January 1, 2006, Medicare now offers prescription drug coverage
for everyone with Medicare. Anyone with Medicare Part A and/or
Part B can join a Medicare prescription drug plan offered in
their area. The coverage is offered through plans provided by
insurance companies and other private companies.
Initial enrollment in the drug
plan began Tuesday, November 15, 2005 and ended Monday May 15,
2006. If you joined a plan by December 31, 2005, your Medicare
prescription drug plan coverage began on January 1, 2006. If
you joined after December 31, 2005, your coverage is effective
the first day of the month after the month you joined. The coverage
is an option available to all Medicare beneficiaries but is
especially important to certain categories of beneficiaries.
- Beneficiaries on limited income,
$14,355 for a single person and with resources under $11,500
(or $19,245 for a married person living with his/her spouse
and resources under $23,000) may qualify for extra help paying
for your Medicare prescription drug costs
- A person can enroll in
the extra help program through the Social Security Administration.
- A person will need to
join a Medicare prescription drug plan for Medicare to
pay for drug costs.
- Medicare enrolled Medicaid
beneficiaries in a plan if they had not enrolled by December
- Medicaid beneficiaries
must join a Medicare prescription drug plan for Medicare
to pay for drugs.
- Medicaid will still pay
for other health costs.
- Beneficiaries on the state
Pharmacy Assistance Program, such as the Kidney Health Program,
are required to apply for the extra help program and are to
keep any denial letter they receive from Social Security.
This is important as it will determine the level of assistance
they will receive from the Kidney Health Program.
Employer and Union Options
for Working with Medicare Prescription Drug Coverage
You may be one of approximately 11.5 million people with Medicare
currently covered by employer and union-sponsored ealth plans
that offer prescription drug benefits, this includes:
- Active employees and retirees
- Spouses and dependents
- Participants in private health
plans (including church-sponsored plans) Participants
in federal health plans (e.g., FEHB, TRICARE, VA) and
- State/local government health
Medicare is providing incentives
to encourage employer and union retiree plan sponsors to offer
a variety of options to their participants.
Employer/Union Plan Options
- Offer retiree coverage that
takes the place of Medicare prescription drug coverage. Sponsors
will receive tax-free Retiree Drug Subsidy” to reimburse
a portion of their costs or retirees who do not join a Medicare
drug plan. Participating employers and unions must provide
retiree drug coverage that is “actuarially equivalent”
– on average, of equal or greater value to Medicare
standard prescription drug coverage, taking retiree premium
contributions into account. Retiree would not join a Medicare
drug plan. Note: If the retiree joins a Medicare drug plan,
the employer/union cannot collect the subsidy.
- Offer retiree coverage through
a separate, stand-alone rug plan that supplements Medicare
standard drug coverage. his plan does not replace Medicare
prescription drug coverage, but adds to it. With this option,
the retiree must join a Medicare drug plan to receive full
prescription drug coverage. Retiree receives prescription
drug coverage from a Medicare drug plan, and supplemental
coverage from his or her employer/union plan. Note: The supplemental
employer/union coverage does not count toward the retiree’s
$3,600 true out-of-pocket limit.
- Offer customized Medicare
coverage with additional retiree rescription drug coverage.
Employer/union purchases upplemental drug coverage from a
Medicare drug plan, or contracts directly with Medicare to
become a Medicare drug plan and provide the coverage. Retiree
receives Medicare prescription drug coverage and employer/union
supplemental coverage from the same entity. Retiree must join
the Medicare drug plan the employer/union has chosen to get
the additional coverage.
- Employer/union may choose
to pay part or all of retirees’ Medicare drug plan premiums.
In this case, the retiree ust join a Medicare drug plan to
get Medicare prescription drugcoverage. This option is available
to employer/unions regardless of whether they also provide
retiree drug coverage.
Employer/union drug sponsors are required to provide a disclosure
notice to all people eligible for Medicare prescription drug
coverage-including active workers, disabled workers, individuals
on COBRA, retirees and their dependents-whether their current
drug coverage is “creditable,” that is, whether
thecoverage is, on average, at least as good as Medicare tandard
prescription drug coverage. The disclosure notice may be included
in other correspondence but must be provided by November 15,
2005. Note: This notice is very important because retirees will
not have to pay a premium penalty to join a Medicare drug plan
after May 15, 2006, provided they did not go without creditable
coverage from another source for 63 consecutive days or longer.
People with limited income and resources (in 2005, resources
of no more than $11,500 single; $23,000 for married couples)
may qualify for extra help, even if they already have prescription
drug coverage through their employer/union. You should compare
the monthly premiums, annual and lifetime plan design caps and
limits, co-payments, deductibles and coinsurance requirements
of your employer/union plan versus a Medicare drug plan. Also
check that your specific drugs, brand-name and generic are covered.
Note: Even with creditable coverage, some retirees may find
it to their advantage to sign up for a Medicare drug plan that
costs them ess after all factors are considered.A
good source of information regarding your options is to visit
your plan’s website, or call your benefits administrator.
For more information about how
employer/union drug coverage can work with Medicare prescription
drug coverage, visit http://www.cms.gov.
Social Security Administration (SSA)
MEDICAID beneficiaries whose
prescription drugs are paid byMedicaid:
- Your Medicaid prescription
drug coverage is changing.
- Medicaid will no longer pay
for most of your prescription drugs after December 31, 2005.
- Medicare started paying for
most of your prescription drugs beginning January 1, 2006.
- You will have continuous
drug coverage and pay a small amount out of your own pocket.
- You will have unlimited drug
coverage (no longer limited to three per month)
- You must join a Medicare
prescription drug plan for Medicare to pay for your drugs.
If you did not join a plan by December 31, 2005, Medicare
enrolled you in a plan to make sure you did not miss a day
can call 1-800-MEDICARE (1-800-633-4227) to verify your plan.
- You can also verify your
plan through your pharmacy.
- You have the right to change
- Medicaid will still
pay for your other health costs.
For information and/or assistance contact MEDICARE at 1-800-633-4227,
TTY users 1-877-486-2048 or on the web at www.medicare.gov.
- The CARxE Benefits Gateway - free online solution to the
difficult task of selecting a prescription drug plan
- provides objective, unbiased information via one-on-one
assistance from trained educators and is not affiliated with
any insurance company or plan.
- Locally you can contact the
Area Agency on Aging of Harris County 713-794-9001
or the Access to Benefits Coalition 713-341-6186.
the Area Agency on Aging Home Page