Your Current Coverage
To get started, find the statement below that best describes you.
If you use an average amount of prescription drugs, Medicare’s new prescription drug coverage could pay over half of your drug costs next year. If you have very high drug costs, Medicare will pay up to 95% of these costs after you spend $3,850 out-of-pocket in a year.
What you need to do - To get this drug coverage, you can join a Medicare Prescription Drug Plan that covers prescription drugs only and keep your Original Medicare coverage the way it is. Or you can join a Medicare Advantage Plan or other Medicare Health Plan that covers doctor and hospital care as well as prescriptions. Medicare Advantage Plans usually give you extra benefits and/or lower costs, but only if you use the doctors and hospitals that participate in the plan’s “network.” If you do not opt for prescription drug coverage by May 15, 2006, you will have to pay a late enrollment penalty to get drug coverage later.
Medicare prescription drug coverage will generally provide significant savings compared to what you are paying in co-payments for drugs under your Medigap plan, and will generally provide much better protection against high drug expenses as well.
What you need to do - Decide between keeping your Medigap policy with drug coverage or joining a Medicare plan that offers prescription coverage. Look for more information from Medicare and the plans offering drug coverage in your area in the fall, and compare the drug coverage from your Medigap plan to the new Medicare coverage. Unlike Medigap, most of the cost of Medicare drug coverage is paid by Medicare, and will never run out if you have high drug costs. Also, if you do not join a Medicare Drug Plan or a Medicare Advantage Plan that offers prescription drug coverage by May 15, 2006, you will have to pay a late enrollment penalty to get drug coverage later. If you opt for Medicare prescription drug coverage, tell your insurer and the drug portion of your Medigap policy will be removed.
Medicare will help employers or unions continue to provide retiree drug coverage that meets Medicare’s standard. Your former employer or union has choices about how they will work with Medicare.
What you need to do - Look for information coming from your former employer or union this fall. This information will explain how they will work with Medicare on prescription drug coverage and what decisions you will have to make. If you do not hear from them, visit their website or call your benefits administrator.
Medicare is working with Medicare Advantage and other Medicare Health Plans to help them provide even more coverage and/or lower costs. Your plan will let you know about the prescription drug options they will offer. You can also choose to switch to another Medicare Advantage Plan or Medicare Health Plan. Or you could choose the Original Medicare Plan and join a Medicare Prescription Drug Plan.
What you need to do - In October, look for information in the mail explaining any additional prescription drug coverage your plan will offer.
Starting January 1, 2006, you will get your prescription drug coverage from Medicare instead of Medicaid. The prescription drug coverage from Medicare has no premiums, no deductibles, and no gaps, and you will pay very little or nothing for almost all prescriptions.
What you need to do - Starting in the fall, you will need to decide which Medicare plan that offers prescription drug coverage you would like. If you do not sign up for a plan, Medicare will sign you up for one to make sure you do not miss a day of coverage. You can switch to a different plan if you choose.
Almost 1 in 3 people with Medicare will qualify for extra help that will cover between 85% and almost 100% of the costs of their drugs. Most people who are eligible for this extra help will pay no premiums, no deductibles, and no more than $5.35 for each prescription. The amount of extra help will be based on income and resources (including savings and stocks, but not counting your home or car.) You may qualify if your resources are less than $11,500 if you are single, or $23,000 if you are married and living with your spouse.
What you need to do - People who may qualify will receive an application in the mail this summer from the Social Security Administration. Or you can call 1-800-SSA-1213 for more information. If you think you may qualify, you should apply. Complete the application as soon as possible. If you qualify, you will need to join a plan this fall for your coverage to start January 1, 2007. This fall, Medicare and the Medicare plans offering drug coverage in your area will send you information, and you’ll get help with deciding which plan works for you.
* Rules are different for people living in the territories.
