By now, most of the nation's 43 million Medicare beneficiaries are well versed in the prescription drug benefit, called Part D, that launched last year. Most eligible seniors and disabled persons have chosen their drug plan and health providers, and won't re-evaluate their benefits until open enrollment for Part D begins in November. But for those unhappy with traditional Medicare — where patients pay premiums and a percentage of fees — changing to Medicare Advantage is now an option. Medicare Advantage plans are private health plans that provide physician services, hospital visits and other health benefits to Medicare beneficiaries and are subsidized by the federal government. It's another bite at the apple for insurers," Lipschutz said. These plans are either Medicare HMOs — where members are treated by a certain pool of physicians — or private fee-for-service plans, PFFS, an increasingly popular option where Medicare beneficiaries are not limited to an HMO network.

During the new enrollment period starting Sunday, seniors with Part D drug coverage and traditional Medicare who switch to a private fee-for-service plan will be able to retain their previously selected Part D prescription drug benefit. However, those who switch to a Medicare HMO that doesn't offer drug coverage will lose their Part D drug benefit. If seniors lose their drug coverage, not only will they be unable to get it back until 2008, but they will have to pay penalties each month for dropping it. This unexpected open-enrollment period was signed into law Dec. 20 by President Bush as part of the Tax Relief and Health Care Act of 2006 — one of the last pieces of legislation passed in the waning days of the Republican-controlled Congress.

The law itself is a wide-ranging trade and tax package that extended certain tax breaks, approved offshore drilling on the Gulf Coast and included provisions to improve trade relations with Vietnam. The open-enrollment period is applicable only for this year and 2008, according to the law. Meanwhile, Congress is taking a hard look at the price tag for Medicare Advantage plans. Federal reimbursements for Medicare Advantage are 12 percent more than traditional Medicare, according to the Medicare Payment Advisory Committee. The Congressional Budget Office estimates that the government would be able to save $65 billion over five years by cutting these subsidies. "All these plans are not the same," Rep. Pete Stark, D-Fremont told the Oakland Trinue. Stark chairs the House Ways and Means subcommittee on Health and convened a hearing last week on the topic. "The first thing we need to do is get more information about what benefits are being provided and what are the differences between insurers."