Tax Article - Medicare Prescription Drug Program Changes

As you know, starting January 1, 2006, the new Medicare prescription drug plan went into effect. People with Medicare can enroll in one of the Medicare prescription drug plans through May 15, 2006. If you have existing prescription drug coverage, you can choose to join a Medicare prescription drug plan at a later date, enrollment dates will occur between November 15 and December 31 of each calendar year.

If you cancel coverage with your existing provider and enroll in a Medicare prescription drug plan, you may not be able to get this coverage back later. We advise you to take the time compare your current coverage, especially which drugs are covered, with the Medicare prescription drug coverage.

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If you cancel or lose coverage with your current provider and you don't enroll in the Medicare prescription drug coverage after your coverage ends, you may end up paying more to enroll in the Medicare prescription drug coverage. If after May 1, 2006, you go 63 days or longer without prescription drug coverage, your monthly premium will go up by 1% per month for every month after May 15, 2006 that you do not have coverage. For example, if you go without coverage for ten months, your premium will be 10% higher than if you enrolled on time and you will have to pay this higher premium as long as you have Medicare coverage.

For more information visit www.medicare.gov 

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