Analysis Paralysis Really Can Make You Sick
We all know that “analysis paralysis” isn’t a real health condition, but in the case of the Medicare drug benefit hesitancy to sign up may very well have real health consequences.
Beneficiaries have until May 15 to sign up for a prescription drug plan, or risk paying a monthly penalty for the rest of their lives when they do sign up for a plan. Yikes. For a lower-income beneficiary who doesn’t have any prescription drug needs, choosing to not to enroll might be tempting (just think of all those monthly premiums saved!). But when that beneficiary needs a drug she or he won’t be able to simply sign up for a plan when the need arises – the beneficiary must wait until the annual open enrollment period, and then pay a stiff “late enrollment” penalty on top of the premium. So will the beneficiary bite the bullet and pay market prices for that drug until open enrollment rolls around again? Is paying that much even possible? And will it be possible for the beneficiary to pay the premium plus the penalty even after enrolling?
The Part D benefit creates a tough situation for those Medicare beneficiaries who currently don’t have any expensive prescription drug needs. Should these people sign up for a plan now in anticipation of future health problems, or sit out the initial enrollment period and pay a penalty when they do need the benefit, perhaps years from now? For example, let’s look at the situation faced by “Janet”, a 57-year-old woman who is on Medicare because of a permanent disability. Janet has slightly too much money to qualify for Medicaid in her state but she still has a very modest lifestyle. Janet doesn’t need any prescription drugs to treat her disability now, but in order for prescription drugs to be available to her at any sort of affordable price in the future (say 5 years from now) Janet will have to pay a premium every month until she does need that drug. And, after paying premiums every month, there is no guarantee that Janet will be enrolled in the plan that actually covers the drug she needs.
Janet could wait to sign up for a plan until she actually needs a prescription drug, but she’ll pay a penalty for her delay. Janet could sign up for a plan now, but she’ll be spending money for something that she doesn’t even need and can’t easily afford. What should Janet and the millions of beneficiaries in similar situations do?
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I don't know what all the "Janets" out there should do. Move to Sweden?
We are screwed. I wonder if when Boomers calculate their retirement needs they're factoring in life without affordable health insurance coverage. Because when the current crowd in Washington finally slinks off the stage, there's going to be nothin' left but the crying. We'll be on our own.
January 25, 2006 10:43 PM | Reply | Permalink
I'm not promoting Humana, it's just the only example I've found of a low, low premium and therefore a way to minimize the cost of keeping one's options open as this continuing debacle unfolds. If I were facing the dilemma you outlined, I'd spend the time required to understand the plan and scour it for pitfalls. I'm sure they're in there.
January 26, 2006 12:11 PM | Reply | Permalink