11/8/051 Medicare Prescription Drug Benefits Employee Workshop November 2005

11/8/052 Purpose of This Workshop To help you help someone else To give you an overview To help get you started To give you some resources NOTE: We are not the experts!

11/8/053 What is Medicare? Different than Medicaid (low income) Health insurance program for  People age 65 and older  People under age 65 with certain disabilities, and  People of all ages with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant) Part A – Hospitalization Insurance Part B – Medical Insurance Part C – Medicare+Choice (Medicare Advantage) Part D NEW – Prescription Drug Coverage

11/8/054 Medicare Premiums Part A  No monthly premium, part of FICA tax Part B  deducted from Social Security check  $88.50 per month for 2006 Part D  ~$32 per month for 2006  Will vary if enroll in private plan

11/8/055 Medicare if 65+ Year Old is Covered by Active Employee Plan Part A begins even if working and is secondary (employer coverage pays first) Part B enrollment can be delayed with no late sign up penalty Part D enrollment can be delayed with no late sign up penalty if coverage is considered “creditable” – at least as good as Medicare  Employer must send a notice by November 15, 2005

11/8/056 Medicare Part D: What is it? Currently, Medicare does not cover most outpatient prescription drugs Medicare Modernization Act of 2003 adds this coverage as of January 1, 2006 Centers for Medicare and Medicaid Services (CMS) in charge of Part D Part D coverage is voluntary coverage Most enrollees will pay a premium  Exception for lower income people  Penalty for late enrollment (1% per month), if not enrolled in a plan that is at least equivalent, on average, to Part D

11/8/057 Medicare Part D: Standard Plan Design Premium: You pay a monthly premium in addition to your Medicare Part B premium – the estimated average monthly premium is $32 Deductible: You pay the first $250 in drug costs before the plan begins to pay Coinsurance: You pay 25% of your drug costs from $250 to $2,250; Medicare will pay 75% 100% Self-Pay Portion, called “The Donut Hole”: You pay 100% of your drug costs from $2,250 to $5,100 Catastrophic Coverage: After your total drug costs reach $5,100 and you have paid $3,600 in out-of-pocket costs, you pay only 5% of any costs above $5,100 for the rest of the year; Medicare will pay the other 95%

11/8/058 Medicare Part D: Standard Plan Design 50% of Costs Paid by Insurer ($2,113) 25% Co-Insurance Paid by Retiree ($500) Beneficiary Pays Next $2,850 in Rx Spending Initial Coverage Limit $2,250 $250 Deductible paid by Retiree Plan Paid 75% Paid by Plan ($1,500) Beneficiary Paid Catastrophic Coverage Plan Pays 95% of Costs 2006 Estimated Average Monthly Premium $32 The infamous “donut hole” 100% Paid by Retiree Stop-Loss - Member reaches $3,600 in True Out-of-Pocket costs 5% Cost-Sharing (or $2/$5 Copays) Above Stop-Loss Graphic by Preferred Care

11/8/059 When Can Someone Join? Between November 15, 2005 and May 15, 2006 If join by December 31, 2005, coverage will begin January 1, 2006 Otherwise, coverage will be effective the first of the month after the month person joins

11/8/0510 Medicare Part D: Private Plans Many private companies will offer prescription drug coverage that qualifies under Medicare Part D. The companies will likely charge you a premium for this coverage. According to CMS, there will be private drug plans in every region (21 in NYS). Some private plans will offer  premiums below $30 per month  plans with no deductibles, or deductibles lower than Medicare’s standard $250 deductible  plans with coverage that exceeds Medicare’s standard design in other ways

11/8/0511 Medicare Part D: Low Income Benefits Category 1: you have both Medicare and full Medicaid coverage your annual income is below $9,570 if you’re single your annual income is below $12,830 if you are a married couple Monthly Premium$0 Annual Deductible$0 CoinsuranceNot applicable Generic drug cost$1 copay Brand drug cost$3 copay Cost if you’re in a nursing home $0 Cost once drug expenses reach $3,600 in a year $0

11/8/0512 Medicare Part D: Low Income Benefits Category 2: you do not qualify for Category 1 you have Medicare your annual income is below $12,920 ($17,321 for a married couple) your assets are below $7,500 ($12,000 for a married couple) Monthly Premium$0 Annual Deductible$0 CoinsuranceNot applicable Generic drug cost$2 copay Brand drug cost$5 copay Cost if you’re in a nursing home $0 Cost once drug expenses reach $3,600 in a year $0

11/8/0513 Medicare Part D: Low Income Benefits Category 3 : you do not qualify for Category 1 or 2 you have Medicare your annual income is below $12,920 ($17,321 for a married couple) your assets are below $11,500 ($23,000 for a married couple) Monthly Premium$0 Annual Deductible$50 Coinsurance15% between $50 and $3,600 Generic drug cost after $3,600 $2 Brand drug cost after $3,600 $5

11/8/0514 Medicare Part D: Low Income Benefits Category 4 : you do not qualify for Category 1, 2 or 3 you have Medicare your annual income is below $14,355 ($19,245 for a married couple) your assets are below $11,500 ($23,000 for a married couple) Monthly PremiumSliding Scale Annual Deductible$50 Coinsurance15% between $50 and $3,600 Generic drug cost after $3,600 $2 Brand drug cost after $3,600 $5

11/8/0515 Prescription Drug Choices Keep employer-provided or union-provided coverage, if available Elect coverage under Medicare Part D standard benefits through CMS Elect coverage under Medicare Part D low income benefits if qualified  Apply through Social Security Administration Elect coverage under a private plan that qualifies under Medicare Part D Keep EPIC as secondary coverage if qualified (NYS only)

11/8/0516 Medicare Part D: Your next steps If person has coverage from a former employer or union, find out what their Rx benefit will be for 2006  Will coverage be continued?  Will coverage be changed?  Is coverage creditable? (notice to be sent by November 15)  What is the type of medical coverage (Medicare HMO or Medicare Advantage plan – see warnings on later slide) Determine whether you fit any of Medicare’s low income categories Learn which private plan choices are available Verify that the plan you want covers the drugs you take Determine whether there is a specific pharmacy network Compare expected out-of-pocket costs under each available option

11/8/0517 Medicare Part D: Your next steps (cont’d) If you have Power of Attorney (POA)  You can enroll person in a Medicare prescription drug plan  You can fill out application to get extra help (low income) on his/her behalf as well  You do not have access to private health information. You would need the person to complete a HIPAA form (authorizing the release of private health information to you); obtain from insurance carrier Enroll between Nov. 15 and May 15 for 2006, if appropriate

11/8/0518 What do RIT retirees need to know? RIT will continue to offer RIT Rx in 2006  Copays increasing to our standard plan design: $10/$25/$40 for generic/formulary/non-formulary drugs RIT Rx is at least as generous as Medicare Part D  No late enrollment penalty for Part D later RIT retirees do not need to take any action RIT retirees in Preferred Care Gold or Medicare Blue Choice should definitely not enroll in a Medicare prescription drug plan FYI: RIT is applying to receive the employer subsidy available from Medicare Retiree enrollment: October 31-November 18  Retiree meetings being held

11/8/0519 Some Friendly Warnings! Medicare Advantage Plans (HMOs, like Preferred Care Gold and Medicare Blue Choice):  Must choose that plan’s Rx coverage (if any)  If they elect a standalone Medicare Rx plan, CMS will disenroll them from the Medicare Advantage plan, and they will have only Medicare Parts A&B for medical coverage for 2006! Watch out for fraud/scams:  No one trying to enroll you in a plan can come to your door uninvited  No one can ask you to enroll before Nov. 15 th  No one can ask you for personal information during marketing activities  Never give out personal information until you are certain the person or product is approved by Medicare  If you have questions or concerns, call MEDICARE

11/8/0520 For More Information Read the Medicare & You 2006 handbook mailed to Medicare eligibles in October (includes plans in the person’s region) Contact Medicare  Select Search Tools to get personalized information Select Frequently Asked Questions to get answers to common questions  Call MEDICARE ( )/v and /TTY To apply for the low income benefit, contact the Social Security Administration at /v or /TTY; information about the low income benefit is available on the SSA website: Call the State Health Insurance Assistance Program for face to face assistance; New York State number is (800)  go to or contact Medicare to find the phone # for other stateswww.shiptalk.org Contact AARP   Call OUR-AARP ( ) Look for local Medicare-related events

11/8/0521 Your Questions?? NOTE: We are still not the experts!