How do I go about choosing a Medicare-approved drug discount card?

I am on Medicaid spenddown. Am I eligible for a Medicare-approved drug discount card and $600 credit?

When will enrollment in a Medicare-approved drug discount card become effective?

When can I change Medicare-approved drug discount cards?

For which drugs can the $600 be applied?

Can I get a discount and the $600 credit?

Will the availability of the $600 credit or discount prices prevent or delay an individual’s eligibility Medicaid under a "spenddown?"

How much will I save on my medicines if I join a Medicare-approved drug discount card?

When does Medicare begin paying for my prescription drug costs?

My income is very limited. It will be hard for me to pay the premiums and deductible under the new Medicare prescription drug benefit. Is there any extra help for me?

What is Medicare Advantage and how does it work with Medicare + Choice plans?

I have a Medigap plan that covers prescription drugs. Can I keep that plan and also choose Medicare's prescription drug coverage?

What types of services are covered under Medicare?

Who is eligible for Medicare?

Can I delay Medicare Part B enrollment without paying higher premiums?

Important information you need to know regarding Medicare prescription drug and supply claims.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

• you have Medicare Part A and/or Part B, and
• your annual income in 2005 is no more than $12,919 ($1077/month) if you are single, or no more than $17,320 ($1444/month) if you are married (this includes your income and your spouse's income).

NOTE: different rules for Alaska and Hawaii below.

You can't get the $600 credit if you already have outpatient prescription drug coverage from any of the following:

• Medicaid
• TRICARE for Life (military health insurance)
• Employer group health plan or other health insurance coverage including a few Medicare Managed Care Plans (other than a Medicare Advantage plan or Medigap policy)
• FEHBP (health insurance for Federal employees or retirees)

Even if you don't qualify for the $600 credit, you may be able to save money on your prescriptions with a Medicare-approved drug discount card.

If you and your spouse both qualify for the credit, you will each get the credit and won't have to pay your annual enrollment fee.
Income limits in Alaska are $16,133 ($1,345/month) if you are single and $21,641 ($1,804/month) if you are married.
Income limits in Hawaii are $14,864 ($1,239/month) if you are single and $19,926 ($1,661/month) if you are married.

The following sources of income should be included when calculating your gross income for your $600 credit enrollment form:

• Employee compensation (salary, wages, tips, bonuses, awards, etc.)
• Unemployment compensation
• Pensions and annuities
• Social Security benefits (including Social Security Equivalent portion of RR Retirement)
• Railroad Retirement benefits
• Veterans Affairs (VA) benefits
• Military and government disability pensions – armed forces, Public Health Service (PHS), National Oceanic and Atmospheric Administration (NOAA), Foreign Service (based on date pension began, combat-related pension, etc.)
• Individual Retirement Account (IRA) distributions
• Interest (savings accounts, checking accounts, etc.)
• Ordinary dividends (stocks, bonds, etc.)
• Refunds, credits, or offsets of state and local income taxes
• Alimony received
• Business income
• Capital gains
• Farm income
• Rental real estate, royalties, partnerships, trusts, etc.
• Other gains (sale or exchange of business property)
• Other income (lottery winnings, awards, prizes, raffles, etc.)

The following sources of income should not be included when calculating your income for $600 credit enrollment form:

• Inheritances and gifts (taxed to estate or giver if not under limits for exemption)
• Interest on state and local government obligations (e.g., bonds)
• Workers compensation payments
• Federal Employees Compensation Act payments
• Supplemental Security Income (SSI) benefits
• Income from national senior service corps programs
• Public welfare and other public assistance benefits
• Proceeds from sale of a home
• Lump sum life insurance benefits paid upon death of insured
• Life insurance benefits paid in installments
• Accelerated life insurance death benefit payments (e.g., viatical settlements, terminal illness, chronic illness)
• Medical Savings Accounts (MSA) withdrawals for medical expenses
• Payments from long-term care insurance policies (subject to limitation)
• Accident or health insurance policy benefits
• Accident compensatory damages
• Child support payments received
• Most foster care provider payments received
• Disaster Relief grants
• Disability payments as the result of a terrorist attack

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How do I go about choosing a Medicare-approved drug discount card?
The four steps below can help you choose a Medicare-approved drug discount card.

1. Get information about your current prescription drug coverage. Make a list of the prescriptions you currently take and how much you pay for each drug to see if a discount card may be right for you.
2. Find out which discount cards are available in your state, and get information on each one.
3. Compare each discount card based on what is important to you.
4. Decide if you want a discount card. Choose the one that is best for you. Fill out and send your enrollment form to the company.

For assistance in choosing a Medicare-approved drug discount card, please call 1-800-MEDICARE (1-800-633-4227).

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I am on Medicaid spenddown. Am I eligible for a Medicare-approved drug discount card and $600 credit?
If you have outpatient prescription drug benefits through Medicaid, you will not be eligible for the Medicare-approved drug discount card or $600 credit. However, if you are on Medicaid spenddown, but have not yet met your spenddown requirement, you may qualify for a Medicare-approved drug discount card and a $600 credit to help you pay for your prescription drugs. If you become eligible for Medicaid outpatient drug benefits as a result of meeting the spenddown requirement, you will still be able to use the card and the $600 credit. In this case, Medicaid becomes the primary payer for drugs covered by Medicaid. You can save whatever remains of the $600 credit to use in the future should you lose your Medicaid benefits, or you can use the credit for drugs not covered by Medicaid.

If you move in and out of Medicaid spenddown status each month, your Medicare-approved drug discount card and credit will not be affected.

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When will enrollment in a Medicare-approved drug discount card become effective?
If you are approved for a Medicare-approved drug discount card (including the $600 credit, if you qualify), you can begin using your card the first day of the month following the month the sponsor receives and approves your completed enrollment form. For example, if you are approved on March 12, 2005 you can begin using your card on April 1, 2005.

If you apply early in the month, you may receive your Medicare-approved drug discount card before the first of the following month. Generally, you must wait to use your discount until the first of the month. If you apply late in the month, you may not receive your card by the first of the month due to mailing time. You must have your card to take advantage of the drug discounts.

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When can I change Medicare-approved drug discount cards?
Generally, once you have submitted your enrollment form to the Medicare-approved drug discount card sponsor of your choice you must remain enrolled in that card for the rest of the year.

There are some special circumstances in which you may disenroll from your current card and enroll in another one during the year. These are:

• If you move out of the service area of your current discount card
• If you enter or leave a long-term care facility (like a nursing home)
• If you enroll in or disenroll from a Medicare managed care plan
• If the Medicare-approved drug discount card you are currently enrolled is no longer offered
• If you choose to leave the Medicare-approved drug discount card you are enrolled in for any reason other than those listed above, you cannot apply for a new discount card.

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For which drugs can the $600 be applied?
You can use the $600 credit toward most drugs that are filled with a prescription and are approved by the Food and Drug Administration (FDA). However, the credit cannot be used for certain drugs, such as over-the-counter (OTC) drugs, weight-related, fertility, and cosmetic drugs, drugs for symptomatic relief cough or colds, vitamins (except prenatal), barbiturates, benzodiazepines, and certain drugs that Medicare already covers for you under Part B. The card sponsor and your pharmacy will know when to apply the $600 credit.

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Can I get a discount and the $600 credit?
Card sponsors may, but are not required to, offer discounts on prescription drugs. Check with the card sponsor or the pharmacy to find out if you will get a discount with your card.

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Will the availability of the $600 credit or discount prices prevent or delay an individual’s eligibility Medicaid under a "spenddown?"
No. Neither the $600 credit nor the discount prices will have a negative impact on the Medicaid eligibility process. The discount and any portion of the $600 credit used for precription drugs will be treated as incurred medical expenses for purposes of Medicaid spenddown, and there will be no delay in the onset of Medicaid eligibility. CMS will issue guidance on how the Medicaid State agencies will calculate the applicant's level of drug spending to apply to "spenddown."

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How much will I save on my medicines if I join a Medicare-approved drug discount card?
For a small or no enrollment fee, you can get a Medicare-approved drug discount card and save on covered brand-name drugs. You can save even more with generic drugs. You may have to pay an annual enrollment fee of no more than $30 to the drug card sponsor.

No matter when you join, the enrollment fee is the same. You can choose to join any time until December 31, 2005, when this program ends.

Some people with low income can get up to a $600 credit from Medicare to go along with this card.

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When does Medicare begin paying for my prescription drug costs?
All people with Medicare will be able to enroll in plans that cover prescription drugs. Plans might vary, but in general, this is how they will work:

• You will choose a prescription drug plan and pay a premium of about $35 a month.
• You will pay the first $250 (called a "deductible").
• Medicare will pay 75% of drug costs between $250 and $2,250 in drug spending. You will pay only 25% of these costs.
• You will pay 100% of drug costs above $2,250 until you reach $3,600 in out-of-pocket spending.
• Medicare will pay about 95% of the costs after you have spent $3,600.

Some prescription drug plans may have additional options to help you pay the out-of pocket costs.

Extra help will be available for people with low incomes and limited assets. Most significantly, people with Medicare in the greatest need, who have incomes below a certain limit won't have to pay the premiums or deductible for prescription drugs. The income limits will be set in 2005. If you qualify, you will only pay a small co-payment for each prescription you need.

Other people with low incomes and limited assets will get help paying the premiums and deductible. The amount they pay for each prescription will be limited.

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My income is very limited. It will be hard for me to pay the premiums and deductible under the new Medicare prescription drug benefit. Is there any extra help for me?
Extra help will be available for people with low incomes and limited assets. Most significantly, people with Medicare in the greatest need, who have incomes below a certain limit won't have to pay the premiums or deductible for prescription drugs. These income limits will be set in 2005. If you qualify, you will only pay a small co-payment for each prescription you need. Other people with low incomes and limited assets will get help paying the premiums and deductible.

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What is Medicare Advantage and how does it work with Medicare + Choice plans?
Medicare Advantage is the new name for Medicare + Choice plans. Medicare Advantage rules and payments are improved to give you more health plan choices. In 2006, Medicare Advantage plan choices will be expanded to include regional preferred provider organization plans (PPOs). Regional PPOs will help ensure that all people with Medicare have multiple choices for Medicare health coverage. PPOs can help you save money by choosing from doctors and providers on a plan's “preferred” list, but usually don't require you to get a referral.

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I have a Medigap plan that covers prescription drugs. Can I keep that plan and also choose Medicare's prescription drug coverage?
If you have a Medigap policy by December 31, 2005 that also covers prescription drugs (plans H, I, or J);
You can keep that policy with the drug coverage, if you don't enroll in Medicare's Prescription Drug Benefit that begins in 2006. If you choose to enroll in a Medicare Prescription Drug Benefit plan, you can keep your current Medigap policy but the drug coverage will be removed from the policy or, for a limited time, you can buy a different Medigap policy that does not cover drugs. You can contact your Medigap insurer to find out more about your options.

If you do not have a Medigap plan H, I, or J by December 31, 2005;
Starting January 1, 2006, there will be a change in Medigap policies that cover prescription drugs. Medigap Plans H, I, and J may still be sold, but without the prescription drug benefit.

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What types of services are covered under Medicare?
Listed below is general information on what is covered under Medicare Parts A and B. We have also included links to publications which contain detailed information on specific types of care (for example, prevention services and hospice care). You may also want to visit the Your Medicare Coverage section of the web site for expanded information regarding your current Medicare Part A and Part B coverage under the Original Medicare Plan.

Medicare Part A
Medicare Part A (Hospital Insurance) helps cover your inpatient care in hospitals, critical access hospitals, and skilled nursing facilities. It also covers hospice care and some home health care. You must meet certain conditions.

Medicare Part A Helps Cover Your:
Hospital Stays: Semiprivate room, meals, general nursing, and other hospital services and supplies. This includes care you get in critical access hospitals and inpatient mental health care. This does not include private duty nursing, or a television or telephone in your room. It also does not include a private room, unless medically necessary. Read Medicare and Your Mental Health Benefits for more information on inpatient mental health benefits.

Skilled Nursing Facility Care: Semiprivate room, meals, skilled nursing and rehabilitative services, and other services and supplies (after a related 3-day hospital stay).

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Who is eligible for Medicare?
Generally, Medicare is available for people age 65 or older, younger people with disabilities and people with End Stage Renal Disease (permanent kidney failure requiring dialysis or transplant). Medicare has two parts, Part A (Hospital Insurance) and Part B (Medicare Insurance). You are eligible for premium-free Part A if you are age 65 or older and you or your spouse worked and paid Medicare taxes for at least 10 years. You can get Part A at age 65 without having to pay premiums if:

• You are receiving retirement benefits from Social Security or the Railroad Retirement Board.
• You are eligible to receive Social Security or Railroad benefits but you have not yet filed for them.
• You or your spouse had Medicare-covered government employment.

If you (or your spouse) did not pay Medicare taxes while you worked, and you are age 65 or older and a citizen or permanent resident of the United States, you may be able to buy Part A. If you are under age 65, you can get Part A without having to pay premiums if:

• You have been entitled to Social Security or Railroad Retirement Board disability benefits for 24 months. ( Note : If you have Lou Gehrig's disease, your Medicare benefits begin the first month you get disability benefits.)
• You are a kidney dialysis or kidney transplant patient.

While most people do not have to pay a premium for Part A, everyone must pay for Part B if they want it. The monthly Part B premium in 2005 is $78.20. This monthly premium is deducted from your Social Security, Railroad Retirement, or Civil Service Retirement check. If you do not get any of these payments, Medicare sends you a bill for your Part B premium every 3 months.
If you have questions about your eligibility for Medicare Part A or Part B, or if you want to apply for Medicare, call the Social Security Administration or visit their web site . The toll-free telephone number is: 1-800-772-1213. The TTY-TDD number for the hearing impaired is 1-800-325-0778. You can also get information about buying Part A as well as Part B if you do not qualify for premium-free Part A. See also FAQ on How to enroll in Medicare.

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Can I delay Medicare Part B enrollment without paying higher premiums?
Yes. In certain cases, you can delay your Medicare Part B enrollment without having to pay higher premiums. If you didn't take Medicare Part B when you were first eligible because you or your spouse were working and had group health plan coverage through your or your spouse's employer or union, you can sign up for Medicare Part B during a Special Enrollment Period. You can sign up:

• Anytime you are still covered by the employer or union group health plan through your or your spouse's current or active employment, or
• During the 8 months following the month the employer or union group health plan coverage ends, or when the employment ends (whichever is first).

If you are disabled and working (or you have coverage from a working family member), the Special Enrollment Period rules also apply.

Effective date if you sign up during a Special Enrollment Period
If you enroll in Medicare Part B while covered by the group health plan or during the first full month after coverage ends, your Medicare Part B coverage starts on the first day of the month you enroll. You also can delay the start date for Medicare Part B coverage until the first day of any of the following 3 months.

If you enroll during any of the 7 remaining months of the Special Enrollment Period, your Medicare Part B coverage begins the month after you enroll.

Remember: If you do not enroll in Medicare Part B during your Special Enrollment Period, you'll have to wait until the next General Enrollment Period, which is January 1 through March 31 of each year. You may then have to pay a higher Medicare Part B premium because you could have had Medicare Part B and did not take it. Call the Social Security Administration at 1-800-772-1213 for more information or to enroll in Medicare.

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Important information you need to know regarding Medicare prescription drug and supply claims.
If you get Medicare covered prescription drugs, durable medical equipment, or supplies; make sure your pharmacy or supplier (Durable Medical Equipment, Prosthetics, Orthotics, and Supplies – DMEPOS supplier) is enrolled in the Medicare Program. If you go to a DMEPOS supplier that is not enrolled in the Medicare Program, you are responsible for paying the entire bill for any drugs or supplies.

For Medicare covered supplies, in addition to finding out if the DMEPOS supplier is enrolled in the Medicare Program, you should also find out if they are participating.

• If they are enrolled and participating, they must accept assignment. This means they must accept the Medicare-approved amount as payment in full. You should only pay your 20% co-pay (and any remaining Medicare Part B deductible) when you get your supplies.
• If they are enrolled but not participating, they do not have to accept assignment. This means that charges may be higher, and you may pay more. You may also have to pay the entire charge at the time of service, and wait for Medicare to send you its share of the charge.

Please note that all Medicare enrolled pharmacies and suppliers must submit claims for glucose monitor test strips. You cannot submit claims for glucose test strips to Medicare directly.

For Medicare covered drugs and biologicals, it does not matter if your pharmacy is participating with Medicare. Under current law, all Medicare enrolled pharmacies must accept assignment for Medicare covered drugs and biologicals. If you purchase these items from a Medicare-enrolled pharmacy or supplier, you should only pay your 20% co-pay (and any remaining Medicare Part B deductible) when you get your prescriptions or supplies. Medicare will pay the remaining 80% directly to the pharmacy or supplier after they submit the claim.

If you get Medicare covered prescription drugs, durable medical equipment, or supplies; make sure your pharmacy or supplier (Durable Medical Equipment, Prosthetics, Orthotics, and Supplies – DMEPOS supplier) is enrolled in the Medicare Program. If you go to a DMEPOS supplier that is not enrolled in the Medicare Program, you are responsible for paying the entire bill for any drugs or supplies.

For Medicare covered supplies, in addition to finding out if the DMEPOS supplier is enrolled in the Medicare Program, you should also find out if they are participating.

• If they are enrolled and participating, they must accept assignment. This means they must accept the Medicare-approved amount as payment in full. You should only pay your 20% co-pay (and any remaining Medicare Part B deductible) when you get your supplies.
• If they are enrolled but not participating, they do not have to accept assignment. This means that charges may be higher, and you may pay more. You may also have to pay the entire charge at the time of service, and wait for Medicare to send you its share of the charge.

Please note that all Medicare enrolled pharmacies and suppliers must submit claims for glucose monitor test strips. You cannot submit claims for glucose test strips to Medicare directly.

For Medicare covered drugs and biologicals, it does not matter if your pharmacy is participating with Medicare. Under current law, all Medicare enrolled pharmacies must accept assignment for Medicare covered drugs and biologicals. If you purchase these items from a Medicare-enrolled pharmacy or supplier, you should only pay your 20% co-pay (and any remaining Medicare Part B deductible) when you get your prescriptions or supplies. Medicare will pay the remaining 80% directly to the pharmacy or supplier after they submit the claim.

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Consolidated Omnibus Budget Reconciliation Act (COBRA)
Throughout a career, workers will face multiple life events, job changes or even job losses. A law enacted in 1986 helps workers and their families keep their group health coverage during times of voluntary or involuntary job loss, reduction in the hours worked, transition between jobs and in certain other cases.

The law — the Consolidated Omnibus Budget Reconciliation Act (COBRA) — gives workers who lose their health benefits the right to choose to continue group health benefits provided by the plan under certain circumstances.

COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.

The law generally covers group health plans maintained by employers with 20 or more employees in the prior year. It applies to plans in the private sector and those sponsored by state and local governments. Provisions of COBRA covering state and local government plans are administered by the Department of Health and Human Services.

Several events that can cause workers and their family members to lose group health coverage may result in the right to COBRA coverage. These include:

• Voluntary or involuntary termination of the covered employee’s employment for reasons other than gross misconduct
• Reduced hours of work for the covered employee
• Covered employee becoming entitled to Medicare
• Divorce or legal separation of a covered employee
• Death of a covered employee
• Loss of status as a dependent child under plan rules

Under COBRA, the employee or family member may qualify to keep their group health plan benefits for a set period of time, depending on the reason for losing the health coverage. The following represents some basic information on periods of continuation coverage:
 

Qualified Beneficiary	Qualifying Event	Period of Coverage
Employee Spouse Dependent child	Termination Reduced hours	18 months *
Spouse Dependent child	Entitled to Medicare Divorce or legal separation Death of covered employee	36 months
Dependent child	Loss of dependent child status	36 months

*This 18-month period may be extended for all qualified beneficiaries if certain conditions are met in cases where a qualified beneficiary is determined to be disabled for purposes of COBRA.

However, COBRA also provides that your continuation coverage may be cut short in certain cases.

Notification Requirements
An initial notice must be furnished to covered employees and spouses, at the time coverage under the plan commences, informing them of their rights under COBRA and describing provisions of the law. COBRA information also is required to be contained in the plan’s summary plan description (SPD).

When the plan administrator is notified that a qualifying event has happened, it must in turn notify each qualified beneficiary of the right to choose continuation coverage.

COBRA allows at least 60 days from the date the election notice is provided to inform the plan administrator that the qualified beneficiary wants to elect continuation coverage.

Under COBRA, the covered employee or a family member has the responsibility to inform the plan administrator of a divorce, legal separation, disability or a child losing dependent status under the plan.

Employers have a responsibility to notify the plan administrator of the employee’s death, termination of employment or reduction in hours, or Medicare entitlement.

If covered individuals change their martial status, or their spouses have changed addresses, they should notify the plan administrator.

Premium Payments
Qualified individuals may be required to pay the entire premium for coverage up to 102% of the cost to the plan. Premiums may be higher for persons exercising the disability provisions of COBRA. Failure to make timely payments may result in loss of coverage.

Premiums may be increased by the plan; however, premiums generally must be set in advance of each 12-month premium cycle
Individuals subject to COBRA coverage may be responsible for paying all costs related to deductibles, and may be subject to catastrophic and other benefit limits.

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