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What
is Medicare? |
Medicare
is a federal health insurance program that covers approximately 43 million
Americans who are:
- age
65 or older,
- any
age with permanent kidney failure, and
- any
age with certain disabilities
The
parts of Medicare are:
- Part
A: Hospital Insurance
- Part
B: Medical Insurance
- Part
C: Medicare Advantage
- Part
D: Prescription Drug
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Part
D is new for 2006 |
Part
D coverage is a new prescription drug benefit effective 1/1/06. It does require
enrollment and the premium will be subsidized by the government. Part D does
not impact Part A or B drug coverage because a drug that is available under Part
A or Part B is excluded from the definition of Part D drug and , therefore,
cannot be included in Part D basic coverage. |
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What
are the Standard Medicare Part D Benefit Highlights?
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- $250 deductible
- Medicare will pay 75% of drug costs up to $2,250
- Enrollee pays 100% of drug costs between $2,250 and
$5,100 (this is called a coverage gap)
- After $3,600 in out-of-pocket spending, Medicare
will pay approximately 95%
Part D members must pay a premium for Part D
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Can
insurance companies offer better benefits? |
Yes,
but they must also offer a plan that is actuarially equivalent to the standard
plan. All Prescription Drug Plan Sponsors must be approved by CMS.
Beneficiaries
with limited income and resources may qualify for extra help. For more
information you can check the Social Security Administration website at www.socialsecurity.gov or the Medicare
website at www.medicare.gov .
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What
about Medicare Discount Drug Cards? |
Medicare
Discount Drug Cards will no longer be available after December 31, 2005. The
discount drug cards can be used until May 15, 2006 or until the beneficiary
purchases Medicare Part D, whichever comes first. |
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Enrollment
in Medicare Part D |
Medicare
Part D is open to anyone who is entitled to Medicare Part A
OR enrolled in Medicare Part B.
Enrollment
is voluntary. If you don't enroll when first eligible a late enrollment penalty
of 1% of premium per month will apply. At this time there is not a cap on the
late enrollment penalty.
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What
if you don't like the Part D plan you signed up for? |
You
can stop your Medicare Part D benefit plan at any time but you will not be
allowed to join another plan until the annual election period. The annual
election period will be from November 15 through December 31. Late enrollees
can only join a plan in the annual election period.
There
are special enrollment periods for some situations. Some of them are:
- A
permanent move out of the plan service area
- When
someone enters or leaves a long-term care facility
- Involuntary
loss of, or reduction of, creditable coverage
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Part
D and Creditable Coverage |
Medicare
beneficiaries who have another source of drug coverage may stay in that plan and
not enroll in Medicare Part D IF that other source of coverage
is at least as good as the Part D standard benefit, which is called "creditable
coverage". If a beneficiary has creditable coverage they will avoid late
enrollment penalties when they enroll for Part D.
Employers
must notify anyone who is currently covered under a group health plan if their
drug coverage is considered "creditable coverage". Not all group plans are
considered creditable coverage. |
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What
Drugs are in the Formulary? |
This
is where the benefits get a bit tricky to understand. The actual drugs covered
by each Medicare Drug Plan are determined by the Plan. If a company
offers three different Part D plans the formulary could be different for each
plan. It is important to people enrolling in Part D to check the
formulary listing for the plan they are considering. If someone gets a drug
that is not on their formulary they will need to pay 100% of the drug cost and
that amount WILL NOT apply to their out of pocket. |
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What
happens to people who have Medicare Supplements H, I, or J?
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They
can change to a different Medicare Plan or they can keep what they have. The
drug coverage on the supplement plans H, I, & J is not considered creditable
drug coverage. Plans H, I, & J will no longer offer prescription drug
coverage to new subscribers after 1/1/2006. |
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How
do people sign up for Part D? |
They
can sign up directly with a PDP provider or with a certified broker. Signing
up thru a broker does not change the premium. The benefit of signing up thru a
broker is that you have someone local to call with questions. Don't hesitate to
call Robyn Hamlin at 314-438-0222 or send an email.
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IMPORTANT!! |
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Employers
must notify anyone who is currently covered under a group health plan if their
drug coverage is considered "creditable coverage". Not all group plans are
considered creditable coverage. |
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Are
all Part D formularies the same? |
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NO!
This is where it gets a bit tricky. See the paragraph toward the end of the
newsletter. |
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