Medicare Drug Coverage - AARP

Medicare Drug Coverage What You Need to Know about...

Comparing Plans Enrolling in a Plan Switching Plans Keeping Your Costs Down

Table of Contents

Introduction

1

What is Medicare Drug Coverage?

1

How does the coverage work?

2

What do the plans cover?

2

What Should I Consider When Choosing a Plan?

3

Cost

4

Coverage

5

Convenience

6

Customer Service

7

Joining and Using a Drug Plan

7

Should I enroll in a plan?

7

How do I compare Medicare drug plans?

10

How do I enroll in a plan?

11

When can I enroll in plan?

11

How do I use my plan?

12

How and when can I switch plans?

12

Exceptions, Appeals, and Complaints

14

Good Things to Remember

16

Keeping Your Costs Down

17

Where Can I Get Help with the Costs?

18

Who Should I Call?

20

Quick Medicare Part D Enrollment Checklist

22

Medicare Part D Coverage Determination Request Form 23

Copyright ?2006 AARP.

Introduction

Each year, from November 15 to December 31, people enrolled in a Medicare drug plan may switch plans. Others who have not yet enrolled in a plan can also use this time to sign up.

In October, drug plan sponsors will start promoting their drug plans for the coming year. If you already have Medicare drug coverage, you will want to read over the changes, if any, made to your plan and compare this coverage with other plans available in your area. The information in this booklet will help you choose drug coverage that meets your needs. If you decide to keep the same drug plan, you can continue your coverage without doing anything.

If you haven't yet enrolled in a drug plan, and you think you might like to do so, you'll find this same information useful in helping you decide whether or not Medicare drug coverage is right for you and, if so, how to enroll.

What is Medicare Drug Coverage?

Medicare, the federal health insurance program for people 65 and older and for younger people with disabilities, offers insurance coverage to help pay for prescription drugs. This insurance coverage is known as Medicare Part D.

There are two kinds of Medicare plans that provide insurance coverage for prescription drugs:

1. "Stand alone" prescription drug plans that offer only prescription drug coverage. You can add this type of plan to Original Medicare and some types of Medicare Advantage plans that do not cover prescription drugs; or

2. Medicare Advantage Plans (which you may also see referred to as Medicare Health Plans or Medicare Part C) such as health maintenance organizations (HMOs) or preferred provider organizations (PPOs). You can get all of your Medicare health care and prescription drugs through one plan.

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How does the coverage work?

? Everyone on Medicare can get drug coverage, regardless of income. ? You choose and enroll in a private plan approved by Medicare. ? The coverage is voluntary; you don't have to sign up. ? You cannot be denied coverage for health reasons. ? There is no single Medicare drug plan. Wherever you live, you will

have several plans from which to choose. Also: ? If you are worried about not being able to pay the insurance pre-

miums, copays and the deductible for Medicare Part D, there is a program known as Extra Help, which pays for or lowers these costs for people who qualify. Many states also have programs that may help pay the cost of prescription drugs. (Learn more on page 18.) Helpful Tip: If you already receive Extra Help paying for Medicare prescription drug coverage, you may get a letter from the Social Security Administration asking whether your financial situation has changed during the year. If it hasn't changed, you will not need to fill out the application form again to keep the Extra Help in the following year.

What do the plans cover?

The standard drug benefit provides: ? An initial level of prescription drug coverage, and ? Added protection for those with very high drug costs (known as

catastrophic coverage). Medicare drug plans may look very different from the standard benefit. However, all drug plans approved by Medicare must offer the standard level of coverage set by Congress. Many plans provide greater savings and more coverage.

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Here is the standard level of Medicare drug coverage:

Deductible Initial Coverage

You may need to first pay a deductible (up to a maximum of $265 per year in 2007) before your plan starts to help pay for your drugs.

Your drug plan will then pay about 75 percent of your drug costs and you will pay roughly 25 percent of your drug costs, up to a combined total of $2,400 in 2007.

Coverage Gap also called the Donut Hole

If your total drug costs, that is, the amount paid by both you and your drug plan are higher than $2,400 (in 2007), you will pay 100 percent of the cost of your drugs up to $3,850 (in total) out-of-pocket (in 2007) before your coverage starts again. Note: Premiums don't count as out-of-pocket drug costs.

Catastrophic Coverage

Once your total drug costs reach $5,451.25 in 2007, your plan will cover up to 95 percent of the rest of your prescription drug costs for the calendar year.

(Medicare law requires that these dollar values be updated each year.)

What Should I Consider When Choosing a Plan?

Consumers can choose from many drug plans. Each drug plan sponsor can offer up to three different drug plans. The benefits and costs are different between sponsors and drug plans.

When choosing a plan, you should consider the four Cs.

? Cost--How much do my drugs costs? How much are the plan's premiums, deductible, coinsurance, and copays?

? Coverage--What drugs are covered by the plan?

? Convenience--Are there plan pharmacies in my community? Does the plan provide a 90-day supply through the mail?

? Customer Service--How easy is it to reach a plan representative when you have a question?

The following section describes the features common to most drug plans and how they may vary.

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