Medicare

The federal health insurance program for: people 65 years of age or older; certain younger people with disabilities; and people of any age with end-stage renal disease (permanent kidney failure with dialysis or a transplant), sometimes called ESRD. Part A pays for hospital care, Part B pays for doctor visits, Part C includes the managed care option, and Part D is the new prescription drug benefit.

Medicaid

A joint federal and state program that provides medical coverage for people with low incomes and limited resources. Medicaid programs vary from state to state.

Dual eligible (or duals)

A person who is eligible for both Medicare and Medicaid. CMS will automatically enroll dual eligibles in low-premium PDPs. If they choose to stay in a low-premium PDP, dual eligibles’ only cost for drugs will be a $1 co-pay for generic drugs and a $3 co-pay for brand-name drugs.

Centers for Medicare and Medicaid Services (CMS)

The federal agency that runs the Medicare program, including the Medicare Prescription Drug Benefit program. In addition, CMS works with the States to run the Medicaid program.

Prescription Drug Plan (PDP)

A private insurance plan that offers coverage for prescription drugs under Medicare, also known as a Medicare prescription drug plan.

Medicare Advantage Perscription Drug Plan (MA-PD)

The Part D prescription drug plan that will be offered to enrollees in a Medicare Advantage managed care plan.

Formulary

A list of medications that a prescription drug plan covers (prior authorization by the Medicare prescription drug plan may be required).

Premium

Regular monthly payment made to a health or prescription drug plan by beneficiaries for health care coverage. The lowest average premium for a Medicare prescription drug plan is expected to be about $32.

Co-payment

A dollar amount that a person must pay out-of-pocket for a medication or other health service. For example, a PDP may ask for a $3 co-payment for each generic prescription and $5 for brand name prescriptions. Co-pays may be further tiered by PDPs to discourage use of more expensive drugs.

Deductible

A flat dollar amount a person must pay before Medicare will pay for prescription drugs costs. The standard yearly deductible for Medicare patients who don’t have a low-income subsidy is $250.

Co-insurance

The percentage of the charge for drugs that a Part D enrollee may have to pay after any plan deductibles are paid. For instance, 10% co-insurance on a $50 prescription would be $5.

Extra Help

The name that has been given to the low-income subsidy program for Medicare Part D. Extra Help will pay for part or all of the Medicare prescription drug premiums for Medicare beneficiaries who have incomes below 135% of the Federal Poverty Level (FPL) (including dual eligibles) and part of the premium for those who have incomes between 135% and 150 % of the FPL. The benefit will protect beneficiaries under 150 % of the FPL from the gap in coverage referred to as the "doughnut hole." Dual eligibles will get this benefit without applying. All others will need to apply for Extra Help.

Social Security Administration (SSA)

The federal government agency that administers and enrolls Medicare beneficiaries into the low-income subsidy program, Extra Help.

Part D & Consumers

Starting January 1, 2006 , the federal Medicare program will provide a new prescription drug benefit. This new drug program (called the Medicare prescription drug benefit) will allow many people to get medications and will help pay for some or all of the drug costs for people who join a drug plan. This new program has many dates and facts to remember. All people with Medicare - especially people who have both Medicare and Medicaid - need to learn about this new program, how to enroll, and about their rights and responsibilities.

Questions Answered

NEW What is the CMS Point of Sale protection plan and how does it affect the transition of dual eligible individuals?

The Centers for Medicare and Medicaid Services (CMS) recently announced a new point of sale (POS) fallback plan for dual eligible patients (individuals eligible for both Medicaid and Medicaid) who, for whatever reason, failed to be enrolled in a pharmacy benefit plan, as part of the autoenrollment process for duals. When dual eligible patients appear at the pharmacy because they need a refill of their medication, if the pharmacist is unable to verify that the customer has been enrolled in a drug plan using the new centralized query system established by CMS, the point of sale (POS) protection plan will go into effect. » Click here to read the full answer.

NEW Are Medically Needy individuals counted as full-benefit duals?

If an individual has met a state’s criteria for Medicaid in any month between March and the end of 2005, they are deemed eligible for the full 2006 benefit year for Part D. In August, 2006, CMS will compare state data from 2005 with state data for Medicaid eligibility in 2006 to determine both the spend down eligibles (Medically Needy) and those qualified for the MSP (partial duals) to determine eligibility for Part D in 2007.

Who will the Medicare prescription drug program affect?

All people who receive Medicare are eligible to enroll in the new program, including: (1) people with Medicare and (2) people with both Medicare and Medicaid (known as "dual eligibles"). The new program will change how dual eligibles get their medications; these people will no longer get their medicine through the Medicaid program, but will now get drugs from this new Medicare program. For people who receive only Medicare, this new program offers financial help for prescription drug costs.

How can I enroll in the Medicare prescription drug program?

You will receive information about your local plan choices in October 2005. People with Medicare and Medicaid will be automatically enrolled into the lowest cost plan in their area in the fall of 2005, but may choose another plan before January 1, 2006. Other people with Medicare can voluntarily enroll by choosing a plan beginning on November 15, 2005. A Medicare & You handbook will be mailed to you from the Centers for Medicare and Medicaid Services (CMS) , and you can get information in writing and on the Internet to help you find the plan that meets your needs.

How is the Medicare prescription drug program set up?

This coverage is an insurance program, with two types of participating insurance companies: (1) private insurance prescription drug plans (PDPs) and (2) Medicare Advantage prescription drug plans (MA-PDs), which are managed care companies offering other health services and prescription drugs. You will be able to choose one plan and enroll to get coverage from that plan. Plans will decide what drugs to cover and list them (called a Formulary ). If you are currently in a Medicare Advantage managed care plan, you will need to choose a plan linked to your managed care plan.

What are the important dates to remember?

October 15, 2005 : Plan information available to public
November 15, 2005 : Enrollment begins
January 1, 2006 : Coverage begins
May 15, 2006 : Initial enrollment deadline

How much will the new Medicare prescription drug program cost?

Most people in a prescription drug plan will pay a monthly premium, co-payments for each medication, an annual deductible and co-insurance. People with Medicare and Medicaid and some people with limited incomes will have lower costs.

Is there extra financial help available? How can I apply for the extra help?

For people with limited income and resources - including people with Medicare and Medicaid and those with income below 150% of the Federal Poverty Level (or about $14,000 in annual income) - the government will pay for many of the costs of the new drug coverage through its Extra Help program.

People who fit the income guidelines should have received an application for Extra Help in the mail. People with Medicare and Medicaid should have received a letter informing them that they automatically get this extra help . If you did not receive a letter, call 1-800-MEDICARE (1-800-633-4227) or your local Social Security Administration (SSA) office to find out if you automatically get Extra Help or to fill out an application.

Current as of 12-27-2005

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