMENT
Companies will begin to provide the details of their Part D plans beginning as early as October 1, 2005, and you may enroll beginning on November 15, 2005. The enrollment deadline is May 15, 2006. This deadline is important because if you wait until after this date to enroll, your premium will be increased by one (1%) percent per month for every month you delay. The increased premium is permanent, which means you will pay the higher rate as long as you are enrolled in the Part D plan.

If you choose to enroll by December 31, 2005, your Part D plan will become effective January 1, 2006. You will be able to change plans during the annual open enrollment period of November 15 through December 31 or at other times during the year under special circumstances, such as moving outside your plan's area of coverage.

The Medicare Prescription Drug Modernization Act will provide a safety net against the catastrophic prescription drug costs that have wreaked havoc with the finances of so many retired Americans. The enrollment deadline is drawing near, but you still have time to compare your existing coverage with what Medicare Part D has to offer and to shop for the best plans available. If your employer intends to offer creditable coverage next year, the May deadline doesn't apply, and you may want to delay considering Medicare Part D coverage, which you may do so with no penalty. However, if creditable coverage is not available, you would be wise to consider enrolling in a Part D Plan before May 15 to lock in at the lowest premiums.