PPA 419 – Aging Services Administration Lecture 5c - Medicare Prescription Drug, Improvement, and Modernization Act of 2003

Prescription Drug Savings for Seniors For the first time in Medicare's history, a prescription drug benefit will be offered to all 40 million seniors and disabled Americans in Medicare to help them afford the cost of their medicines. For the first time in Medicare's history, a prescription drug benefit will be offered to all 40 million seniors and disabled Americans in Medicare to help them afford the cost of their medicines.

Prescription Drug Savings for Seniors Beginning in 2004, seniors could save % off the cost of most medicines through a Medicare-approved drug discount card. Seniors would be able to take the card to their local pharmacy and receive the discount. Since the typical senior spends $1,285 annually on his or her medicines, the card could save a senior who lacks drug coverage as much as $300 annually. The card would provide savings until the full drug benefit goes into effect. Beginning in 2004, seniors could save % off the cost of most medicines through a Medicare-approved drug discount card. Seniors would be able to take the card to their local pharmacy and receive the discount. Since the typical senior spends $1,285 annually on his or her medicines, the card could save a senior who lacks drug coverage as much as $300 annually. The card would provide savings until the full drug benefit goes into effect.

Prescription Drug Savings for Seniors Beginning in 2006, seniors without coverage would be able to join a Medicare- approved plan that would cut their yearly drug costs roughly in half, in exchange for a $35 monthly premium. In many cases, the savings will be even greater. Beginning in 2006, seniors without coverage would be able to join a Medicare- approved plan that would cut their yearly drug costs roughly in half, in exchange for a $35 monthly premium. In many cases, the savings will be even greater. Seniors with no drug coverage and monthly drug costs of $200 would save more than $1,700 on drug costs each year. Seniors with no drug coverage and monthly drug costs of $200 would save more than $1,700 on drug costs each year. Seniors with no drug coverage and monthly drug costs of $800 would save nearly $5,900 on drug costs each year. Seniors with no drug coverage and monthly drug costs of $800 would save nearly $5,900 on drug costs each year. Seniors would be protected again high out-of- pocket costs with Medicare covering 95% of drug costs over $3,600 per year. Seniors would be protected again high out-of- pocket costs with Medicare covering 95% of drug costs over $3,600 per year.

Prescription Drug Savings for Seniors Low-income seniors will receive additional help paying for their medicines. Low-income seniors will receive additional help paying for their medicines. A $600 annual subsidy would be added to their drug discount card. A $600 annual subsidy would be added to their drug discount card. There would be no additional premium, no deductible and low co-payments ($2 for generic or $5 for brand- name drugs) for seniors with limited savings and incomes at or below 135% of poverty (individuals with yearly incomes under $12,123 and senior couples under $16,362). There would be no additional premium, no deductible and low co-payments ($2 for generic or $5 for brand- name drugs) for seniors with limited savings and incomes at or below 135% of poverty (individuals with yearly incomes under $12,123 and senior couples under $16,362). There would be reduced premium, a $50 deductible, and 15% co-insurance (85% of their drug costs would be covered) for seniors with limited savings and incomes between 135% and 150% of the federal poverty level (individuals with yearly incomes under $13, 470 and senior couples under $18,180). There would be reduced premium, a $50 deductible, and 15% co-insurance (85% of their drug costs would be covered) for seniors with limited savings and incomes between 135% and 150% of the federal poverty level (individuals with yearly incomes under $13, 470 and senior couples under $18,180).

Prescription Drug Savings for Seniors All seniors will save from steps to bring safe, lower cost generic drugs to market sooner. The President took steps earlier this year to bring generic versions of drugs to market sooner, and this legislation will strengthen those efforts that are estimated to save American consumers about $35 billion over the next 10 years. All seniors will save from steps to bring safe, lower cost generic drugs to market sooner. The President took steps earlier this year to bring generic versions of drugs to market sooner, and this legislation will strengthen those efforts that are estimated to save American consumers about $35 billion over the next 10 years.

More Choices-Better Benefits- And the Choice to Stay with the Coverage You Have Today Seniors will have more choices in health care-including the same kinds of choices that members of Congress and other federal employees enjoy today. Seniors will be able to choose the health care plan that best fits their needs-instead of having that choice made by the government. Seniors will have more choices in health care-including the same kinds of choices that members of Congress and other federal employees enjoy today. Seniors will be able to choose the health care plan that best fits their needs-instead of having that choice made by the government.

More Choices-Better Benefits- And the Choice to Stay with the Coverage You Have Today Seniors can choose to stay in traditional Medicare and still get prescription drug coverage. Or, they can choose a new Medicare-approved private plan where the drug benefit is integrated into broader medical coverage, including disease management programs and protections against high out-of-pocket medical spending. Or, seniors who like the lower cost sharing and extra benefits often available in managed care plans would be able to make that choice as well. Seniors can choose to stay in traditional Medicare and still get prescription drug coverage. Or, they can choose a new Medicare-approved private plan where the drug benefit is integrated into broader medical coverage, including disease management programs and protections against high out-of-pocket medical spending. Or, seniors who like the lower cost sharing and extra benefits often available in managed care plans would be able to make that choice as well.

More Choices-Better Benefits- And the Choice to Stay with the Coverage You Have Today Under a modernized Medicare, there will be better coverage for preventive care (e.g., a "welcome to Medicare" physical that would include screening for cancer, diabetes, and heart disease, as well as immunizations against pneumonia and the flu). Under a modernized Medicare, there will be better coverage for preventive care (e.g., a "welcome to Medicare" physical that would include screening for cancer, diabetes, and heart disease, as well as immunizations against pneumonia and the flu). All Americans can benefit from provisions in the bill that will remove excessive restrictions on health savings accounts, which will give individuals more control over the costs of their health care and give them access to coverage that is affordable, flexible and portable. All Americans can benefit from provisions in the bill that will remove excessive restrictions on health savings accounts, which will give individuals more control over the costs of their health care and give them access to coverage that is affordable, flexible and portable.

Reforms to Strengthen and Modernize Medicare Private health plans will compete for seniors' business by providing better coverage at affordable prices-helping to control the costs of Medicare by using market-place competition, not government price-setting. Private health plans will compete for seniors' business by providing better coverage at affordable prices-helping to control the costs of Medicare by using market-place competition, not government price-setting. Private sector competition will result in more innovation and flexibility in coverage. This will be a significant improvement over the way benefits are provided in Medicare today -where politicians and bureaucrats, rather than health care markets, dictate what is covered and what is paid. Private sector competition will result in more innovation and flexibility in coverage. This will be a significant improvement over the way benefits are provided in Medicare today -where politicians and bureaucrats, rather than health care markets, dictate what is covered and what is paid.

Reforms to Strengthen and Modernize Medicare Private employers will receive incentives to continue to provide drug coverage to their retirees. Private employers will receive incentives to continue to provide drug coverage to their retirees. For the first time ever, the legislation will require the Medicare Trustees to analyze the combined fiscal status of the Medicare Trust Funds and warn Congress and the President when Medicare's general fund subsidy exceeds 45 percent. This new fiscal safeguard will put the program on a stronger financial foundation by alerting future congresses and Presidents when Medicare's dedicated revenues fall below adequate levels. For the first time ever, the legislation will require the Medicare Trustees to analyze the combined fiscal status of the Medicare Trust Funds and warn Congress and the President when Medicare's general fund subsidy exceeds 45 percent. This new fiscal safeguard will put the program on a stronger financial foundation by alerting future congresses and Presidents when Medicare's dedicated revenues fall below adequate levels.

Prescription Drug Plan What is Medicare prescription drug coverage? Medicare prescription drug coverage is insurance that covers both brand-name and generic prescription drugs at participating pharmacies in your area. Medicare prescription drug coverage provides protection for people who have very high drug costs or from unexpected prescription drug bills in the future. What is Medicare prescription drug coverage? Medicare prescription drug coverage is insurance that covers both brand-name and generic prescription drugs at participating pharmacies in your area. Medicare prescription drug coverage provides protection for people who have very high drug costs or from unexpected prescription drug bills in the future. Who can get Medicare prescription drug coverage? Everyone with Medicare is eligible for this coverage, regardless of income and resources, health status, or current prescription expenses. Who can get Medicare prescription drug coverage? Everyone with Medicare is eligible for this coverage, regardless of income and resources, health status, or current prescription expenses.

Prescription Drug Plan When can I get Medicare prescription drug coverage? You may sign up when you first become eligible for Medicare (three months before the month you turn age 65 until three months after you turn age 65). If you get Medicare due to a disability, you can join from three months before to three months after your 25th month of cash disability payments. If you don't sign up when you are first eligible, you may pay a penalty. If you didn't join when you were first eligible, your next opportunity to enroll will be from November 15, 2007 to December 31, When can I get Medicare prescription drug coverage? You may sign up when you first become eligible for Medicare (three months before the month you turn age 65 until three months after you turn age 65). If you get Medicare due to a disability, you can join from three months before to three months after your 25th month of cash disability payments. If you don't sign up when you are first eligible, you may pay a penalty. If you didn't join when you were first eligible, your next opportunity to enroll will be from November 15, 2007 to December 31, 2007.

Prescription Drug Plan How does Medicare prescription drug coverage work? Your decision about Medicare prescription drug coverage depends on the kind of health care coverage you have now. There are two ways to get Medicare prescription drug coverage. You can join a Medicare prescription drug plan or you can join a Medicare Advantage Plan or other Medicare Health Plan that offers drug coverage. How does Medicare prescription drug coverage work? Your decision about Medicare prescription drug coverage depends on the kind of health care coverage you have now. There are two ways to get Medicare prescription drug coverage. You can join a Medicare prescription drug plan or you can join a Medicare Advantage Plan or other Medicare Health Plan that offers drug coverage.

Prescription Drug Plan Whatever plan you choose, Medicare drug coverage will help you by covering brand- name and generic drugs at pharmacies that are convenient for you. Whatever plan you choose, Medicare drug coverage will help you by covering brand- name and generic drugs at pharmacies that are convenient for you.

Prescription Drug Plan Like other insurance, if you join, generally you will pay a monthly premium, which varies by plan, and a yearly deductible (between $0-$265 in 2007). You will also pay a part of the cost of your prescriptions, including a copayment or coinsurance. Costs will vary depending on which drug plan you choose. Some plans may offer more coverage and additional drugs for a higher monthly premium. If you have limited income and resources, and you qualify for extra help, you may not have to pay a premium or deductible. You can apply or get more information about the extra help by calling Social Security at (TTY ) or visiting Like other insurance, if you join, generally you will pay a monthly premium, which varies by plan, and a yearly deductible (between $0-$265 in 2007). You will also pay a part of the cost of your prescriptions, including a copayment or coinsurance. Costs will vary depending on which drug plan you choose. Some plans may offer more coverage and additional drugs for a higher monthly premium. If you have limited income and resources, and you qualify for extra help, you may not have to pay a premium or deductible. You can apply or get more information about the extra help by calling Social Security at (TTY ) or visiting

Prescription Drug Plan Why should I get Medicare prescription drug coverage? Medicare prescription drug coverage provides greater peace of mind by protecting you from unexpected drug expenses. Even if you don't use a lot of prescription drugs now, you should still consider joining. As we age, most people need prescription drugs to stay healthy. For most people, joining now means protection from unexpected prescription drug bills in the future. Why should I get Medicare prescription drug coverage? Medicare prescription drug coverage provides greater peace of mind by protecting you from unexpected drug expenses. Even if you don't use a lot of prescription drugs now, you should still consider joining. As we age, most people need prescription drugs to stay healthy. For most people, joining now means protection from unexpected prescription drug bills in the future.

Prescription Drug Plan What if I have a limited income and resources? There is extra help for people with limited income and resources. Almost 1 in 3 people with Medicare will qualify for extra help. If you qualify for extra help, Medicare will pay for almost all of your prescription drug costs. You can apply or get more information about the extra help by calling Social Security at (TTY ) or visiting What if I have a limited income and resources? There is extra help for people with limited income and resources. Almost 1 in 3 people with Medicare will qualify for extra help. If you qualify for extra help, Medicare will pay for almost all of your prescription drug costs. You can apply or get more information about the extra help by calling Social Security at (TTY ) or visiting

Prescription Drug Plan Prescription Drug Coverage: Things to Consider Prescription Drug Coverage: Things to Consider To get Medicare coverage for your prescription drugs, you must choose and join a Medicare drug plan. Regardless of how a Medicare drug plan decides to offer this coverage, there are some key factors that may vary. Some of these factors might be more important to you than others, depending on your situation and drug needs. These factors are: To get Medicare coverage for your prescription drugs, you must choose and join a Medicare drug plan. Regardless of how a Medicare drug plan decides to offer this coverage, there are some key factors that may vary. Some of these factors might be more important to you than others, depending on your situation and drug needs. These factors are: Cost Cost Cost Coverage Coverage Coverage Convenience Convenience Convenience Peace of mind now and in the future Peace of mind now and in the future Peace of mind now and in the future Peace of mind now and in the future

Prescription Drug Plan Cost Cost Premium This is the monthly cost you pay to join a Medicare drug plan. Premiums vary by plan. Premium This is the monthly cost you pay to join a Medicare drug plan. Premiums vary by plan. Deductible This is the amount you pay for your prescriptions before your plan starts to share in the costs. Deductibles vary by plans. No plan may have a deductible more than $265 in Some plans may not have any deductible. Deductible This is the amount you pay for your prescriptions before your plan starts to share in the costs. Deductibles vary by plans. No plan may have a deductible more than $265 in Some plans may not have any deductible. Copayment/Coinsurance This is the amount you pay for your prescriptions after you have paid the deductible. In some plans, you pay the same copayment (a set amount) or coinsurance (a percentage of the cost) for any prescription. In other plans, there might be different levels or "tiers," with different costs. (For example, you might have to pay less for generic drugs than brand names. Or, some brand names might have a lower copayment than other brand names.) Also, in some plans your share of the cost can increase when your prescription drug costs reach a certain limit. Copayment/Coinsurance This is the amount you pay for your prescriptions after you have paid the deductible. In some plans, you pay the same copayment (a set amount) or coinsurance (a percentage of the cost) for any prescription. In other plans, there might be different levels or "tiers," with different costs. (For example, you might have to pay less for generic drugs than brand names. Or, some brand names might have a lower copayment than other brand names.) Also, in some plans your share of the cost can increase when your prescription drug costs reach a certain limit.

Prescription Drug Plan Coverage Coverage Formulary A list of drugs that a Medicare drug plan covers is called a formulary. Formularies include generic drugs and brand-name drugs. Most prescription drugs used by people with Medicare will be on a plan's formulary. The formulary must include at least two drugs in categories and classes of most commonly prescribed drugs to people with Medicare. This makes sure that people with different medical conditions can get the treatment they need. Formulary A list of drugs that a Medicare drug plan covers is called a formulary. Formularies include generic drugs and brand-name drugs. Most prescription drugs used by people with Medicare will be on a plan's formulary. The formulary must include at least two drugs in categories and classes of most commonly prescribed drugs to people with Medicare. This makes sure that people with different medical conditions can get the treatment they need.

Prescription Drug Plan Coverage Coverage Prior Authorization Some drugs are more expensive than others even though some less expensive drugs work just as well. Other drugs may have more side effects, or have restrictions on how long they can be taken. To be sure certain drugs are used correctly and only when truly necessary, plans may require a "prior authorization." This means before the plan will cover these prescriptions, your doctor must first contact the plan and show there is a medically-necessary reason why you must use that particular drug for it to be covered. Plans might have other rules like this to ensure that your drug use is effective. Prior Authorization Some drugs are more expensive than others even though some less expensive drugs work just as well. Other drugs may have more side effects, or have restrictions on how long they can be taken. To be sure certain drugs are used correctly and only when truly necessary, plans may require a "prior authorization." This means before the plan will cover these prescriptions, your doctor must first contact the plan and show there is a medically-necessary reason why you must use that particular drug for it to be covered. Plans might have other rules like this to ensure that your drug use is effective.

Prescription Drug Plan Coverage Coverage Coverage Gap If you have high drug costs, you may consider which plans offer additional coverage until you spend $3,850 (in 2007) out-of-pocket. In some plans, if your costs reach an initial coverage limit, then you pay 100% of your prescription costs. This is called the coverage gap. This "gap" in coverage is generally above $2,400 (in 2007) in total drug costs until you spend $3,850 out-of-pocket. Some plans might offer some coverage during the gap. Even in plans where you pay 100% of covered drug costs after a certain limit, you would still pay less for your prescriptions than you would without this drug coverage. Coverage Gap If you have high drug costs, you may consider which plans offer additional coverage until you spend $3,850 (in 2007) out-of-pocket. In some plans, if your costs reach an initial coverage limit, then you pay 100% of your prescription costs. This is called the coverage gap. This "gap" in coverage is generally above $2,400 (in 2007) in total drug costs until you spend $3,850 out-of-pocket. Some plans might offer some coverage during the gap. Even in plans where you pay 100% of covered drug costs after a certain limit, you would still pay less for your prescriptions than you would without this drug coverage.

Prescription Drug Plan Convenience Convenience Drug plans must contract with pharmacies in your area. Check with the plan to make sure your pharmacy or a pharmacy in the plan is convenient to you. Also, some plans may offer a mail- order program that will allow you to have drugs sent directly to your home. You should consider all of your options in determining what is the most cost- effective and convenient way to have your prescriptions filled. Drug plans must contract with pharmacies in your area. Check with the plan to make sure your pharmacy or a pharmacy in the plan is convenient to you. Also, some plans may offer a mail- order program that will allow you to have drugs sent directly to your home. You should consider all of your options in determining what is the most cost- effective and convenient way to have your prescriptions filled.

Prescription Drug Plan Peace of Mind Now and in the Future Peace of Mind Now and in the Future Even if you don't take a lot of prescription drugs now, you still should consider joining a drug plan. As we age, most people need prescription drugs to stay healthy. For most people, joining now means you will pay a lower monthly premium in the future since you may have to pay a penalty if you choose to join later. You will have to pay this penalty as long as you have a Medicare drug plan. If you reach the point where you have spent $3,850 (in 2007) out-of-pocket for drug costs during the year, the plan will pay most of your remaining drug costs. This protection could start even sooner in some plans. Even if you don't take a lot of prescription drugs now, you still should consider joining a drug plan. As we age, most people need prescription drugs to stay healthy. For most people, joining now means you will pay a lower monthly premium in the future since you may have to pay a penalty if you choose to join later. You will have to pay this penalty as long as you have a Medicare drug plan. If you reach the point where you have spent $3,850 (in 2007) out-of-pocket for drug costs during the year, the plan will pay most of your remaining drug costs. This protection could start even sooner in some plans.

Medicare Prescription Drug Finder F/Public/Include/DataSection/Qu estions/MPDPFIntro.asp?versio n=default&browser=Firefox%7C 2%7CWinXP&language=English &defaultstatus=0&pagelist=Hom e&ViewType=Public&PDPYear= 2007&MAPDYear=2007&MPDP F%5FMPPF%5FIntegrate=N F/Public/Include/DataSection/Qu estions/MPDPFIntro.asp?versio n=default&browser=Firefox%7C 2%7CWinXP&language=English &defaultstatus=0&pagelist=Hom e&ViewType=Public&PDPYear= 2007&MAPDYear=2007&MPDP F%5FMPPF%5FIntegrate=N F/Public/Include/DataSection/Qu estions/MPDPFIntro.asp?versio n=default&browser=Firefox%7C 2%7CWinXP&language=English &defaultstatus=0&pagelist=Hom e&ViewType=Public&PDPYear= 2007&MAPDYear=2007&MPDP F%5FMPPF%5FIntegrate=N F/Public/Include/DataSection/Qu estions/MPDPFIntro.asp?versio n=default&browser=Firefox%7C 2%7CWinXP&language=English &defaultstatus=0&pagelist=Hom e&ViewType=Public&PDPYear= 2007&MAPDYear=2007&MPDP F%5FMPPF%5FIntegrate=N