Medicare’s “secret Rx penalty”

Well, it’s that time of year again when the airways are bombarded with Medicare Rx and supplement plan commercials. This year the open enrollment dates are from Oct. 15 to Dec. 31, so you have a while yet to endure those commercials. Thankfully, we’ve already cut the cable cord so we don’t have to listen to them anymore.

But when we did have cable or satellite TV service I never heard about Medicare’s “Secret Rx Penalty” on one of those ads; have you?

Here’s how I found out about it. From 2001-2005 I was going through some very “heavy duty” health issues personally. But with a lot of divine mercy on God’s part and hard rehab work on my part, I was able to pull out of it such that now I’m in great shape. And I continue to work at staying healthy by working hard on the farm and eating almost as healthy as I know how (almost, because I still like desserts!).

By sticking to this regimen, I was able to get by with only two generic Rx’s: one to keep cholesterol in check and one to maintain a healthy prostate. And thanks to competitive generic drug programs, I only had to pay $10/quarter for each of them. Because of this very modest Rx cost, I chose not to enroll in Medicare’s optional prescription drug coverage, which would have cost much more.

But after a couple years, I finally enrolled in a plan that was advertised to cost $58 a month. The reason I chose to enroll was threefold: 1. I wanted the extra coverage the plan offered in the event of catastrophic illness, 2. Someone told me about the “Secret Rx Penalty,” and 3. Was that it covered my gym membership at the time that was currently costing me $50 per month. When I signed up, I asked the agent about the penalty, but he didn’t know much about it — apparently by design.

I say that because of the phone call I got from him after enrolling. Like all good insurance agents, he called to see if all was going well and if I had any other insurance needs. It was right after I had gotten the first credit card statement for the new Medicare coverage. The statement was for $69.80 vs. the advertised price of $58 — a 20 percent penalty! As you might imagine, “we had words”! After he apologized, he went on to say that CMS, the administrative arm for Medicare and Medicaid, is “very secretive” about this penalty and “CMS won’t even allow agents to estimate the penalty.” He complained to me that CMS’s policy doesn’t allow him to provide “full disclosure” to his clients.

That conversation took place several years ago, so I thought I better update myself on this before writing today’s column. So I called my current Medicare Rx insurer, and after waiting a long time in its queue line, I finally got to talk to an agent. After listening to her scripted talking points for longer than I wanted, I think she confirmed the penalty, but just to be sure I asked to be transferred to the enrollment department. The enrollment agent was more forthright but repeated to me several times that it was not her company’s policy to not advertise the penalty; it was Medicare’s policy (fault). And if I wanted to find out more, “You’ll have to talk to Social Security/Medicare about that.”

I personally think this is a flawed policy, especially when you consider that seniors will incur a substantial healthcare penalty for the rest of their lives if they fall into this trap. I’m for full disclosure, especially when it involves lifelong penalties.

If you don’t have some type of Medicare supplement insurance, I recommend you talk to an agent during this open enrollment period. While you’re on the phone with them, ask about the “Secret Rx Penalty.” I bet you’ll get an interesting answer!

Thanks for reading All About Seniors. See you next week!

Bill Milby, CSA, is a Certified Senior Advisor and a Director of Visiting Angels® of Macon, a non-medical, living assistance service for seniors. If you have questions or comments about this column you can reach him at william.mercylink@gmail.com or search for us at https://www.facebook.com/VisitingAngelsofCentralGA/

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