Medicare Prescription Drug Program FAQs
Courtesy of ARA
The new Medicare prescription drug coverage which began November 15 can be confusing. The Medicare Rx Education Network’s Frequently Asked Medicare Prescription Drug Coverage Questions were formed from queries coming into the network and published in media reports to tap into what people want to know about the new benefit. The network arrived at the 12 questions by evaluating records of phone calls and e-mails that the network received since its launch in July and by analyzing media coverage that gauged public inquiries about the new coverage. Network member organizations worked collectively to provide corresponding answers that were accurate and informative, yet clear.
Answers to the most frequently asked Medicare Prescription Drug Coverage questions:
Who sponsors Medicare’s prescription drug benefit?
Medicare’s prescription drug benefit is sponsored by the federal government’s Centers for Medicare & Medicaid Services, which is the Medicare agency. The benefit will be administered through private plans that are approved by Medicare and that must adhere to specific Medicare regulations and guidelines.
Is the benefit voluntary?
Yes, the benefit is voluntary.
Will the benefit cover all of the prescriptions I need and will coverage include “lifestyle drugs?”
The range of drugs each plan will cover will be comprehensive. Although the drugs covered may vary from plan to plan, keep in mind that the law mandates Medicare cover at least two medicines in each therapeutic category, and “all or substantially all” antidepressants, antipsychotics, anticonvulsants, anticancer drugs, immunosuppressants and drugs that treat HIV/AIDS. The “standard” benefit does not cover benzodiazepines (medicines to control anxiety and treat insomnia), or barbiturates. Although the “standard” plan doesn’t cover benzodiazepines, a Medicare drug plan may choose to cover benzodiazepines if it offers more than standard coverage. The “standard” benefit does cover products that help smokers quit. The benefit covers both brand name and generic drugs. If you need a medically necessary drug that is not covered by your plan, you can request an exception.
Are mail-order services available with the program?
Yes, some plans will offer mail-order service. Beneficiaries can opt to receive their medications by mail.
What are the income requirements for eligibility?
There are no income requirements to join a Medicare drug plan. Anyone who is eligible for Medicare is eligible for the prescription drug benefit. However, if you are a Medicare beneficiary with limited income and resources (annual income of $14,355 or below for a single person, $19,245 or below for a couple) and you want to apply to get extra help paying for the monthly premiums, deductibles and co-payments, there are income requirements for eligibility. (Complete the Application for Help with Medicare Prescription Drug Plan Costs, Form SSA-1020. You can get one by calling Social Security at 1-800-772-1213. )
How will the Medicare prescription drug coverage work with my existing health coverage on my retirement plan?
If you have prescription drug coverage through your employer or union, chances are you may want to stick with that prescription coverage. Your employer or union retiree plan will be sending you a letter between September and mid-November. It will explain if the retiree Rx coverage is comparable to, or better than what Medicare is offering. If it turns out that your retiree plan’s drug coverage is not as good as Medicare’s, you can join a Medicare prescription drug plan and you may still be able to keep your employer or union coverage for its other healthcare benefits (find out about your options from your benefits administrator). (Sign up for the Medicare drug plan by May 15, 2006, to avoid a late-enrollment penalty).
Can employers drop their prescription drug coverage because of Medicare’s new benefit?
Medicare created incentives for employers and unions to keep their retirees covered for prescription drugs by providing these plans with 28 cents on the dollar for their drug costs. Employers are likely to continue their prescription drug coverage. However, if your employer or union does stop offering prescription drug coverage, you can join a Medicare drug plan and you may be able to keep your retiree health plan for its other healthcare benefits (find out about your options from your benefits administrator). (Join within 63 days after your employer or union plan’s prescription coverage ends to avoid Medicare’s late-enrollment penalty).
How does Medicare’s drug coverage work with the Medicare-approved drug discount card?
The discount cards have always been temporary, intended to help until Medicare’s drug coverage becomes effective. You can continue to use your Medicare-approved drug discount card until you join a Medicare drug plan, or until May 15, 2006, whichever comes first: (a) If you join a Medicare drug plan between Nov. 15 and Dec. 31, 2005, your Medicare drug plan insurance coverage begins Jan. 1, 2006. The last day to use your discount card is Dec. 31, 2005; (b) If you join a Medicare drug plan between Jan. 1, 2006, and May 15, 2006 (the last day of open enrollment) your Medicare drug coverage begins the first of the month after you join. For example, if you join in January, your coverage begins Feb. 1, and the last day to use your discount card is Jan. 31. Join in February and your coverage begins March 1, so the last day to use your discount card is Feb. 28. Once you join a Medicare drug plan, you will be automatically disenrolled from your Medicare drug discount card, so you do not need to notify your discount-card company. If you decide not to join a Medicare drug plan, the last day you can use your discount card is May 15, 2006.
What are the costs of the program, including the deductibles?
A: The “standard” benefit includes a monthly average premium of $32.20 a month, a deductible of $250, and co-payments for each prescription. After the $250 deductible:
* For the next $2,000, you pay 25 percent. Medicare pays 75 percent.
* For the next $2,850, you pay 100 percent (this is the so-called “doughnut hole.”)
* For drug costs after that, you pay 5 percent. Medicare pays 95 percent.
* Prescription drug coverage is costing less than originally expected. For example, some plans offer monthly premiums of $20 or less. Some have deductibles lower than $250 or no deductible at all.
What is meant by the “doughnut hole?”
The “doughnut hole” is the gap in coverage in Medicare’s “standard” plan. (See the asterisk above.) Some organizations are offering benefit plans that fill in the coverage gap (“doughnut hole”), either entirely or partially.
Who keeps a tally of how much I spend with the benefit?
Your prescription drug plan (or Medicare managed care plan, if it includes prescription coverage) is responsible for tracking and calculating your drug costs. From your perspective, most of the tracking will occur automatically. However, you are obligated to let your plan know if you have any supplemental coverage for prescription drug benefits, and if you have been reimbursed for anything that you have paid out of pocket for prescription drugs. Your plan is responsible for coordinating benefits with state pharmacy assistance programs and other insurers such as group health plans, the Federal Employees Health Benefits Program and military coverage (including TRICARE).
Why is there a late penalty?
Like all health insurance, healthy individuals help pay for those who are sick. And when those who are healthy get sick, they are covered in the same manner. You don’t know if you’re going to be one of the sick individuals. But you could be. So, you want the advantage of group insurance to protect you. The late penalty acts as an incentive for healthy seniors to sign up and, in this way, to ensure the stability of the coverage. The initial open enrollment period is Nov. 15, 2005, to May 15, 2006. If you enroll after May 15, 2006, you will pay a monthly penalty of 1 percent of the monthly premium, and the penalty will continue over the life of your coverage.
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Courtesy of ARA Content
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