Beginning January 1, 2006, Medicare will offer prescription drug coverage to people with Medicare. For the first time, you can choose coverage for this important health need, and Medicare will help pay for it. Medicare will provide coverage to help you pay for both brand-name and generic drugs you need. To get Medicare prescription drug coverage, also referred to as Medicare Part D, you must choose and join a Medicare drug plan.
The remainder of this topic presents additional information items about this coverage in a question and answer format.
What are Medicare Prescription Drug Plans?
Medicare drug plans will be offered by insurance companies and other private companies approved by Medicare. There are two types of Medicare plans.
· There will be Medicare Prescription Drug Plans that add coverage to the Original Medicare Plan, Medicare Private Fee-for Service Plans that don't offer Medicare prescription drug coverage, and Medicare Cost Plans.
· There will also be prescription drug coverage that is a part of Medicare Advantage Plans (like a HMO, PPO, or a PFFS Plan) and other Medicare Health Plans. You would get all of your health care, including prescription drug coverage, through these plans.
If you have limited income and resources, you may get extra help to pay for your Medicare drug plan costs.
How Much Will the Plans Cost?
Your costs will vary depending on your financial situation and which Medicare drug plan you choose. The average monthly premium in 2009 is about $28, but premiums in some plans are lower. Costs and coverage will vary depending on the drug plan you choose.
This premium will be in addition to your monthly premium for Medicare Part B. You can choose to have the drug premium taken out of your Social Security check or pay it directly to your Medicare drug plan sponsor. Each person must pay a premium as an individual. There are no discounts for married couples.
All Medicare drug plans will offer at least the standard level of coverage below. Medicare drug plans may design their plans differently as long as what their plan offers is, on average, at least as good as the standard coverage described below. Some plans may offer more coverage for higher premiums.
Standard Coverage (the minimum coverage drug plans must provide):
In 2009, for covered drugs you will pay:
· A monthly premium (varies depending on the plan you choose).
· The first $295 per year for your prescriptions. This is called your "deductible."
After you pay the $295 deductible, here's how the costs work:
· Initial Coverage - You pay 25% of your yearly drug costs and your plan covers the other 75% of these costs, up to a combined total of $2,700. In other words, you will pay $675 and the plan will cover $2,025 of this amount. At this point, you will have paid a total of $970 -- your $295 deductible, plus $675 that represents your 25% share of the additional amount up to $2,700; then
· Coverage Gap - You pay 100% of the cost of your drugs up to $4,350 (in total) out-of-pocket before your coverage starts again (this gap in coverage is sometimes called the "donut hole"; it is the gap in coverage during which you continue to pay premiums but receive no drug coverage). While you are in this coverage gap, the plan will pay nothing toward your costs. This means that you could pay up to an additional $3,380 before Medicare's coverage continues; then
· Catastrophic Coverage - You pay 5% of your drug costs (or a small copayment) for the rest of the calendar year once your total drug costs reach $6,375. Your plan pays the rest. This is called the "catastrophic coverage." In other words, catastrophic coverage begins after you have spent $4,350 on drugs out-of pocket over the course of the year, not including premiums. ($4,350 = $295 deductible + $675 in copayments + $3,380 in the coverage gap.)
The description above shows the relationship of your drug expenses and Medicare prescription drug coverage for this year. It describes only the standard coverage. Medicare drug plans may offer something different, but they must have at least the same overall value.
Some plans may be called standard plans but may be designed so that the deductible is lower and the coinsurance is slightly higher. Other plans may charge copayments or set amounts instead of coinsurance.
In general, your out-of-pocket costs should work out to be about the same under these plan designs.
How do I Enroll?
You can enroll in three ways:
· Enroll online on the http://www.medicare.gov/ web site.
· Call the plan directly.
· Call 1-800-MEDICARE and Medicare will help you enroll.
Can I Change Plans After I Enroll?
Yes. After May 15, 2006, you can change your plan during the annual open enrollment period, which will be from November 15 through December 31 each year. Your Medicare prescription drug plan will begin January 1 of the following year. You can only change plans during the annual open enrollment period; you cannot change during the year.
What about Medicare-approved drug discount cards?
The Medicare-approved drug discount cards were offered as a transition step until Medicare prescription drug plans became available.
You can use your Medicare-approved drug discount card until May 15, 2006, or until you join a Medicare prescription drug plan, whichever is first. Once you have a Medicare prescription drug plan, you can't use your Medicare-approved drug discount card. You will get coverage for prescription drugs through the Medicare prescription drug plan instead of saving with the discount card.
Can I still use any credits left on my Medicare-approved drug discount card after December 31, 2005?
Yes. You can continue to use your Medicare-approved drug discount card and your credit until May 15, 2006 or until you join a Medicare-prescription drug plan, whichever is first. After you join a Medicare prescription drug plan, you can't use your Medicare-approved drug discount card. You also can't use any of the credit you have left.
Each item below includes a link to additional information available online at the medicare.gov website. The documents are available in PDF and HTML formats, and many are available translated into languages other than English.
Quick Facts about Medicare's New Coverage for Prescription Drugs, available online at:
New Medicare Prescription Drug Coverage - Who Can Help Me Apply and Enroll?, available online at:
Quick Facts about Medicare's New Coverage for Prescription Drugs for people with a Medicare-approved drug discount card, available online at:
The Facts About Medicare Prescription Drug Plans, available online at:
Medicare - Overview
Medicare Part D Prescription Drug Coverage - Overview
Medicare Part D Prescription Drug Coverage - Interaction With Other Programs
Medicare Part D Prescription Drug Coverage - Extra Help With Costs
Medicare Part D Prescription Drug Coverage - Glossary
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