The big news for seniors is Medicare. The Medicare Prescription Drug Improvement and Modernization Act of 2003, signed into law by the President on December 8, 2003, includes significant changes to the Medicare program. Included in the Act is the new Medicare Part D coverage for prescription drugs. this new program, which will begin in 2006, has several guidelines: 1. $35 per month premium. this premium is in addition to the monthly Medicare Part B premium of $66.60. 2. $250 annual deductible in 2006 3. In 2006, 25% co-insurance up to $2250 per year in out-of-pocket expenses ($2250 figure is indexed for future years). 4. No coverage for expenses from $2251 thru $5100 in out-of-pocket expenses. This gap in coverage has been referred to as the "donut hole." 5. In 2006, "catastrophic coverage" from $5100 with 5% co-payment. 6. Individuals "dually eligible" for Medicare and full Medicaid benefits with incomes below 100% of poverty pay no premium and no deductible and have no gap in coverage. They pay $1 co-payment for generic drugs and $3 co-payment for brand-name drugs. There is no co-payment after they spend $3600 out-of-pocket. 7. "Dually eligible" individuals with incomes below 135% of poverty pay no premium and no deductible and have no gap in coverage. They pay $2 co-payment for generic drugs and $5 co-payment for brand-name drugs. There is no co-payment after they spend $3600 out-of-pocket. 8. Individuals with incomes below 135% of poverty who are not elgible for Medicaid must satisfy an asset test of $6,000/individual or $9,000/couple. They pay no premium and no deductible and have no gap in coverage. They pay $2 co-payment for brand-name drugs. There is no co-payment after they spend $3600 out-of-pocket. 9. Individuals with incomes below 150% of poverty who are not eligible under other low-income categories must satisfy an asset test of $10,000/individual or $20,000/couple. They pay a premium of $0-$420 and a $50 deductible. There is no gap in coverage. They pay $2 co-payment for generic drugs and $5 co-payment for brand-name drugs. There is no co-payment after they spend $3600 out-of-pocket. As stated above, this program does not begin until 2006. Until then, Medicare beneficiaries will be offered a discount prescription drug card starting in 2004. At a cost of $30, the card will entitle participants to a discount of 15% to 25% on the cost of drugs. There is a required co-payment of 5%-10% on each prescription. This preliminary program will end in 2006 when the full Medicare Part D program begins. After years of talk and negotiation, the Medicare program finally includes a prescription drug benefit. however, the new law is not perfect. Numerious gaps remain, and it appears that this program may not be appropriate for everyone. Since the program does not begin until 2006, there is time for seniors to consider how the new Medicare Part D will impacat their own situation and whether or not to participate.