Delayed Enrollment Penalty: Contrary to some published information, the deadline for first year enrollment is May 15, 2006. Delaying until the next enrollment period - November, 2006 - may incur an ongoing 1% per month (6%) "late fee". At Medicare’s projected "average" premium, this amounts to less than $2.00 per month, which means that an eligible waiting until November, 2006, to enroll would have to remain enrolled for almost 20 years for this threatened "late" penalty to offset just one year’s premium that could be saved by waiting.

Because of Medicare’s prototype monthly premium, deductible and copays, to wait is an easy decision for folks with lower drug costs - especially when those costs are less than $800 or $900 a year. Under its prototype program, Medicare contributes nothing until at least $670 is spent by the beneficiary. After that amount, any "value" of the benefit is slowly and progressively realized. (An enrollee would have to take almost $1800 a year in "covered" drugs - $150 per month - for Medicare’s "contribution" to match that of the enrollee.) But, after paying a little more than $1500 in covered drugs’ costs, Medicare quits paying – for a long time.

This brings up other important issues - Premiums, Rx Pricing, Copays, Covered Drugs, and Preferred Drugs: All of these elements help determine what an enrollee must eventually pay out-of-pocket for any insured drug benefit – including Medicare’s, and unfortunately, any or all of them can be manipulated by the Medicare PBMs to deceive enrollees and entice enrollment.

Monthly Premiums vs. Rx Pricing: For instance, a "lower premium" Medicare plan may compensate with higher priced prescriptions, which then "eat up" Medicare’s funding and accelerate enrollees’ reaching the non-covered "$2850-donut hole" – during which the enrollee must pay the full Rx cost out-of-pocket – maybe at prices higher than those "outside the plan".

Low premiums can also be accompanied by high patient copays. For example, I have seen at least one plan that offers "a 90-day supply of generic drugs for a $25 copay". (In comparison, a review of prices for an existing non-Medicare discount card plan reveals that for its 20 most-often prescribed generics - which comprise the vast majority of generic Rx’s – its average non-Medicare retail cost for a 90-day supply is less than $13, and for its five most-prescribed generics that will be "Medicare-covered", the 90-day cost is less than $6.) No wonder Congress’s Medicare advisory commission warns that "billions will be wasted under the new drug subsidy program unless Congress fixes the windfall (pricing) formulas for managed care companies."

Covered/Non-Covered Drugs: Drugs fall into two categories: (1) – "Excluded drugs" for which Medicare will pay nothing This includes 5 of the top-20 most-prescribed generics referenced above as well as lower-cost over-the-counter versions of some prescription drugs such as Prilosec. (However, pregnant seniors will be pleased to know that their prenatal vitamins will be covered by Medicare.) and (2) the Medicare PBM’s list of "covered" drugs – this so called "formulary" does not have to cover all drugs for all maladies. (Unfortunately – and strangely – while an enrollee is committed to the selected PBM for a year, the Medicare PBM can make formulary and copay changes anytime – with only 60 days’ notice.)

…Second, and more important, since these Medicare PBMs are "at risk", they will watch their bottom line, which may not bode well for patient safety. For example: A few years ago, among the several cholesterol-lowering agents was one called Baycol – the least expensive of the lot. Some benefit plans made Baycol a preferred drug, penalizing patients who used its alternatives. As lower cholesterol levels were recommended, FDA approved higher and higher doses of Baycol – which continued to be financially advantageous to the insurers – until Baycol patients started dying. The same applies to Vioxx, which was less costly than others in its class, but because of deaths and injury, Vioxx was recalled – hounded by more than 5000 lawsuits. There is no doubt that if these drugs were still available, they would be on some Medicare PBMs’ preferred drug lists, and there is no doubt that similar deaths and injuries will occur in the future.

Accessibility: Not all Medicare-approved PBMs offer nationwide pharmacy network access, so enrollees will have to take this into consideration when investigating enrollment.

So - Enroll Now, or Wait? It has been demonstrated how insignificant the potential premium penalty, if any, may be for eligibles who choose to wait to enroll. In fact, most eligibles taking few drugs probably would not live long enough for any such penalties to offset savings achieved by delaying enrollment until they incur higher drug costs. These eligibles would obviously be better served by acquiring an aggressive discount card and paying their entire drug costs.

On the other extreme, financially-sound eligibles who take $6000 or more in "Medicare-covered" drugs in a year should consider enrolling in a Medicare plan, since after that, Medicare will pay about 95% of the cost of covered drugs. However, before reaching that plateau, because of premium costs, copays and the aforementioned donut hole, as one approaches $5000 to $6000 in drug costs, the Medicare benefit really reduces to only slightly more than a 20% benefit, and there is evidence that an aggressive non-Medicare discount card can offer greater overall benefits.

The hard decision is for financially-sound Medicare-eligibles falling between these extremes. Those near the lower end of the drug expense scale would probably be better off not enrolling, those in the upper middle might consider a Medicare plan that includes coverage for the donut hole – but the additional coverage will be offset by higher monthly premiums, etc.

In fact, some who have "run the numbers" say that with the exception of low-income individuals, most Medicare-eligibles accessing a discount card that offers aggressive generic prices and who also choose to directly import their expensive brand name drugs can generally provide for themselves a more economical benefit than the one provided by the Medicare PBMs – and they can make their own "coverage" rules.

In summary, there are a lot of contenders for Medicare-eligible enrollees and Medicare dollars -and some will be deceptive. Another reason for waiting and watching is that it is certain that more changes will come. I’m eligible, and I’m going to wait and see. In any case, with respect to the Medicare PBMs - to fellow seniors I suggest the following– caveat emptor (Buyer Beware)!