December 22, 2005

Q:  I am a veteran and pay only $7 for a 30-day supply of any drug available from the Veterans Administration (VA). I think that’s pretty good. Do I have to give up my VA coverage to sign up for the Medicare drug benefit? -- Charles

Dear Charles,

The VA does offer good drug coverage, doesn’t it? The good news for you is that you do not have to give up this drug coverage for the Medicare drug benefit in 2006. According to the VA, people with drug coverage typically have minimal out-of-pocket drug costs. The VA does not charge a premium for drug coverage, and veterans will pay only $8 for each prescription in 2006. When out-of-pocket drug spending reaches $960 in 2006, the VA will pay all costs above that amount for most veterans. Those with relatively low incomes may not have to pay copayments at all.

In January, Medicare-approved private plans will begin offering the new Medicare drug benefit. The standard Medicare drug benefit is typically less generous than VA coverage. Most of the Medicare prescription drug plans have a monthly premium, and many plans impose a deductible before coverage begins. Most Medicare drug plans also have a coverage gap, which requires enrollees to pay 100% of drug costs until they qualify for the catastrophic coverage benefit.

The Medicare drug benefit includes substantial help for people with limited incomes and modest assets. People on Medicare qualifying for additional help are not required to pay the full premium or deductible and pay only a nominal copay to fill a prescription. Before making a final decision, you may want to see if you qualify for this additional help under Medicare.  

If you decide to stick with your VA coverage but switch to a Medicare drug plan in the future, you will not be responsible for paying the late enrollment penalty because VA coverage is considered “creditable.” This means that it is at least as generous as the Medicare drug benefit. 

This column was prepared by the Kaiser Family Foundation, an independent, non-profit private foundation based in Menlo Park, Calif., that is not affiliated with the Kaiser Permanente health plan. Do you have questions about the new Medicare drug benefit? Send your questions to Medicare Q and A. The Kaiser Family Foundation. 1330 G St., NW. Washington, DC  20005 or MedicareQ@kff.org. 

(c) 2005, Knight Ridder/Tribune News Service.

Distributed by Knight Ridder/Tribune Information Services.