I’m sure you
know by now that the Medicare Prescription drug coverage plan began January 1st,
2006. As you can tell from TV, radio and newspaper advertising, there are many
plans available. It’s up to you to decide whether to join a Medicare drug plan
and to choose the plan that is right for you.
The good
news for people with diabetes like you is that your current coverage for
diabetes testing supplies remains the same. This means you can continue
receiving your supplies from Diabetes Management & Supplies with no interruption
of service. These items are covered under Medicare Part B. Your Part B coverage
will stay the same regardless of whether you join a Medicare drug plan or not.
Here are some
things to remember when selecting a Medicare Prescription drug plan:
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Medicare
Prescription drug coverage is available now to help people with Medicare pay
for the prescriptions they need.
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Medicare
coverage for prescription medications is available to everyone with
Medicare.
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There is
also additional financial help available for those who need it most.
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The
Medicare Prescription drug coverage pays for brand-name and generic drugs.
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You will
be able to choose between at least two Medicare drug plans, selecting the
plan that best suits your needs.
Frequently Asked Questions
Who is eligible for Medicare
Prescription drug coverage?
All people
who have Medicare Part A and/or Part B are eligible to enroll regardless of age,
income or existing health conditions.
Is participation mandatory?
No. You can
choose whether to join in a Medicare drug plan.
How does Medicare Prescription drug
coverage work?
Private
insurance companies worked with Medicare to develop prescription drug plans
under Medicare's standard of care guidelines. Each plan is different, so people
will have to consider what coverage they have, if any, to determine if Medicare
Prescription drug coverage will be of greater benefit to them. For example, if
you have prescription drug coverage through your former employer or union and
the plan adequately covers prescription expenses on average at least as good as
Medicare Prescription drug coverage, you may want to stay with that plan; on the
other hand, if a Medicare drug plan can offer greater coverage than you
currently have, you may want to join a Medicare drug plan.
Can Medicare Prescription drug
coverage be purchased directly from Medicare?
No. All
plans are available through private insurance companies that have contracted
with Medicare to provide this benefit.
Will people who receive prescription
coverage through the VA have to change plans?
No. Medicare
Prescription drug coverage will have no impact on VA benefits.
Will Medicare Prescription drug
coverage be available in the
US
territories?
Yes.
Will prescriptions be free?
No. Just
like other insurance plans, you will pay a portion of the cost. Typically,
Medicare will pay 75% and you will pay the remaining 25% co-payment after an
initial deductible. In addition, you will have to pay a monthly premium
depending on the plan you select. See questions below.
How much will people have to pay for
Medicare Prescription drug coverage?
Most plans
have a yearly deductible of $250. In addition, the typical premium is about $37
per month (approximately $444 per year) in 2006. Plus, participants pay a
portion of the cost (a co-payment) for each prescription based on the plan you
select.
Once a beneficiary has paid the
entire $250 deductible, how much will his or her prescription drug plan cover?
In a typical
plan, after you have met the $250 deductible, Medicare will pay up to 75% of
prescription drug costs. You pay the other 25% until total drug expenditures
reach $2,250. In other words, you pay $500 for the next $2,000 of expense!
What happens
if my drugs cost more than $2,500 per year?
If your
total drug costs reach above $2,500 in a year, you become responsible for paying
100% of the prescription cost until your annual out-of-pocket drug costs reach
$3,600 in that year. This is called the “gap” or the “hole in the doughnut.” For
costs exceeding $3,600 in a year, the plan will pay most costs with no upper
limit. You will still pay a small amount, such as 5% or a flat co-payment for
each prescription.
When does enrollment in Medicare
Prescription drug coverage begin?
The initial
enrollment period began November 15, 2005 and ends May 15, 2006.
When did Medicare Prescription drug
coverage take effect?
January 1,
2006.
What is a late enrollment penalty?
If you do
not have creditable coverage through a retirement plan or union, and you delay
joining a Medicare prescription drug plan when first eligible, an additional
penalty fee of at least 1% of the premium for every month you are not enrolled
will apply. The higher premium will be in effect for the entire time you
participate in Medicare drug plan.
Why is there a late enrollment
penalty?
Congress
made the rule to encourage people to enroll in the beginning, or when they first
become eligible, instead of waiting to join when they are ill and healthcare
costs are higher.
What is “creditable coverage?”
Creditable
coverage refers to coverage from an employee or union plan that is on average at
least as good as Medicare's standard level of coverage. If you are enrolled in a
plan that has creditable coverage, you can wait to enroll in a Medicare drug
plan without incurring a penalty for late enrollment. Your current plan will
notify you if your retiree benefit provides you with creditable coverage.
Where can people get more
information?
Call
Medicare at 1-800-MEDICARE or visit Medicare's web site at www.medicare.gov.
How do Medicare beneficiaries get
started?
Most people
will need to evaluate the Medicare drug plans offered in their area.
The
government’s Medicare and You 2006 Handbook lists the approved plans to choose
from in your area (or look at www.Medicare.gov for the most up to date
information). You can join the plan of your choice between November 15, 2005 and
May 15, 2006. But remember, there is a penalty if you choose not to join a plan
when you are first eligible and you do not have “creditable coverage” from a
current or former employer or union.
If you have
both Medicare and Medicaid, Medicare enrolled you in a
plan on January 1, 2006 to make sure you get help paying for your prescription
drug costs.
For people
with limited income or resources, if you don’t join a plan by May 15, 2006,
Medicare will enroll you in a plan to make sure you get help paying for your
prescription drug costs.
In either
case, if you find a Medicare plan that better meets your needs, you can switch.
What is a Medicare Advantage Plan?
Medicare
Advantage Plans and other Medicare Health Plans are organizations such as HMOs,
PPOs and Managed Care Plans. These plans manage all
your healthcare needs by combining Medicare Part A (Hospitalization), Part B
(Doctors and Medical Supplies) and, now, prescription drugs. In the past, you
would have known them by the name "Medicare +Choice".
What is a Stand-Alone Medicare
Prescription Drug Plan?
A
stand-alone Medicare Prescription drug plan covers only prescription drugs. If
you join a Medicare Prescription drug plan you will need to continue your Part A
and Part B coverage separately.
How will the Medicare drug plans
differ?
Medicare
drug plans differ on which prescriptions are be
covered. All the plans meet Medicare's standard level of care criteria; however,
some plans offer more coverage and additional drugs, but at a higher premium.
Additionally, there may be differences in pharmacies you can use to get your
medication.
Will all drugs be covered?
Each
Medicare drug plan has a Medicare-approved list of drugs that are covered. The
list is called a “formulary”. Formularies vary from plan to plan, so it's
important to compare each formulary to find the plan that best meets your
medication needs.
What is a formulary?
A formulary
is a list of drugs that each particular plan covers, and it differs from plan to
plan. Be sure to request a formulary from the plans you wish to compare by
calling each plan’s benefits administrator. You will want to choose a plan that
best suits your prescription drug needs.
What else should I know about
comparing formularies?
You should
know that the cost of medications varies from plan to plan. You will want to
determine if the deductible and co-insurance fees are within your budget. Note
that some formularies may not cover one or more of the medications you take. If
one or more of your medications isn't listed, you may want to consider another
plan. Alternatively, your doctor might be able to write a new prescription for a
medication that is equal in therapeutic value and is covered by a particular
formulary.
Which drugs are excluded from the
formularies?
Certain
drugs are excluded from Medicare Prescription drug coverage by law, most
notably:
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Drugs
used for anorexia
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Drugs
used for weight loss
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Drugs
used for weight gain
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Drugs
used to promote fertility
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Drugs
used to promote hair growth
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Cough
and cold remedies
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Prescription vitamins and mineral supplements (except prenatal vitamins and
fluoride preparations)
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Non-prescription drugs
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Inpatient drugs
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Barbituates
(such as sleeping pills)
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Benzodiazepines (such as Xanax® and Valium®)
Is medication management available?
Yes. Help is
available to ensure that your medications work well together to help avoid
negative drug interactions. It's called “medication therapy management.”
Will participating pharmacies buy
drugs from Canada?
No. Only
drugs approved by the FDA for sale in the United States of America will be
eligible for coverage.
Can beneficiaries have their premiums
deducted from their Social Security checks every month?
For the most part, yes. Just like your Part B premium, you can have your Medicare
drug plan premium deducted from your Social Security check.
Is help available for people with
limited income and resources?
Yes. If you
are single and your income is below $14,355 and your savings, investments and
real estate (other than your home) are valued at no more than $11,500, you may
qualify for extra help from the government. If you are married and living with
your spouse and your income is below $19,245 and your savings, investments and
real estate (other than your home) are not worth more than $23,000, you may also
qualify. In some cases, people with limited income and resources will not have
to pay premiums or co-insurance for a Medicare drug plan. Income amounts may be
higher in Alaska and Hawaii.
What assets are counted to determine
if one is eligible for assistance?
Assets,
including cash or property that can be converted to cash within 20 days, may be
counted. Property excluded from the count includes the primary home, burial
plots or burial agreements. Funds of up to $1,500 that are set aside for burial
arrangements are also not counted.
When should people start applying for
assistance?
You may get
an application in the mail from SSA for extra help paying for a Medicare
prescription drug plan. It is very important that you fill out this application
and return it to SSA. If you don’t get an application in the mail and think you
may qualify for this help, call SSA at 1-800-772-1213. TTY users should call
1-800- 325-0778. You can also visit www.socialsecurity.gov on the web. SSA’s application process provides you with the quickest
decision. You can also go to your State Medical Assistance office to apply.
Once enrolled in a Medicare drug
plan, can a participant change plans?
Yes. Each
year there will be an annual enrollment period from November 15 through December
31, and participants can change plans then. Another circumstance that may give
a you the right to change plans would be if you moved outside of your
plan's service area, you could then choose a plan that services the new
location.
Will people who don't spend very much
each year on prescriptions benefit from having this?
Yes. Those
who participate in a Medicare drug plan will have access to discounts on the
medications they purchase, as well as peace of mind should they become ill in
the future.
What types of Medicare drug plans can
I choose from?
There are
three basic ways you can participate. They are:
Stand-Alone Medicare Prescription
Drug Plans - If you
participate in a Stand-Alone Medicare Prescription Drug Plan, nothing will
change with your Medicare Part A or B coverage. You will still have the freedom
to choose whatever participating doctor you prefer, and you may fill your
prescriptions through the participating mail order or retail pharmacy of your
choice.
Medicare Advantage Plan or other
Medicare Health Plans with Prescription Drug Coverage (HMO or PPO) - If you choose to enroll in a
Medicare Advantage Prescription Drug Plan, all aspects of your healthcare -
including your Medicare Part A and Part B coverage - are managed for you. You
will choose a healthcare provider from a list approved by your plan, and you
must fill your prescriptions through pharmacies that participate with your plan.
Employee Retirement Plan - This is a plan provided to you by
your former employer or union. If your plan is “creditable”
(on average, at least as good as a standard Medicare drug plan), you may want to
stay in that plan. All employee retirement plans are required by law to
inform you if the plan is considered “creditable.” If in the future you wish to
participate in a Medicare drug plan, you won't be penalized for waiting to
enroll.
What does the typical Medicare drug
plan look like, dollar-wise?
In addition
to the premium you may pay, the benefits design for a basic plan has the
following elements:
You
generally have a $250 deductible.
The plan
will pay 75% of your drug costs until you reach $2,250 - you pay 25% of the cost
(total of $500).
You will
then pay 100% of your drug costs until you reach a total out of pocket costs of
$3,600 per year (or $5,100 in total drug spending)
After you
have incurred $3,600 in out of pocket drug costs, the plan will pay 95% and you
will pay 5%.
Note: The
above numbers apply annually.There will be many
different plans, each offering different deductibles, co-payments and pricing!
Should I choose a regional or a
national plan?
It depends.
Let's say you live in Michigan but you spend
your winters in Florida.
You would want to choose a national plan. If, on the other hand, you live in Michigan year-round, a
regional plan would satisfy your needs as well as a national plan.