Last week, we began an explanation to help simplify the “Medicare Part D Process” for our readers. This week, the second installment of our effort to demystify Medicare’s new prescription drug benefit plan:

Those of you who are Medicare beneficiaries and have prescription coverage through your former employer, union, or another organization should have received written communications by now telling you whether your current plan will continue and, if so, how it compares to plans available under Medicare Part D.

As a Medicare beneficiary, you are entitled to choose one of the Medicare D-approved plans available in your area. In reviewing your choices, you may want to consider a Medicare Advantage plan that -- unlike Part D which offers only prescription coverage -- combines all health benefits into a single policy. Be aware, though, that Medicare Advantage plans might not be available everywhere and might not include your preferred physician or medical facility.

Because there could be a dozen or more Medicare-approved prescription plans available in your locale, it is important to understand what you will receive for your premium dollar. Much like purchasing homeowners, automobile, and long-term care insurance, you can choose an approved plan that meets your needs and your pocketbook.

Medicare Part D is an outpatient prescription drug benefit that requires you to pay a premium each month, along with a deductible and co-insurance. Part D also has a coverage gap that you must fund yourself. Your premium will vary depending on the plan you choose. Like your other insurance, you will have the opportunity to choose your deductibles and co-pays that, in turn, will be reflected in the amount of your premium. The more you want covered, the higher your premium will be.

If you purchase a “standard plan”, in addition to paying your premium you will pay the first $250 for your prescriptions (this is your deductible) before your plan will begin to pay for medications. After spending that first $250, your plan will pay 75 per cent of your prescription costs until your total prescription expenditures reach $2,250. Then you will be totally responsible for payment of the next $2,850 in prescription costs – called the “doughnut hole” because you get no help here. But when your total drug costs reach $5,100 for that year, your plan will pay 95 per cent of the prescription costs covered by your plan.

Remember, however, that the vast majority of plans will not be “standard” since the providers have developed a co-pay structure like other prescription drug coverage. For example, some available plans don’t have an initial deductible, while others may fill the doughnut hole in some fashion. You should be able to find plans with low premiums and others with high premiums, depending on which you choose. Again, the more you want covered, the higher your premium will be.

Even though the covered prescriptions will vary from plan to plan, some types of medication will be available with all plans. But plans will not cover such items as barbiturates, non-prescription drugs, medication for weight regulation or hair loss, and the like. Nor will any plan cover medications provided through Parts A and B of Medicare.

Each plan has the right to change its listed drugs upon giving 60 days notice. Should you find that you require a prescription that is not on your plan, you have the right to an appeal all the way into the federal court system. An expedited appeal is also available for emergency situations.

Remember: The key dates are November 15, 2005, when enrollment begins, and May 15, 2006, when the initial enrollment period ends. If you purchase a plan after May 15, 2006, you will pay a higher premium. And if you meet the low- income guidelines, there is assistance available to help you pay premiums, co-insurance, and deductibles.

If you missed last week’s column, you can see it, at no cost, by visiting www.nextsteps.net. Here you will also find a link to Medicare’s 2006 Publication online -- click here