Senior Citizens Only
Social Security Part D

Every person who already has Medicare will have some choices to make about the prescription drug coverage that Medicare was offered January 1, 2006. Private companies will offer plans which will include different drugs, co-payments, and other benefits. The specifics of these plans will not be announced until October, so some of the many questions people with Medicare are asking can’t be answered until then.

Social Security Part D

Not all of the issues surrounding the Medicare Prescription Drug Plan (Part D) have been solved at this time. As new information becomes available, they will be inserted here.
Congress passed legislation which set up Medicare Prescription Drug Plans to meet the individual needs of the beneficiary. In order to meet individual needs, the process that Medicare uses requires the beneficiary to make a choice from among several options.
Medicare Prescription Drug Plans will be administered through many different plans developed by private companies, Unions, churches, etc. These companies will submit their plan to Medicare to provide prescription drugs to Medicare beneficiaries (similar to the process used by the Medicare-approved discount cards). Medicare will approve each company’s drug plan.
Beneficiaries may choose one drug plan from the Medicare-approved drug plans (or Medicare Advantage HMO or PPO plans) that offer drug coverage in the beneficiary’s locale. There may be as many as 40 different drug plans in Illinois from which beneficiaries will choose the plan which best fits their needs.
Not all plans will cover all prescription drugs or have the same monthly premium cost.
There are 112 different illness/injury/affliction categories. Drug plans must offer at least two prescription drugs in each category. Therefore, not every drug will be covered by every drug plan. Beneficiaries should choose the plan that includes all of their prescription drug needs.
The different drug plans can offer their plans at a different monthly premium than the standard Medicare plan.
The initial Medicare Prescription Drug Plan drug benefit enrollment period begins November 15, 2005 and lasts until May 15, 2006.
The standard prescription drug benefit in 2006 is:
Beneficiaries pay a monthly premium, on average, of about $32 for the standard Medicare plan (some will be lower and others may be higher). The exact premium amount will depend upon which prescription drug plan beneficiaries choose.
Beneficiaries are not required to enroll in Part D, but if they enroll later they will pay a higher monthly premium.
Medicare Beneficiaries who decide to enroll later than their initial enrollment period will have their monthly premiums cost 1 percent more per month that they wait to enroll (for example, if a beneficiary waits 6 months past their initial enrollment period to enroll, their monthly premium will always pay 6 percent more than what others pay).
The premium penalty does not apply to beneficiaries who have comparable coverage from another source (such as retirement health plans) which have certified in writing as at least as good as Medicare.
Beneficiaries with a group health plan which include prescription drug coverage will receive a letter from their plan administrator which announces whether their group drug coverage will be continued, and if so, whether it is as good as Medicare’s coverage ... or if their group drug coverage will end and whether their health plan will offer subsidies to retirees to supplement Medicare’s prescription drug coverage out-of-pocket costs.
Retirement health plans with drug coverage which is as good as Medicare’s can receive subsidies in order to discourage the retirement health plan from dropping their drug coverage for their beneficiaries.
Beneficiaries pay $250 annual deductible before Medicare pays anything.
Beneficiaries pay 25% of the costs of the next $2,000 of drug expenses (beneficiary pays $500 of next $2,000 of drugs costs plus all of the first $250 of drug costs for a total of up to $750).
After $2,250 of drug costs, there is no coverage until the beneficiary has paid another $2,850 worth of drug expenses (beneficiary pays up to $3,600 for up to $5,100 in drug costs).
Catastrophic coverage begins after beneficiary has paid $3,600 of out-of-pocket expenses ($5,100 total drug costs). The beneficiary pays the greater of $2 for generic, $5 for brand name drugs, or 5 percent of the costs, whichever is greater.
“Extra Help” financial assistance is available for low-income individuals:
Beneficiaries of Medicaid and Medicare (dual eligible) will automatically receive the following benefits. Medicaid eligible individuals who have Medicare can receive these benefits if they apply for “Extra Help” –
No monthly premium or annual deductible.
Beneficiary co-pays $1 for generic and $3 for brand name drugs up to $3,600 out-of-pocket.
After $3,600 out-of-pocket, Medicare pays all other drug costs.
Beneficiaries below 135 percent of the poverty level with assets below $6,000 for a single person and $9,000 for couples will receive these benefits if they apply for “Extra Help” –
No monthly premium nor annual deductible.
Beneficiary co-pays $2 for generic or $5 for brand name drugs up to $3,600 out-of-pocket.
After $3,600 out-of-pocket, Medicare pays all other drug costs.
Beneficiaries below 150 percent of the poverty level with assets below $10,000 for single person or $20,000 for couples will receive these benefits if they apply for “Extra Help” –
Monthly premium based on sliding fee scale.
$50 annual deductible.
After the deductible, beneficiary pays 15 percent of drug costs up to $3,600 out-of-pocket.
After $3,600 out-of-pocket, beneficiary pays $2 for generic or $5 for brand name drugs.
Apply for “Extra Help” at your local Social Security office. Local senior centers have “Extra Help” applications and can help with the application process.
Medicare prohibits the selling, issuance, or renewal of existing Medigap supplemental plans H, I, & J to Medicare Prescription Drug Plan enrollees which includes drug coverage. This prohibition would not apply to renewal of these Medigap policies for persons who do not enrolled in the Medicare Prescription Drug Plan drug benefit. Persons enrolling in the Medicare Prescription Drug Plan drug benefit during the initial enrollment period could enroll in a Medigap supplemental plan without drug coverage, or continue with plans H, I, & J if the plan is modified to exclude drug coverage.
Medigap issuers are required to notify holders of plans H, I & J of these changes 60 days prior to the initial Medicare Prescription Drug Plan drug benefit enrollment period.
Two new Medigap supplemental plans may be allowed in Illinois (Plans K and L). More information about these plan will be issued later.
There are no provisions in the Medicare drug benefit law to contain drug costs. In fact, the legislation prohibits Medicare from using its purchasing power to negotiate lower drug prices for beneficiaries.
Re-importation of drugs allowed from Canada, but only if safety is certified by the Secretary of the U.S. Department of Health and Human Services.
 

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