Important questions and answers about the Medicare –Approved Prescription Drug Discount Card

What changes in Medicare law have prompted the inception of the new Medicare drug card benefit?

Who is eligible for the Medicare -Approved Drug Discount Drug Card Benefit?

An additional Medicare law was signed in December 2003. This new Medicare law puts into place major modifications in the nation's health insurance program for people age 65+ and some persons with disabilities.

The most significant part of the new Medicare law is an additional benefit to assist people in Medicare with their prescription drug costs.

The initial phase of this benefit began in May 2004, when many people on Medicare opted to sign up for the Medicare-approved prescription drug discount card to assist them with defraying the cost of certain drugs. Individuals may continue utilizing the card until the next phase of this benefit begins in January 2006.

Prior to this new Medicare law, how did individuals obtain assistance with controlling the high cost of most prescription drugs?

Numerous individuals already have some type of prescription drug coverage. This coverage may have been obtained through a variety of sources. Listed below are a few examples of how individuals have obtained their existing prescription drug coverage:

-existing prescription drug coverage may have been included in a benefits package from a previous employer

-existing prescription drug coverage may have been obtained through enrollment in a state pharmacy assistance program

- existing prescription drug coverage may have been obtained through the purchase of a Medigap plan.

I already have existing prescription drug coverage. What can you tell me about the Medicare Drug Card Benefit?

First and foremost, you need to know that the enrollment process has started for a new Medicare Drug Benefit which begins in 2006. Medicare approved drug card programs are designed to allow Medicare beneficiaries to save up to 15% on certain prescription drugs. Medicare –approved drug card providers may charge an annual fee of no more than $30 per year. When eligibility requirements are met, certain individuals will qualify to have this annual fee waived. To determine whether a potential drug card is Medicare –approved, look for the authentic Medicare approved logo which is on the Medicare website.

What can I do to assess my current situation?

Learn more about at your existing prescription drug coverage you have chosen and how it may or may not be affected.

Let’s begin with an understanding of Medigap plans:

If you are currently enrolled in a Medigap plan that does not have drug benefits, your coverage is not affected.

If you are currently enrolled in a Medigap plan with a prescription drug benefit, you have a new choice to make. Do you want to keep your existing Medigap drug benefit or do you wish to enroll enrolling in the new Medicare drug benefit? This new benefit is voluntary and exclusion will not affect your current Medicare benefits.

Listed below are some factors which may help you with this important decision making process regarding your prescription drug benefit:

If you are truly satisfied with the prescription drug benefit you receive under your existing Medigap plan you can opt to keep it and not enroll in the Medicare prescription drug benefit program.

What may happen if I change my mind and want to obtain the Medicare prescription drug card benefit?

If you change your mind in the future and wish to obtain the Medicare prescription drug benefit, you may incur a late enrollment penalty. In addition, your Medigap plan premium may go up.

What are my options if I decide that I wish to enroll in the Medicare prescription drug benefit?

If you decide you want the Medicare prescription drug benefit here is a list of options:

1. You can either enroll in a different Medigap plan without drug benefits.

2. You can maintain your current Medigap plan, but drop its drug benefit and pay a lower Medigap premium.

3. You can sign up for a Medicare Advantage plan with drug coverage.

How will Medigap policies be impacted when the Medicare prescription drug benefit begins in 2006?

Once Medicare's prescription drug benefit begins in 2006, new Medigap policies with drug benefits can no longer be sold. This means that individuals who do not already have a Medigap policy with drug benefits will not be able to purchase one.

What can you tell me about State Pharmacy Assistance Programs?

Each individual state will decide how its prescription drug program will work with the Medicare prescription drug benefit. It is likely that these changes may impact items such as the cost of premiums, co-payments, deductibles and gaps in coverage. gaps.

State pharmacy assistance programs can pay for drugs during the coverage gap. Unlike retiree benefits, these payments count towards the $2,850 out-of-pocket spending.

What is Retiree Health?

Over the past number of years, employers have started to reduce or do away with prescription drug coverage for their retired employees. Numerous people are concerned that the new Medicare law will prompt additional employers to drop retiree coverage. Employers who offer prescription drug benefits that are equal to the Medicare drug benefit will receive a federal subsidy. This subsidy will cover a portion of the companies' drug costs as long as their retirees don't enroll in the Medicare drug benefit.

It is your option whether to enroll, even if you are currently covered for drugs by a retiree health plan. Choices your previous employer makes about coverage in 2006 will probably influence your choice.

You can still enroll in Medicare's drug benefit and your previous employer can "wrap around" the benefit with your particular retiree health plan. In that situation, the employer will not receive the federal subsidy.

Here are a few significant facts for you to think about:

• The Medicare drug benefit does not start until 2006. By then, you will receive more information from Medicare and your previous employer that will assist you in your decision of whether or not to enroll.

• Employers will make choices about whether to change their retiree drug coverage. For example, they may decide to "wrap" their benefit around the Medicare program to fill in gaps in coverage. Or, they may decide to only pay the Medicare drug premium for retirees. However, in both cases your employers will not be eligible for the federal subsidy.

• Retiree benefits can help pay for prescription drug costs during the Medicare coverage gap. It is important to remember that the amounts paid will not count toward the $3,600 in your total out-of-pocket spending.

• The Medicare drug benefit is completely voluntary. In the case that your employer opts to provide drug benefits that "wrap around" Medicare's benefit, enrollment will be a necessity or else your employer will not be eligible for the federal subsidy.

• If your employer cancels your retiree health benefits after your initial chance to enroll in the Medicare drug benefit, you can enroll later providing your employer's plan is no less than the Medicare Part D benefit. You may incur a late fee apply under certain circumstances.

Here is a list of important dates to remember:

November 15-December 31 2004–Enroll for the Medicare discount drug card for 2005 or opt to switch to a different Medicare Card

January 2005-$600 credit on discount card for individuals who meet the lower income qualifications

November 15, 2005–Initial Medicare Drug Benefit (Part D) enrollment begins

January 2006-Drug card program phases out Medicare Drug Benefit (Part D) begins

For Further Insight:

Medicare will provide you more information as the benefits begin. You may also Visit the Medicare Web site or call toll-free 1-800-MEDICARE (1-800-633-4227 or TTY 877-486-2408). If you prefer to receive assistance in person, there are counseling programs that can provide complete help.