Medicare Information

So you have heard about the new Medicare Prescription Drug Plan, called Medicare Part D, and now you need more information. The information contained on this page will help jump start your knowledge on this new plan so that you can make an informed decision on how to proceed.

When and who is eligible

Anyone currently enrolled in Medicare Part A and/or Part B.

How the Part D Plan Works

With the new Medicare Part D coverage, you will have:

An annual deductible of $250
A monthly premium of $37 (this amount may vary in private plans)
A co-insurance (the term for the percentage of the drugs cost you will pay) equal to 25% of drug costs up to $2,250 a year.

The Coverage Gap (No Coverage - AKA "donut hole")

Once your total drug cost is $2,250 (the amount you pay plus the amount the plan pays), you will have to pay the full price for your drugs until you spend $3,600 out of your own pocket (not including your monthly premium).

This means that if you do not have any other drug insurance, you will pay approximately $5,100 out of your own pocket each year (this price includes your deductible, monthly premiums, your co-insurance and the money you spend after you reach $2,250 in drug costs).

Catastrophic Coverage

Once you spend more than $3,600, you will be eligible for what is called catastrophic drug coverage and will pay only 5% of prescription fees, or a $2 co-pay for generic drugs (whichever cost more). You will also have $5 co-pay for brand name drugs.

If you are now enrolled in a prescription drug plan that offers drug coverage equal to a Medicare Prescription Drug plan, you have what is called "creditable coverage." If you have creditable coverage, you will be charged a late enrollment penalty if you move to a Medicare Prescription Drug plan after the initial enrollment period.

FREQUENTLY ASKED QUESTIONS - Part D

I have NO prescription coverage now, how do I enroll in Medicare Part D?

Unless you are just turning 65 and are still in the Initial Enrollment period, you will have to wait until the Annual Enrollment Period which is from November 15th to December 31st.

Presently I am under a Medicare Advantage plan (Part C). What changes can I expect with the new Medicare Part D Prescription plan?

Medicare Part C is being restructured to Medicare Advantage (MA) Plans. Medicare Advantage Plans are made available through private health care companies. Medicare Advantage Plans may be a HMO (Health Maintenance Organization), POS (Point of Service) plan, PFFS (Private Fee-For-Service) plan or PPO (Preferred Provider

Organization). Each MA will offer varied benefits, depending on the plan you select. If you choose a MA that does not offer prescription drug coverage, you may participate in the Medicare Part D program.

I have prescription coverage through my employer -sponsored retirement plan. Do I need to enroll in Medicare Part D?

This decision will have to be made once your former employer decides whether or not they are going to maintain coverage for retirees. Companies have the option to either maintain their current drug benefits, or to reduce or eliminate prescription drug coverage for Medicare-eligible beneficiaries.

Will I be penalized for not enrolling in Part D?

If the beneficiary enrolling in Part D does not have credible drug coverage (defined as at least as good as Part D), then they will be penalized for not enrolling. Penalties take the form of increased monthly premium charges. Rates will be determined by the length of your delayed enrollment. If the enrollee does have credible coverage, he/she will be able to enroll in Part D at a later date with no penalty.