What Physicians (and Patients) Need to Know About the Medicare Prescription Drug Program Medicare is offering coverage for outpatient prescription drugs beginning January 1, 2006. The California Medical Association (CMA) has developed this physician guide to help you understand the new program and to answer your patients’ questions about Medicare’s prescription drug benefit. This information is also available in CMA's Medicare Prescription Drug Program Brochure. Please feel free to download this brochure and make copies for your patients. 1. SENIORS CAN ENROLL     STARTING NOVEMBER 2005 Medicare beneficiaries can sign up for a new voluntary Medicare prescription drug plan between November 15, 2005, and May 15, 2006. If they enroll by December 31, 2005, their benefits will start January 1, 2006. If they join after that, their benefits will start the first day of the month after the month they join. However, there will be a late enrollment penalty of 1% a month. If seniors become eligible for Medicare after January 1, 2006, they can choose a drug plan when they sign up for Medicare. In general, seniors can join or change drug plans once a year, between November 15 and December 31. Important Dates: October 15, 2005: Prescription drug plans and formularies announced November 15, 2005: Enrollment starts January 1, 2006: Drug coverage begins May 15, 2006: Initial enrollment period ends 2. SENIORS WILL HAVE A CHOICE OF PLANS Seniors can choose from a number of plans offered by private companies approved by Medicare. Some plans may offer drug coverage along with benefits for hospitals, doctors, and other health services – all in one package. These are called Medicare Advantage Plans (PPOs, HMOs).There will also be stand-alone plans that only cover drugs. These drug-only plans can be used along with traditional fee-for-service Medicare. In October, Medicare will provide on its website a tool to help patients select a prescription drug plan. Patients will be able to enter their personal information and their medications and the tool will tell them which plans are covering their drugs and at what prices. Patients may also get this information by calling Medicare (800-633-4227; keep pressing '0' until you reach a live person). 3. DRUG BENEFIT COSTS The exact cost will depend on the plan seniors choose. The average drug plan premium nationally for 2006 will be $32.20 per person per month. The drug plan average in California will be $25.41. Every approved plan must have benefits that are the same or better than a standard set by Medicare. The standard Medicare drug plan and benefit costs each year are: Seniors pay an annual deductible of $250. (Some California plans are waiving the deductible.) The plan will pay 75% of the next $2,000 in covered prescription drug costs annually. Seniors must pay the rest – a 25% copayment. At this point, base coverage stops. This is the so-called doughnut hole. Seniors themselves must pay 100% of covered drug costs until they have paid a total of $3,600 – the annual out-of-pocket spending amount. If seniors spend more than $3,600 (the catastrophic coverage limit), the Medicare drug plan then pays for 95% of the rest of the covered drug costs for the year. Seniors pay the rest – a 5% copayment. This does not include the premium costs. Seniors with limited income will receive financial assistance to help pay the new drug benefit costs. As long as they exceed the Medicare standard, plans may vary in what specific prescription drugs are covered, how much the premium is, the amounts of the deductible and copayments, the coverage gap, and which pharmacies can be used. It is important for seniors to select the plan that best meets their prescription needs and financial status. 4. HELP FOR LIMITED-INCOME SENIORS Some seniors with low income and limited assets will get extra help. Seniors who qualify will pay no (or reduced) premiums and deductibles. They will pay only very small copayments. They also will have no gaps or breaks in coverage. In 2006, no deductibles or premiums will be required for most seniors on Medicare who have yearly incomes below $12,920 ($17,321 for couples). Copayments will be just a few dollars. Reduced deductibles, premiums, and copayments will apply to seniors on Medicare with yearly incomes below $14,355 ($19,245 for couples). Seniors should contact Social Security at (800) SSA-1213 for more information, if they think they qualify for this assistance. 5. PRESCRIPTION DRUG PLAN CHOICES Seniors fall into various eligibility categories. This will affect their decision about how to receive prescription drug benefits.       Employer, Spouse’s Employer or Union Coverage If seniors have drug coverage through a retirement plan, their spouse’s work, a union, or other program, they may keep that coverage if they wish. If they decide to keep the plan they have, it is VERY IMPORTANT that they make sure their drug plan covers as much as or more than a Medicare drug plan. If it does not, and then later they want to sign up for a Medicare drug plan, they will pay higher premiums, about 1% higher for every month they delay enrollment. In October 2005, seniors who already have drug coverage can call Medicare (800-633-4227) to see if the plan they have now is as good as a Medicare drug plan. They will also get a notice from their employer or union that tells them if their plan covers as much as or more than a Medicare drug plan. These plans are receiving federal funding to maintain their current drug benefits. Traditional Fee-for-Service (FFS) MedicareIf seniors are in traditional FFS Medicare and do not currently have drug coverage, they can enroll in a stand-alone prescription drug plan or leave traditional Medicare and enroll in a Medicare Advantage PPO/HMO plan.       Traditional Medicare with Medigap Coverage If seniors are in traditional Medicare and are currently receiving drug benefits through a Medigap plan, they will receive information from their Medigap plan this fall. Based on that information, they can either choose to remain in the Medigap plan or drop the Medigap plan and enroll in a prescription-drug-only plan or a Medicare Advantage plan.       Medicare Advantage (HMO/PPO) If seniors are in a Medicare Advantage plan (HMO, PPO) or other private Medicare health plan, they should receive information from the plan this fall regarding their drug benefit options. Based on that information, seniors can choose to remain in their current plan, choose an alternative Medicare Advantage plan, or choose traditional Medicare and join a prescription-drug-only plan.       Medicare and Medicaid Coverage If seniors have Medicare now AND get their medicines through Medicaid, they will also be asked to sign up for one of the new Medicare drug plans. If they don’t choose a plan this fall, they will be signed up for the new Medicare drug coverage automatically and a plan will be chosen for them. These seniors will have no plan premiums, deductibles, or coverage gaps, and copayments will be $1 for generic and $3 for brand name drugs. These seniors may also switch plans at any time. 6. COVERED MEDICATIONS The new benefit will include prescription drugs, biological products, vaccines, and insulin. Plans are expected to provide at least two drug choices from all the major drug classifications. Plans must also cover substantially all of the drugs in the following six special classes: antidepressants, antipsychotics, anticonvulsants, HIV drugs, cancer medications, and immunosuppressants. Specific prescriptions seniors will be able to fill will depend on their plan’s formulary (list of approved drugs). All plans and formularies will be unveiled in October 2005. Plans will also be allowed to consider certain drugs preferred and nonpreferred and will require higher copayments for the nonpreferred drugs. All plans and formularies will be published on the Medicare website. Seniors should review plan formularies to determine whether their medicines are covered and in the preferred drug category. Seniors will be able to enter their medications and other pertinent information into a tool on the website, which will assist them in checking formularies. Patients may also get this information by calling Medicare (800-633-4227). 7. PHYSICIANS MAY ASSIST PATIENTS Physicians may NOT help patients actually enroll in a prescription drug plan. However, physicians may advise patients about their plan choices and whether plan formularies cover the drugs the patient takes. 8. RESOURCES FOR PATIENTS CARxE: CARxE provides information about the new drug benefit, comparisons of plans and their formularies, plus the ability to enroll online. You may order printed material for your patients by calling (866) 394-7700. Brochures are available in English, Spanish, Russian, Chinese, Korean, Vietnamese, and Tagalog. AARP's Medicare Prescription Drug Coverage Gateway for Seniors 9. MEDICARE IS THERE TO ANSWER QUESTIONS To learn more about any part of the Medicare prescription drug program or any Medicare topic, physicians and seniors may call Medicare at (800) 633-4227 (be sure to keep pressing '0' until you reach a live person). The phone lines are answered 24 hours a day, seven days a week. Physicians and seniors can also go to the Medicare website at http://www.medicare.gov. Downloadable Resources from Medicare The Facts About Medicare Prescription Drug Plans [PDF/Publication 11065] This fact sheet gives a brief overview of the new Medicare drug plans that begin on January 1, 2006. Medicare Covers America [PDF/Publication 11141] This 2-page, tri-fold brochure provides basic information for people with Medicare about Medicare prescription drug coverage. This information includes how Medicare prescription drug coverage works, how to get coverage, and how to join a Medicare prescription drug plan. A Guide to Getting Started [PDF/Publication 11146] This 8-page brochure provides more detailed information about Medicare's prescription drug covereage, including what patients can do right now to make an informed decision about Medicare prescription drug coverage.