Medicare Modernization Act of 2003's Prescription Drug Coverage through Part D
On January 1, 2006 the Centers for Medicare & Medicaid Services (CMS), for the first time ever extended coverage for prescription drugs to Medicare beneficiaries. This publication is designed to answer some common questions regarding the program and to assist beneficiaries with understanding how the program works for them.
What are Medicare Parts A, B, C and D?
Medicare Part A typically pays for your inpatient hospital expenses. There is no fee charged for this coverage for most beneficiaries.
Medicare Part B typically covers your outpatient healthcare expenses, including doctor fees. There is a premium for this part of your coverage.
Medicare Part C offers a choice of options, including Medicare Managed Care plans (like Medicare HMOs and PPOs) and Medicare private fee-for-service plans. These are known as Medicare Advantage Plans. There are also Medicap Plans available.
How the Plan Works
You will have to pay a premium each month for the Part D benefit. Each enrollee wishing to participate will have to elect the Part D coverage and choose a corresponding Prescription Drug Plan (PDP) or a Medicare Advantage Prescription Drug Plan (MA-PD). Open enrollment is from November 15th –December 31st of every year.
When can I enroll?
- Open enrollment is from November 15th – December 31st of every year.
- During election of Medicare at age 65.
- 25th Month of Disability when you are eligible for Medicare benefits.
The Standard Benefit in 2010
The cost will be subject to change every year. Please see your Medicare & You guide, visit www.Medicare.gov or call Medicare at 1-800-Medicare (1-800-633-4227)
- Beneficiary pays $310 annual deductible before Medicare pays anything.
- Beneficiary pays 25% of the costs of the next $2,830 of drug expenses.
- After $2,830 of drug costs, there is no coverage until the beneficiary has paid another $3,610 worth of drug expenses. This is referred to as the Gap or the Donut Hole.
- Catastrophic coverage begins after the beneficiary has paid $4550 of out-of-pocket expenses. Here you will pay a small coinsurance (such as 5%) or a small
copayment (such as $2.15) for each prescription until the end of the year.
Need Help With Your Plan D Cost?
- You can apply for Extra Help paying for your Plan D through your local Social Security office or on line at www.ssa.gov.
- Some states may have assistance through their State Prescription Assistance Plan. Contact your local Social Services Department.
- Discuss possible generic alternatives with your physician.
Terms to Know
- CoPay - Amount you will be expected to pay for your drugs (example: $5.00 for generics or $10.00 for brand name).
- Premium - Amount you will pay monthly to have a Medicare Part D Plan (This amount will be established by the Insurance Company).
- CoInsurance - The percentage you will have to pay for your drugs (example: 25%).
- Formulary - A list of drugs that are covered by an insurance company.
FREQUENTLY ASKED QUESTIONS
I have prescription coverage through my employer-sponsored retirement plan. Do I need to enroll in Medicare Part D?
This decision will have to be made once your former employer decides whether or not they are going to maintain coverage for retirees. Companies have the option to either maintain their current drug benefits, or to reduce or eliminate prescription drug coverage for Medicare-eligible beneficiaries. Employers must notify their Medicare eligible retirees of their decision to discontinue, reduce or maintain drug coverage. Beneficiaries must compare the benefits available to them and select the option that best suits their needs.
I have both Medicare and Medicaid (with prescription coverage). Do I need to enroll in Medicare Part D?
Beneficiaries who are dually eligible for both Medicare and Medicaid must enroll in Medicare Part D or they will be automatically enrolled. You will need to select a prescription drug plan that best meets your medication needs. You will now have a co-payment on most prescription drugs, which will be based on your income.
Will I be penalized for not enrolling in Part D?
If the beneficiary enrolling in Part D does not have credible drug coverage (defined as at least as good as Part D), then they will be penalized for late enrollment. Penalties take the form of increased monthly premium charges. Rates will be determined by the length of your delayed enrollment. If the enrollee does have credible coverage, becomes eligible for the Extra Help, or becomes Medicaid eligible he/she will be able to enroll in Part D at a later date with no penalty.
Presently I am under a Medicare + Choice program (Part C). What changes can I expect with the new Medicare Part D Prescription plan?
Medicare Part C is being restructured to Medicare Advantage (MA) Plans. Medicare Advantage Plans are made available through private health care companies. Medicare Advantage Plans may be a HMO (Health Maintenance Organization), POS (Point of Service) plan, PFFA (Private Fee-For-Service) plan or PPO (Preferred Provider Organization). Each Medicare Advantage Plan will offer varied benefits, depending on the plan you select. If you choose a Medicare Advantage Plan that does not offer prescription drug coverage, you may participate in the Medicare Part D program.
For More Information on This Topic:
Or call Medicare at: 1-800-MEDICARE
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