Medicare Prescription Drug Benefits

1. Medicare Prescription Drug Benefits Employee Workshop November 2005

2. Purpose of This Workshop • To help you help someone else • To give you an overview • To help get you started • To give you some resources NOTE: We are not the experts!

3. What is Medicare? • Different than Medicaid (low income) • Health insurance program for • People age 65 and older • People under age 65 with certain disabilities, and • People of all ages with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant) • Part A – Hospitalization Insurance • Part B – Medical Insurance • Part C – Medicare+Choice (Medicare Advantage) • Part D NEW – Prescription Drug Coverage

4. Medicare Premiums • Part A • No monthly premium, part of FICA tax • Part B • deducted from Social Security check • $88.50 per month for 2006 • Part D • ~$32 per month for 2006 • Will vary if enroll in private plan

5. Medicare if 65+ Year Old is Covered by Active Employee Plan • Part A begins even if working and is secondary (employer coverage pays first) • Part B enrollment can be delayed with no late sign up penalty • Part D enrollment can be delayed with no late sign up penalty if coverage is considered “creditable” – at least as good as Medicare • Employer must send a notice by November 15, 2005

6. Medicare Part D: What is it? • Currently, Medicare does not cover most outpatient prescription drugs • Medicare Modernization Act of 2003 adds this coverage as of January 1, 2006 • Centers for Medicare and Medicaid Services (CMS) in charge of Part D • Part D coverage is voluntary coverage • Most enrollees will pay a premium • Exception for lower income people • Penalty for late enrollment (1% per month), if not enrolled in a plan that is at least equivalent, on average, to Part D

7. Medicare Part D: Standard Plan Design • Premium: You pay a monthly premium in addition to your Medicare Part B premium – the estimated average monthly premium is $32 • Deductible: You pay the first $250 in drug costs before the plan begins to pay • Coinsurance: You pay 25% of your drug costs from $250 to $2,250; Medicare will pay 75% • 100% Self-Pay Portion, called “The Donut Hole”: You pay 100% of your drug costs from $2,250 to $5,100 • Catastrophic Coverage: After your total drug costs reach $5,100 and you have paid $3,600 in out-of-pocket costs, you pay only 5% of any costs above $5,100 for the rest of the year; Medicare will pay the other 95%

8. Medicare Part D: Standard Plan Design Catastrophic Coverage Plan Pays 95% of Costs 5% Cost-Sharing (or $2/$5 Copays)Above Stop-Loss Stop-Loss - Member reaches $3,600 in True Out-of-Pocket costs Beneficiary Pays Next $2,850 in Rx Spending The infamous “donut hole” 100% Paid by Retiree Estimated Average Monthly Premium $32 Initial Coverage Limit $2,250 25% Co-Insurance Paid by Retiree($500) 50% of Costs Paid by Insurer ($2,113) 75% Paid by Plan($1,500) Beneficiary Paid Plan Paid $250 Deductible paid by Retiree 2006 Graphic by Preferred Care

9. When Can Someone Join? • Between November 15, 2005 and May 15, 2006 • If join by December 31, 2005, coverage will begin January 1, 2006 • Otherwise, coverage will be effective the first of the month after the month person joins

10. Medicare Part D: Private Plans • Many private companies will offer prescription drug coverage that qualifies under Medicare Part D. • The companies will likely charge you a premium for this coverage. • According to CMS, there will be private drug plans in every region (21 in NYS). • Some private plans will offer • premiums below $30 per month • plans with no deductibles, or deductibles lower than Medicare’s standard $250 deductible • plans with coverage that exceeds Medicare’s standard design in other ways

11. Medicare Part D: Low Income Benefits Category 1: • you have both Medicare and full Medicaid coverage • your annual income is below $9,570 if you’re single • your annual income is below $12,830 if you are a married couple

12. Medicare Part D: Low Income Benefits Category 2: • you do not qualify for Category 1 • you have Medicare • your annual income is below $12,920($17,321 for a married couple) • your assets are below $7,500($12,000 for a married couple)

13. Medicare Part D: Low Income Benefits Category 3: • you do not qualify for Category 1 or 2 • you have Medicare • your annual income is below $12,920($17,321 for a married couple) • your assets are below $11,500($23,000 for a married couple)

14. Medicare Part D: Low Income Benefits Category 4: • you do not qualify for Category 1, 2 or 3 • you have Medicare • your annual income is below $14,355($19,245 for a married couple) • your assets are below $11,500($23,000 for a married couple)

15. Prescription Drug Choices • Keep employer-provided or union-provided coverage, if available • Elect coverage under Medicare Part D standard benefits through CMS • Elect coverage under Medicare Part D low income benefits if qualified • Apply through Social Security Administration • Elect coverage under a private plan that qualifies under Medicare Part D • Keep EPIC as secondary coverage if qualified (NYS only)

16. Medicare Part D: Your next steps • If person has coverage from a former employer or union, find out what their Rx benefit will be for 2006 • Will coverage be continued? • Will coverage be changed? • Is coverage creditable? (notice to be sent by November 15) • What is the type of medical coverage (Medicare HMO or Medicare Advantage plan – see warnings on later slide) • Determine whether you fit any of Medicare’s low income categories • Learn which private plan choices are available • Verify that the plan you want covers the drugs you take • Determine whether there is a specific pharmacy network • Compare expected out-of-pocket costs under each available option

17. Medicare Part D: Your next steps (cont’d) • If you have Power of Attorney (POA) • You can enroll person in a Medicare prescription drug plan • You can fill out application to get extra help (low income) on his/her behalf as well • You do not have access to private health information. You would need the person to complete a HIPAA form (authorizing the release of private health information to you); obtain from insurance carrier • Enroll between Nov. 15 and May 15 for 2006, if appropriate

18. What do RIT retirees need to know? • RIT will continue to offer RIT Rx in 2006 • Copays increasing to our standard plan design: $10/$25/$40 for generic/formulary/non-formulary drugs • RIT Rx is at least as generous as Medicare Part D • No late enrollment penalty for Part D later • RIT retirees do not need to take any action • RIT retirees in Preferred Care Gold or Medicare Blue Choice should definitely not enroll in a Medicare prescription drug plan • FYI: RIT is applying to receive the employer subsidy available from Medicare • Retiree enrollment: October 31-November 18 • Retiree meetings being held

19. Some Friendly Warnings! • Medicare Advantage Plans (HMOs, like Preferred Care Gold and Medicare Blue Choice): • Must choose that plan’s Rx coverage (if any) • If they elect a standalone Medicare Rx plan, CMS will disenroll them from the Medicare Advantage plan, and they will have only Medicare Parts A&B for medical coverage for 2006! • Watch out for fraud/scams: • No one trying to enroll you in a plan can come to your door uninvited • No one can ask you to enroll before Nov. 15th • No one can ask you for personal information during marketing activities • Never give out personal information until you are certain the person or product is approved by Medicare • If you have questions or concerns, call 1-800-MEDICARE

20. For More Information • Read the Medicare & You 2006 handbook mailed to Medicare eligibles in October (includes plans in the person’s region) • Contact Medicare • www.medicare.gov • Select Search Tools to get personalized information • Select Frequently Asked Questions to get answers to common questions • Call 1-800-MEDICARE (1-800-633-4227)/v and 1-877-486-2048/TTY • To apply for the low income benefit, contact the Social Security Administration at 1-800-772-1213/v or 1-800-325-0778/TTY; information about the low income benefit is available on the SSA website: www.ssa.gov. • Call the State Health Insurance Assistance Program for face to face assistance; New York State number is (800) 333-4114 • go to www.shiptalk.org or contact Medicare to find the phone # for other states • Contact AARP • www.aarp.org/medicarerx • Call 1-888-OUR-AARP (1-888-687-2277) • Look for local Medicare-related events

21. Your Questions??NOTE: We are still not the experts!