|
Prescription Drug Benefit: Questions & Answers
Q. Who is eligible for the new Medicare prescription drug benefits?
In 2004 and 2005, all Medicare
beneficiaries who are not also eligible for Medicaid will be able to purchase a prescription drug discount card.
In 2006, all Medicare beneficiaries will be eligible for the voluntary prescription drug
coverage.
Q. Who will receive prescription drug coverage in 2006?
All Medicare recipients who want prescription drug benefits will be able to sign up for coverage, but it is not mandatory
to join the program.
Q. When does the prescription drug program go into effect?
In 2006, the new prescription drug benefit will become available to all Medicare beneficiaries.
Medicare beneficiaries will then have the option of signing up for a stand-alone drug plan or joining a private health plan that offers drug coverage as part of total health coverage.
Q. Who will manage the prescription drug program?
Private insurance plans will manage the new Medicare drug benefit.
However, the government will provide standard drug coverage in any region that does not have at least one stand-alone prescription drug plan and one integrated private health plan.
Q. How will the new
prescription drug benefit help low-income Medicare beneficiaries?
For beneficiaries with annual incomes below $8,980 (or $12,120 for couples) and who are already receiving Medicaid:
-no monthly premium;
-no annual deductible;
-Medicare covers all drug costs with the exception of nominal co-pay of approximately $1 for generics and $3 for brand name drugs.
For beneficiaries with
annual incomes between $8,980 (or $12,120 for couples) and $12,123 (or $16,362 for couples) and with less than $6,000 in assets (excluding home, a car and jewelry):
-no monthly premium;
-no annual deductible;
-Medicare covers all drug costs with the exception of nominal co-pay of approximately $2 for generics and $5 for brand name drugs;
-Seniors in nursing homes will have no drug co-pays.
For beneficiaries
with annual incomes between $12,123 (or $16,362 for couples) and $13,470 ($18,180 for couples) and with less than $10,000 in assets (excluding home, a car and jewelry):
-Reduced monthly premiums;
-$50 annual deductible;
-Medicare covers 85% of drug costs from $$51 to $5,100 in total annual drug spending;
-Medicare covers 100% of drug costs when total drug spending exceeds $5,100 with the exception of
nominal co-pay of approximately $2 for generics and $5 for brand name drugs.
Q. Explain the standard Medicare prescription drug benefit under the new law.
Beginning in 2006, Medicare
beneficiaries who choose to enroll in the program will be charged premiums averaging $35 a month per person or $420 per year.
There will be an annual deductible of $250 meaning that Medicare beneficiaries
will be responsible for the first $250 in annual drug costs. After a senior meets the $250 annual deductible, Medicare will pay 75% of remaining drug costs up to $2,250. The senior will pay the remaining 25%.
Medicare beneficiaries will be responsible for total annual drug costs between $2,250 and $5,100.
Medicare coverage will resume when total annual drug expenses exceed $5,100. After this "catastrophic cap," Medicare will pay 95 percent of the cost of each prescription.
Example: A senior currently spends $2,000 annually in drug costs
Annual out-of-pocket costs beginning in 2006
$35/month premium$420.00
$250 deductible$250.00
25% of $1750$437.50
Total Out of Pocket Costs$1,107.50 - a savings of $892.50 or 44%!
Q. Why is there a gap in Medicare prescription drug coverage?
Without this gap in coverage, the total cost of the
program is estimated to exceed $1 trillion. However, the program provides a significant benefit to seniors, many of whom previously had no coverage at all.
This benefit will be particularly helpful to low-income seniors and seniors with high out-of-pocket drug expenses.
Most seniors will receive significant assistance with their drug costs under the new
program.
The typical senior spends $1,460 annually for their medications. Medicare will cover 95% of the catastrophic expenses for those with total annual drug expenses greater than $5,100. Seniors with drug expenses between $2,250 and $5,100 will also receive drug discounts of 25% or more so even seniors in "the gap" receive a benefit.
Q. Can seniors keep their current Medicare coverage?
The new prescription drug benefit is completely voluntary.
Medicare beneficiaries can keep their current coverage, add the new prescription drug coverage, or select a private health plan option from the new Medicare Advantage program. The new Medicare Advantage plans will also offer prescription drug benefits.
Q.Will seniors actually save any money in this program?
Yes, savings will be immediate and directed toward those who need it the most.
The prescription drug discount card program, available in 2004 and 2005, will save seniors 15-20% or more on their drug costs. After the new drug benefit becomes effective in 2006, low-income seniors will have all of their drug spending covered after co-payments of less than $5, and as little as a dollar.
Q. Why won't the new prescription drug benefit be available until 2006?
The U.S. Department of Health and Human Services (HHS) is working to implement the vast new Medicare law.
HHS must establish a network of prescription drug providers and enroll nearly 40 million seniors. In the interim period of 2004 and 2005, the prescription drug discount card will be available to provide immediate assistance to seniors.
Q. Will the new prescription drug benefit mean higher premiums?
Congress estimates the average premium for the new drug coverage will be approximately $35 per month in 2006 - about a
dollar a day.
Prescription drug plans will compete for enrollees based upon premiums - plans that negotiate lower drug discounts will be able to offer lower monthly premiums to entice the greatest number of enrollees.
Q.
How will the new drug benefit affect seniors that already have drug coverage?
The new prescription drug benefit is 100% voluntary.
Medicare beneficiaries who like their current coverage can simply keep it and not pay for the new coverage.
|
->