This document provides information about Medicare prescription drug coverage beginning in 2006. It summarizes key details in 3 sentences or less: Medicare prescription drug coverage will be available through private drug plans starting in 2006, with standard coverage costing about $32 per month and covering most drug costs after an initial $250 deductible and $3,600 out-of-pocket limit. Extra help is available for those with low incomes and resources to reduce their costs to as little as no premiums or deductibles and small copayments. The document reviews options for joining a drug plan and ways coverage may vary between plans.

1. IMPORTANT INFORMATION FOR SENIOR CITIZENS Maranatha Community Development Corporation

2. Module 1: Overview

3. Medicare Prescription Drug Coverage Begins January 1, 2006 Available for all people with Medicare Part A, Part B, or both For minimum standard coverage in 2006, enrollees would pay Monthly premium of about $32 First $250 per year for prescriptions (“deductible”) Part of the cost of prescriptions after $250 5% of the drug costs (or small copayment) after paying $3,600 out-of-pocket

4. Savings in 2006 On average , for a person with Medicare and no drug coverage now Total drug spending will go down by about 50% Over $1,100 per year saved People with other drug coverage that, on average, is at least as good as the minimum standard Medicare prescription drug coverage also may save money These estimates do not include the extra help for people with limited incomes and resources

5. Protections for People with Medicare Customer service Pharmacy access Medication therapy management Generic drug information Privacy Uniform benefits and premiums Formulary Protections

6. Module 2: Extra Help for People with Limited Incomes and Resources

7. Extra Help With Drug Costs Available for many people with limited income and resources Those below Federal poverty level save over 95% on average People with lowest income and resources Pay no premiums or deductibles Have small or no copayments Those with slightly higher income and resources Have a reduced deductible Pay a little more out-of-pocket

8. Eligibility for Extra Help Income Below 150% Federal poverty level $1,197 per month for an individual* or $1,604 per month for a married couple* Based on family size Resources Up to $11,500 (individual) Up to $23,000 (married couple living together) Includes $1,500/person funeral or burial expenses Counts savings and stocks Does not count home the person lives in 2005 amounts

9. Automatic Eligibility for Extra Help Some people may automatically qualify People with Medicare who Get full Medicaid benefits Get Supplemental Security Income (SSI) Get help from Medicaid paying their Medicare premiums All others must apply

10. How to Apply For Extra Help Social Security Administration (SSA) is mailing applications to those who may be eligible Throughout the summer of 2005 Those who think they may qualify should Complete this application Mail it to the address on the back of the application Use the enclosed postage-paid envelope Use original forms only (do not photocopy) People who are not sure should still apply www.socialsecurity.gov can help people decide

11. Module 3: Types of Plans/Coverage

12. Ways to Get Coverage Medicare prescription drug coverage is provided through Medicare Prescription Drug Plans Medicare Advantage and other Medicare Health Plans Coverage is NOT automatic People need to understand their options

13. Joining a Plan Join directly with the plan sponsor Can get help joining Legal representative Spouse, other relative, friend, or advocate Initial Enrollment Period 7-month period For people entitled to Medicare on February 1, 2006, or later November 15, 2005 through May 15, 2006 For people entitled to Medicare before February 2006

14. Late Enrollment Most people will have to pay a penalty if they wait to join Premium will go up 1% per month for every month the person was eligible but did not join The person will have to pay this penalty as long as they have a Medicare Prescription Drug Plan Unless they have other prescription drug coverage that is, on average, at least as good as the minimum standard Medicare prescription drug coverage

15. Coverage on Average at Least as Good as the Minimum Standard Medicare Drug Coverage People with other coverage Will receive information from the other plan Will not pay a penalty if they wait to join If coverage is, on average, at least as good as Medicare prescription drug coverage Possible examples Some Employer Group Health Plans (EGHP) State Pharmacy Assistance Program (SPAP) Veteran Affairs (VA) coverage Military retiree coverage including TRICARE

16. What if a patient has prescription drug coverage from… A Medigap (Medicare Supplement Insurance) policy? An employer or union?

17. Original Medicare And Medigap With Drug Coverage People who have a Medigap prescription drug policy will receive important information in the mail this fall from their Medigap insurance company on how the new Medicare prescription drug coverage will affect their Medigap prescription drug coverage Choices to make Keep prescription coverage through the Medigap policy Join a Medicare Prescription Drug Plan after they Modify the Medigap policy to remove drug coverage, or Change to a Medigap policy with no drug coverage Drop Medigap policy and join a Medicare Advantage Plan or other Medicare Health Plan with prescription drug coverage

18. Employer/Union Coverage Medicare is working with employers to help people with Medicare keep their current prescription coverage Employer/Union options Offer coverage in place of Medicare prescription drug coverage and get a tax-free subsidy Offer or contract with a Medicare drug plan to provide prescription drug coverage Provide coverage that supplements the Medicare prescription drug coverage Pay all or part of Medicare drug plan premiums

19. Employer/Union Coverage People with Medicare and employer/union coverage will get important information in the mail this fall from their plan sponsor They should contact their benefits administrator before making any changes Choices to make Keep coverage offered by employer/union Join a Medicare Prescription Drug Plan Join a Medicare Advantage Plan or other Medicare Health Plan with prescription drug coverage NOTE: If a Medicare beneficiary drops or loses their employer/union coverage, they may not be able to get it back

20. Medicare and Medicaid These people automatically qualify for the extra help They should watch the mail this fall Letter about choosing a Medicare Prescription Drug Plan “ Medicare & You 2006” handbook Choices to make Compare prescription drug plan options and join in a plan If not, Medicare will enroll them in one by December 31, 2005 Starting January 1, 2006, Medicare will pay for their prescription drugs Can switch to another plan at any time

21. Other State/Federal Assistance Programs These people automatically qualify for the extra help if they Get help from Medicaid paying their Medicare premiums Get Medicare and Supplemental Security Income (SSI) benefits They should watch the mail for “Medicare & You 2006” handbook Choices to make Compare prescription drug plan options Find a plan that meets their needs If no choice made by May 15, 2006, will be enrolled on June 1, 2006 Also applies to people who applied and qualify for extra help

22. Module 4: Specific Drug Coverage

23. Medicare Prescription Drug Coverage Covers drugs available only by prescription Prescription drugs, biologicals, insulin Medical supplies associated with injection of insulin A prescription drug plan (PDP) or Medicare Advantage prescription drug (MA-PD) plan may not cover all drugs Brand name and generic drugs will be in each formulary

24. Medicare Prescription Drug Coverage Plans Must Cover Cancer medications HIV/AIDS treatments Antidepressants Antipsychotic medications Anticonvulsive treatments for epilepsy and other conditions Immunosuppressants

25. Excluded Drugs Drugs for Anorexia, weight loss, or weight gain Fertility Cosmetic purposes or hair growth Symptomatic relief of cough and colds Prescription vitamins and mineral products Except prenatal vitamins and fluoride preparations Non-prescription drugs Barbiturates Benzodiazepines

26. Prescription drug plans (PDP) and Medicare Advantage prescription drug (MA-PD) plans may have a formulary CMS will ensure formularies do not discourage enrollment among certain groups of people Formulary review requirements are posted at www.cms.hhs.gov/pdps on the web CMS will approve formularies in advance for plans to complete their bid Formulary

27. Tier 1 is lowest cost sharing Subsequent tiers have higher cost sharing in ascending order CMS will review to identify drug categories that may discourage enrollment of certain people with Medicare by placing drugs in non-preferred tiers Plan must have exceptions procedures for tiered formularies Tiered F ormularies – Preferred Drug Levels

28. How Drug Plans Vary What prescription drugs are covered How much the individual needs to pay Which pharmacies are used Whether they offer more than the standard level of coverage For a higher monthly premium

29. Module 5: Individual Choice of a Prescription Drug Plan (PDP)

30. Annual Coordinated Election Period November 15 – December 31 every year Person who does not have a Medicare drug plan can join Person who currently has a Medicare drug plan can switch Change effective January 1

31. Things to Consider What is current health insurance coverage? Medicare and employer/union, including military retiree coverage (like TRICARE) Original Medicare Plan Medicare Advantage and other Medicare Health Plans Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Special Needs, Private Fee-For-Service Plan (PFFS) Medicare Cost Plans Medicare and Medicaid Is there currently prescription drug coverage? Even those with current prescription drug coverage should ask “ Is Medicare prescription drug coverage right for me?”

32. Medicaid prescription drug coverage for people with Medicare and Medicaid ends December 31, 2005 People with Medicare and Medicaid who do not join a plan by December 31, 2005 CMS will enroll them in a prescription drug plan with a premium covered by the extra help Their Medicare prescription drug coverage will begin January 1, 2006 People with Medicare and Medicaid have a Special Enrollment Period (SEP) Can change plans any time Auto-Enrollment ( can change plans any time )

33. Special Populations State Pharmacy Assistance Program participants People in long-term care facilities Residents of the U.S. territories

34. State Pharmacy Assistance Programs (SPAP) Provide wraparound coverage Provide same or better coverage and save money Reduce state costs or expand population served Costs incurred by SPAP may or may not be counted toward out-of-pocket limit

35. Long-Term Care Facilities Residents Obtain drug benefits from pharmacy chosen by the facility Can change plans at any time if they have both Medicare and full Medicaid benefits Will have convenient access Those persons who are dually eligible for Medicare and Medicaid have no deductibles and no copayments.

36. U.S. Territories Each territory has its own prescription drug plan region Each territory can develop its own extra help Help with premiums, coinsurance, copayments, deductibles or Provide supplemental coverage

37. For More Information See “Medicare & You 2006” handbook To be mailed October 2005 Read about prescription drug plans in the area For help in choosing a plan Visit www.medicare.gov on the web To get personalized information Visit www.shiptalk.org or call the local State Health Insurance Assistance Program (SHIP) For assistance with enrollment Call 1-800-MEDICARE (1-800-633-4227) TTY users call 1-877-486-2048 Attend local community events

38. Important Dates January 1, 2006 Medicare Prescription Drug Plan coverage begins for those enrolled May 15, 2006 Last day of Initial Enrollment Period June 1, 2006 Facilitated enrollment of people entitled to extra help who did not enroll by May 15, 2006

39. More Information for People with Medicare Websites www.medicare.gov www.cms.hhs.gov www.socialsecurity.gov Publications “ Medicare & You 2006” handbook “ Facts About Medicare Prescription Drug Plans” 1-800-MEDICARE (1-800-633-4227) TTY users should call 1-877-486-2048 Social Security Administration 1-800-772-1213 TTY users should call 1-800-325-0778

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