I’ve been reading about the new prescription drug benefits and want to find out how this works with m current medigap policy. Last year my medicine cost nearly $4, 000. I have a Medigap policy now, which helps cover medication but it also covers other medical expenses too. Can I keep my current Medigap policy or will I need it when the Medicare drug benefit kicks in 2006?

Anxious Andy

Dear Anxious, Yes, you can keep your current Medigap drug benefit policy, but you can’t have the Medicare (Part D) drug benefit too! After 2006, new beneficiaries won’t even be allowed to get a Medigap policy that includes drug options, but seniors like you, who already have a policy will be allowed to keep it, but there are some consequences. You’ll have to decide which plan is most cost effective for you. Savvy Note: You can keep an ordinary Medigap plan, without drug benefits, but it can’t be used to fill in the gaps in Medicare drug coverage.

Medigap vs Medicare

Three of the 10 Medigap policies - H, I and J - offer prescription drug benefits, and the cost and benefits of each will vary. I don’t know how good your Medigap drug benefit coverage is, but I do know how good Medicare Part D is, so let’s compare. Figuring your medication cost $4,000 per year, Medicare Part D would pay for $1,080, and you would pay the other $2,920. Take these numbers and compare them to the premium co-pay and coverage of your current Medigap plan to help you make your decision. But, before you decide, there are several other factors to consider including:

Long-Term Plan: The cost of both plans will increase, and your health could improve or deteriorate, requiring more or less medicine. So, you need to look not only at your current costs, but also consider your expenses over the long term to the extent you can. The Congressional Budget Office estimates that premiums and deductibles for Part D will rise approximately 10 percent annually.

Low Income Subsidy: Seniors with income below $14,450 for individuals and $19,500 for couples — or 150 percent of the projected 2006 federal poverty level will experience lower prescription drug costs with the Part D plan because Medicare will provide special assistance.

Medigap and Medicare: If you like your Medigap policy for its other health care coverage, but decide to go with the Medicare prescription drug plan, you will probably be able to keep the Medigap policy, but will have to drop the drug coverage portion.

Late Enrollment Penalty: There will be an open enrollment period for Medicare beneficiaries to join Part D, from Nov. 15, 2005 to May 15, 2006. If you stick with your Medigap plan, but later decide to switch to the Medicare Part D plan, you could be charged late enrollment of I percent for every month in which you could have enrolled but did not. Also, if you drop Medigap in favor of Part D, there’s no going back.

Savvy Resources

• AARP: Offers a Drug Benefit Calculator online to help you figure out exactly how much money you will save or spend with Medicare Part D. Visit http://sites.stockpoint.com/AARP/drugbenefit.asp

• State Health Insurance Counseling Program (SHIP): Offers free health insurance counseling to Medicare beneficiaries. SHIP counselors can help you understand and review your best drug benefit options. To locate your local SHIP call Medicare at 1-800-633-4227 or visit www.medicare.gov/Con-tacts/ Related/Ships.asp

Send your senior questions to Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit www.savvysenior.org.