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IMPORTANT INFORMATION FOR SENIOR CITIZENS

Maranatha Community Development CorporationMaranatha Community

Development Corporation

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Module 1: Overview

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Medicare Prescription Drug Coverage Begins January 1, 2006 Available for all people with Medicare

Part A, Part B, or both

For minimum standard coverage in 2006, enrollees would pay

Monthly premium of about $32 First $250 per year for prescriptions (“deductible”) Part of the cost of prescriptions after $250 5% of the drug costs (or small copayment) after paying $3,600 out-of-pocket

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Savings in 2006

On average, for a person with Medicare and no drug coverage nowTotal drug spending will go down by about 50%Over $1,100 per year saved

People with other drug coverage that, on average, is at least as good as the minimum standard Medicare prescription drug coverage also may save money

These estimates do not include the extra help for people with limited incomes and resources

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Protections for People with Medicare

Customer service Pharmacy access Medication therapy management Generic drug information Privacy Uniform benefits and premiums Formulary Protections

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Module 2: Extra Help for People with Limited Incomes

and Resources

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Extra Help With Drug Costs

Available for many people with limited income and resources

Those below Federal poverty level save over 95% on average

People with lowest income and resourcesPay no premiums or deductiblesHave small or no copayments

Those with slightly higher income and resourcesHave a reduced deductiblePay a little more out-of-pocket

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Eligibility for Extra Help

IncomeBelow 150% Federal poverty level

• $1,197 per month for an individual* or• $1,604 per month for a married couple*• Based on family size

ResourcesUp to $11,500 (individual) Up to $23,000 (married couple living together)

• Includes $1,500/person funeral or burial expenses• Counts savings and stocks• Does not count home the person lives in

2005 amounts

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Automatic Eligibility for Extra Help

Some people may automatically qualify

People with Medicare whoGet full Medicaid benefitsGet Supplemental Security Income (SSI)Get help from Medicaid paying their

Medicare premiums

All others must apply

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How to Apply For Extra Help

Social Security Administration (SSA) is mailing applications to those who may be eligibleThroughout the summer of 2005

Those who think they may qualify shouldComplete this application

• Mail it to the address on the back of the application• Use the enclosed postage-paid envelope• Use original forms only (do not photocopy)

People who are not sure should still applywww.socialsecurity.gov can help people

decide

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Module 3: Types of Plans/Coverage

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Ways to Get Coverage

Medicare prescription drug coverage is provided throughMedicare Prescription Drug PlansMedicare Advantage and other

Medicare Health Plans

Coverage is NOT automatic People need to understand their

options

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Joining a Plan

Join directly with the plan sponsor Can get help joining

Legal representativeSpouse, other relative, friend, or advocate

Initial Enrollment PeriodFor people entitled to Medicare before February 2006

November 15, 2005 through

May 15, 2006

For people entitled to Medicare on February 1, 2006, or later

7-month period

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Late Enrollment

Most people will have to pay a penalty if they wait to joinPremium will go up 1% per month for every

month the person was eligible but did not joinThe person will have to pay this penalty as

long as they have a Medicare Prescription Drug Plan

Unless they have other prescription drug coverage that is, on average, at least as good as the minimum standard Medicare prescription drug coverage

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Coverage on Average at Least as Good as the Minimum Standard Medicare Drug Coverage People with other coverage

Will receive information from the other planWill not pay a penalty if they wait to join

• If coverage is, on average, at least as good as Medicare prescription drug coverage

Possible examplesSome Employer Group Health Plans (EGHP)State Pharmacy Assistance Program (SPAP)Veteran Affairs (VA) coverageMilitary retiree coverage including TRICARE

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What if a patient has prescription drug coverage from…

A Medigap (Medicare Supplement Insurance) policy?

An employer or union?

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Original MedicareAnd Medigap With Drug Coverage

People who have a Medigap prescription drug policy will receive important information in the mail this fall from their Medigap insurance company on how the new Medicare prescription drug coverage will affect their Medigap prescription drug coverage

Choices to makeKeep prescription coverage through the Medigap

policyJoin a Medicare Prescription Drug Plan after they

• Modify the Medigap policy to remove drug coverage, or• Change to a Medigap policy with no drug coverage

Drop Medigap policy and join a Medicare Advantage Plan or other Medicare Health Plan with prescription drug coverage

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Employer/Union Coverage

Medicare is working with employers to help people with Medicare keep their current prescription coverage

Employer/Union optionsOffer coverage in place of Medicare prescription

drug coverage and get a tax-free subsidyOffer or contract with a Medicare drug plan to

provide prescription drug coverageProvide coverage that supplements the

Medicare prescription drug coveragePay all or part of Medicare drug plan premiums

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Employer/Union Coverage

People with Medicare and employer/union coverage will get important information in the mail this fall from their plan sponsor

They should contact their benefits administrator before making any changes

Choices to makeKeep coverage offered by employer/unionJoin a Medicare Prescription Drug PlanJoin a Medicare Advantage Plan or other Medicare

Health Plan with prescription drug coverageNOTE: If a Medicare beneficiary drops or loses their employer/union coverage, they may not be able to get it back

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Medicare and Medicaid

These people automatically qualify for the extra help

They should watch the mail this fallLetter about choosing a Medicare Prescription Drug Plan“Medicare & You 2006” handbook

Choices to makeCompare prescription drug plan options and join in a planIf not, Medicare will enroll them in one by December 31,

2005Starting January 1, 2006, Medicare will pay for their

prescription drugsCan switch to another plan at any time

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Other State/Federal Assistance Programs

These people automatically qualify for the extra help if theyGet help from Medicaid paying their Medicare premiumsGet Medicare and Supplemental Security Income (SSI)

benefits

They should watch the mail for “Medicare & You 2006” handbook

Choices to makeCompare prescription drug plan optionsFind a plan that meets their needsIf no choice made by May 15, 2006, will be enrolled on June

1, 2006• Also applies to people who applied and qualify for extra help

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Module 4: Specific Drug Coverage

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Medicare Prescription Drug Coverage Covers drugs available only by prescription

Prescription drugs, biologicals, insulin

Medical supplies associated with injection of insulin

A prescription drug plan (PDP) or Medicare Advantage prescription drug (MA-PD) plan may not cover all drugs

Brand name and generic drugs will be in each formulary

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Medicare Prescription Drug Coverage Plans Must Cover

Cancer medications HIV/AIDS treatments Antidepressants Antipsychotic medications Anticonvulsive treatments for

epilepsy and other conditions Immunosuppressants

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Excluded Drugs

Drugs forAnorexia, weight loss, or weight gainFertilityCosmetic purposes or hair growthSymptomatic relief of cough and colds

Prescription vitamins and mineral productsExcept prenatal vitamins and fluoride preparations

Non-prescription drugs Barbiturates Benzodiazepines

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Prescription drug plans (PDP) and Medicare Advantage prescription drug (MA-PD) plans may have a formulary

CMS will ensure formularies do not discourage enrollment among certain

groups of people Formulary review requirements are posted

at www.cms.hhs.gov/pdps on the web CMS will approve formularies in advance for

plans to complete their bid

Formulary

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Tier 1 is lowest cost sharing Subsequent tiers have higher cost

sharing in ascending order CMS will review to identify drug

categories that may discourage enrollment of certain people with Medicare by placing drugs in non-preferred tiers

Plan must have exceptions procedures for tiered formularies

Tiered Formularies – Preferred Drug Levels

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How Drug Plans Vary

What prescription drugs are covered How much the individual needs to pay Which pharmacies are used Whether they offer more than the

standard level of coverageFor a higher monthly premium

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Module 5: Individual Choice of a

Prescription Drug Plan (PDP)

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Annual Coordinated Election Period

November 15 – December 31 every year Person who does not have a Medicare

drug plan can join Person who currently has a Medicare

drug plan can switch Change effective January 1

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Things to Consider

What is current health insurance coverage?Medicare and employer/union, including military retiree

coverage (like TRICARE)Original Medicare PlanMedicare Advantage and other Medicare Health Plans

• Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Special Needs, Private Fee-For-Service Plan (PFFS)

• Medicare Cost PlansMedicare and Medicaid

Is there currently prescription drug coverage? Even those with current prescription drug coverage

should ask“Is Medicare prescription drug coverage right for me?”

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Medicaid prescription drug coverage for people with Medicare and Medicaid ends December 31, 2005

People with Medicare and Medicaid who do not join a plan by December 31, 2005CMS will enroll them in a prescription drug plan

with a premium covered by the extra helpTheir Medicare prescription drug coverage will

begin January 1, 2006 People with Medicare and Medicaid have a

Special Enrollment Period (SEP)Can change plans any time

Auto-Enrollment (can change plans any time)

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Special Populations

State Pharmacy Assistance Program participants

People in long-term care facilities Residents of the U.S. territories

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State Pharmacy Assistance Programs (SPAP)

Provide wraparound coverage Provide same or better coverage

and save money Reduce state costs or expand

population served Costs incurred by SPAP may or may

not be counted toward out-of-pocket limit

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Long-Term Care Facilities

ResidentsObtain drug benefits from pharmacy chosen

by the facilityCan change plans at any time if they have

both Medicare and full Medicaid benefitsWill have convenient access

Those persons who are dually eligible for Medicare and Medicaid have no deductibles and no copayments.

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U.S. Territories

Each territory has its own prescription drug plan region

Each territory can develop its own extra helpHelp with premiums, coinsurance,

copayments, deductibles or Provide supplemental coverage

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For More Information

See “Medicare & You 2006” handbookTo be mailed October 2005Read about prescription drug plans in the area

For help in choosing a planVisit www.medicare.gov on the web

• To get personalized informationVisit www.shiptalk.org or call the local State Health

Insurance Assistance Program (SHIP)• For assistance with enrollment

Call 1-800-MEDICARE (1-800-633-4227)• TTY users call 1-877-486-2048

Attend local community events

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Important Dates

January 1, 2006Medicare Prescription Drug Plan coverage

begins for those enrolled

May 15, 2006Last day of Initial Enrollment Period

June 1, 2006Facilitated enrollment of people entitled to

extra help who did not enroll by May 15, 2006

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More Information for People with Medicare Websites

www.medicare.govwww.cms.hhs.govwww.socialsecurity.gov

Publications“Medicare & You 2006” handbook“Facts About Medicare Prescription Drug Plans”

1-800-MEDICARE (1-800-633-4227) TTY users should call 1-877-486-2048 Social Security Administration

1-800-772-1213TTY users should call 1-800-325-0778

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Questions And AnswersQuestions And Answers

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