Prepared by Public Affairs 312-751-4777
Persons covered by the railroad retirement system participate in
the Federal Medicare program on the same basis as those under the social
security system. And, the Medicare Prescription Drug, Improvement and
Modernization Act of 2003 affects railroad retirement annuitants in the same
manner as social security beneficiaries.
As a result of the Act, on January 1, 2006, Medicare will offer voluntary
insurance coverage for prescription drugs through Medicare prescription drug
plans and other health plan options. Insurance companies and other private
companies will work with Medicare to provide a choice of drug plans that must
meet, at the least, a minimum standard of coverage as determined by Medicare.
These plans are different from the Medicare-approved drug discount cards that
became available in May 2004 and which will be phased out as the new drug plans
become available.
The following questions and answers explain how Medicare prescription drug plans
work and other aspects of the drug plans. They are based on information provided
by the Centers for Medicare & Medicaid Services (CMS), the Federal agency
responsible for administering the Federal Medicare program.
1.
How does a Medicare prescription drug plan work?
Enrollment in a Medicare prescription drug plan is voluntary. (However, Medicare
beneficiaries may have to pay a higher premium if they wait to enroll.) To
enroll, beneficiaries must have Medicare Part A and/or Part B and, generally,
will pay a monthly premium (estimated at an average of $32.20 in 2006) and an
annual deductible of up to $250. The beneficiary's plan will pay 75 percent of
drug costs between the deductible and $2,250. Beneficiaries will pay drug costs
from $2,251 until their out-of-pocket costs reach $3,600. The beneficiary's plan
will then pay 95 percent of drug costs above $3,600 for the rest of the calendar
year.
While Medicare prescription drug plans will vary, all drug plans will offer
coverage that, at the very least, meets Medicare's minimum standard of coverage
as described above. Some plans might offer more coverage and additional drugs
for a higher monthly premium. Medicare beneficiaries should compare Medicare
prescription drug plans and select the drug plan that best meets their needs.
Beneficiaries must contact the plan they want to join and ask how to enroll.
They may be able to enroll by telephone, mail, fax or via the Internet. They can
also enroll in a plan by using the Medicare Prescription Drug Plan Finder at
Medicare's Web site www.medicare.gov or by calling Medicare's toll-free number
1-800-MEDICARE (1-800-633-4227).
2. What types of prescription drugs will be
covered by Medicare prescription drug plans?
Most Medicare prescription drug plans will have a formulary, which is a list of
the prescription drugs that the plan covers. Drug plans will cover generic and
brand name drugs and may have rules about what drugs are covered in different
categories.
When drug plans get new information, they can change their formulary as long as
it continues to meet Medicare's requirements. Drug plans must let a beneficiary
know at least 60 days before a drug that he or she uses is removed from a
formulary or if a drug's cost is changing. If a beneficiary's doctor thinks the
beneficiary needs a drug that is not on the formulary, or if one of the
beneficiary's drugs is being removed from the formulary, the beneficiary, or his
or her doctor, can apply for an exception or appeal the decision.
3. When can people enroll in a Medicare prescription drug plan?
When people first become eligible for Medicare, they can enroll in a Medicare
prescription drug plan during the period that starts 3 months before the month
they turn age 65 and ends 3 months after the month they turn age 65.
Railroad retirement annuitants receiving benefits due to total and permanent
disability or due to occupational disability (if they have been granted a
disability freeze) can generally join a plan during the period that begins 3
months before and ends 3 months after their 24th month of cash disability
benefits. Railroad retirement annuitants receiving benefits due to occupational
disability who have not been granted a disability freeze are generally eligible
to join a drug plan at age 65. (The standards for a freeze determination follow
social security law and are comparable to the medical criteria for granting
total disability.)
Current Medicare beneficiaries can enroll in a Medicare prescription drug plan
from November 15, 2005, through May 15, 2006. This is called the "initial open
enrollment period." Coverage will begin on January 1, 2006, for beneficiaries
who join by December 31, 2005. If a beneficiary joins after December 31, 2005,
during this initial period, his or her coverage will be effective the first day
of the month after the month he or she joins.
Beneficiaries who do not join a
Medicare prescription drug plan when they are first eligible may have to pay a
higher premium if they choose to join a plan later. They will have to pay this
higher premium for as long as they have a Medicare prescription drug plan.
After this initial open enrollment period, Medicare beneficiaries can join or
change to a different plan during an "open enrollment period" from November 15
through December 31 each year. Coverage will begin January 1 of the following
year. Under special circumstances, beneficiaries may be able to join a Medicare
prescription drug plan at times other than those listed above.
4. How does a Medicare prescription drug plan work with a beneficiary's Medicare
health care plan?
Beneficiaries can get Medicare prescription drug coverage in one of two ways.
They can get a Medicare prescription drug plan that adds coverage to the health
care provided by the Original Medicare Plan, and some Medicare Cost Plans and
Medicare Private Fee-for-Service Plans. These prescription drug plans will be
offered by insurance companies and other private companies approved by Medicare.
A second option allows beneficiaries to get Medicare prescription drug coverage
as part of Medicare Advantage Plans and other Medicare Health Plans.
Beneficiaries would get all of their Medicare health care through these plans.
5. How can beneficiaries pay their Medicare prescription drug plan premiums?
Each month, Medicare prescription drug plans will send beneficiaries a bill for
their premiums. Generally, beneficiaries can pay for their premiums by check or
money order, or by having the amount of their premiums automatically withdrawn
from their bank accounts.
In the future, railroad retirement annuitants will be able to have their drug
plan premiums deducted from their railroad retirement annuities.
Even though
this payment option is not currently available, the eligibility of railroad
retirement annuitants to enroll in Medicare prescription drug plans is not
affected.
6. Can beneficiaries get help to pay for a Medicare prescription drug plan?
Yes. Medicare beneficiaries with limited income and resources (including their
savings and stocks, but not counting their home or car) of less than $11,500 in
2005 for a single individual or $23,000 in 2005 for a married individual (who
lives with his or her spouse) may qualify for extra help to pay for their drug
plan's monthly premium, annual deductible, and prescription copayments. The
amount of assistance a beneficiary receives depends on his or her income and
resources.
7. What if a beneficiary already has prescription drug coverage?
Beneficiaries who already have prescription drug coverage from other insurance,
such as a Medigap (Medicare Supplement Insurance) policy or coverage provided by
an employer or union, can keep that coverage. If that coverage offers the same
or better benefits than Medicare's minimum standard of coverage, beneficiaries
will not have to pay a higher premium to join a Medicare prescription drug plan
at a later date.
In many cases, beneficiaries will receive a notice from their other insurance
provider telling them if their current prescription drug plan covers as much or
more than a Medicare prescription drug plan. Beneficiaries who do not receive a
notice should check with their other provider to see how their coverage compares
to a Medicare prescription drug plan. Beneficiaries whose current drug coverage
is not as good as a Medicare prescription drug plan should contact their other
insurance provider to find out about their coverage options before they make any
changes to their prescription drug coverage.
8. How are Medicare Prescription Drug Plans different from Medicare-approved
drug discount cards?
Medicare prescription drug plans are insurance provided by private companies.
Like other insurance, beneficiaries pay a monthly premium, an annual deductible
and a copayment or coinsurance for their prescriptions.
The Medicare-approved drug discount cards that became available in May 2004 work
like grocery store or other pharmacy discount cards that allow beneficiaries to
get a discount on their prescriptions at the pharmacy. The cards were intended
as a temporary discount program to help people without outpatient prescription
drug insurance until the Medicare prescription drug plans became available.
9. Are Medicare-approved drug discount cards still available?
Yes. Medicare beneficiaries who do not have outpatient prescription drug
insurance through Medicaid can sign up for Medicare-approved drug discount cards
until December 31, 2005. Beneficiaries can continue to use their drug discount
cards until May 15, 2006, or until they join a Medicare prescription drug plan,
whichever is first. Once a beneficiary has a Medicare prescription drug plan, he
or she can no longer use a Medicare-approved drug discount card.
10. Is more information about Medicare prescription drug plans available?
Yes. More information about Medicare prescription drug plans is available from
the CMS publications Medicare and You 2006
and Your Guide to Medicare
Prescription Drug Coverage. CMS mailed copies of Medicare and You 2006 to
Medicare beneficiary households in October 2005. These publications, and others,
are also available by calling the Medicare toll-free number 1-800-MEDICARE
(1-800-633-4227) or by visiting Medicare's Web site at
www.medicare.gov.
Persons can also use Medicare's toll-free number and Web site to get free
personalized information to help them choose a Medicare prescription drug plan.
Free personalized counseling is also available from a State Health Insurance
Assistance Program (SHIP). Individuals can check Medicare and You, call
Medicare's toll-free number or access its Web site to learn how to contact their
nearest State Health Insurance Assistance Program.
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