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Medicare Prescription Drug Coverage

Atlanta Regional Office

Centers for Medicare & Medicaid Services

September 12, 2005

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Basic Medicare Facts

For people 65 & older

People under 65 with certain disabilities

People with End-Stage Renal Disease

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Medicare Prescription Drug Coverage

Medicare will offer prescription drug coverage beginning on January 1, 2006.

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Protection for You

Medicare prescription drug coverage is important. It protects you from high out-of-pocket costs.

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Who is Eligible for Medicare Prescription Drug Coverage

Medicare prescription drug coverage is available to everyone who has Medicare Part A and/or Part B.

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If You Are Eligible for Medicare Prescription Drug Coverage

Eligible individuals may enroll in a:

– Medicare Prescription Drug Plan (PDP) or

– Medicare Advantage Prescription Drug Plan (MA-PD plan).

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If You Enroll in an Medicare Advantage Plan

Individuals enrolled in an Medicare Advantage (MA) plan must receive Medicare prescription drug coverage from the MA-PD plan.

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What You Need To Do

People with Medicare will need to decide how they want to get their prescription drug coverage.

Information about plans will be available October 2005.

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Enrollment Period

You can first enroll in a Medicare prescription drug plan from November 15, 2005 through May 15, 2006.

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Standard Medicare Prescription Drug Coverage Costs

Costs for a plan with standard Medicare prescription drug coverage might look like this:

$33.15 monthly premium

$250 deductible

25% coinsurance

100% between $2,250 and $5,100

5% coinsurance from $5,100 and up

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Out-of-Pocket Expenses

Out-of-pocket expenses include any deductibles and coinsurance that you pay.

Does not include the monthly premium.

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Covered Medicare Prescription Drugs

Plans cover brand-name and generic drugs.

Covered Medicare prescription drugs may be different with different plans.

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Persons with Limited Income and Resources

If the person with Medicare has limited income and resources, there is extra help for paying for co-payments, deductibles, monthly premiums, and coinsurance.

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Persons with Limited Income and Resources

Some people will be automatically eligible for the extra help.

They are considered “deemed”.

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Persons with Limited Income and Resources

Many people may have already received an application for the extra help from the Social Security Administration this summer.

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Drug Coverage from Another Source

If a person with Medicare already has drug coverage from another source, he or she needs to decide whether to continue the current coverage or change to a Medicare prescription drug plan.

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Drug Coverage from Another Source

People with Medicare who currently have prescription drug coverage will be notified by their current insurance plan if their current drug coverage is at least as good as Medicare prescription drug coverage.

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Drug Coverage from Another Source

If the drug coverage the person with Medicare currently has supplements Medicare prescription drug coverage, then he or she may want to enroll in a Medicare prescription drug plan.

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Drug Coverage from Another Source

If current coverage is not as good as Medicare prescription drug coverage, and the person with Medicare doesn’t enroll in a Medicare prescription drug plan, he or she may face a higher premium later.

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If Current Coverage from Another Source

is at least as good as Medicare prescription drug coverage, then decide whether to keep current coverage or enroll in Medicare plan.

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If Current Coverage from Another Source

is not as good as Medicare coverage or have no drug coverage, then need to enroll in a Medicare plan when first eligible, or pay a higher premium to enroll later.

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If Current Coverage from Another Source

supplements Medicare prescription drug coverage, then enroll in a Medicare plan for complete coverage at the lowest premium.

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Your Decision

Deciding whether or not to enroll in a Medicare prescription drug plan is an important decision.

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In Summary

Starting January 1, 2006, Medicare prescription drug coverage will help people with Medicare pay for the prescriptions they need.

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In Summary

Medicare prescription drug coverage is available to all people with Medicare.

There is additional help for those who need it most.

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In Summary

The Medicare prescription drug coverage pays for brand-name and generic drugs.

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In Summary

People with Medicare can choose between at least two Medicare prescription drug plans.

Choose a plan that is right for you.

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For More Information

http://www.cms.hhs.gov/medicarereform

http://www.medicare.gov

http://ssa.gov

1-800-669-8387 (Georgia Cares)

1-800-Medicare (1-800-633-4227)

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Questions

We will have a question and answer session at the conclusion of the State Health Benefit Plan presentation.

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THANK YOU

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State Health Benefit PlanRetiree Option Change Period

Retiree Option Change Period –

October 17 through November 8, 2005

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SHBP Plan ChangesEffective January 1, 2006

New PPO

HMO Live or Work Rule Removed

Dependent Verification Process Changes

New High Deductible Health Plan (HDHP)

New Medicare Policy

Coordination of Benefits with Medicare Part D

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New PPO

Effective January 1, 2006, SHBP will offer a new PPO Option and United Healthcare will be the administrator. See the Decision Guide for information about this change.

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HMO Live or Work Rule Removed

Live or work rule for HMOs no longer based on the county where you live.

– You may join an HMO if it is offered in your area or surrounding counties.

– Out-of-State Coverage: You may not have all options available.

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HMO Live or Work Rule Removed(Continued)

– Before making your selection… contact the HMO directly to see if services are available.

– You will not be allowed to change your HMO selection until the next Retiree Option Change Period.

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Dependent Verification Verify dependents prior to their benefit

expiration or they will not be eligible after the expiration date.

The student verification process will change. You will receive a request to recertify your student’s status 90 days prior to your dependent’s birth date. Coverage will end the last day of the month of your dependent’s birth month if SHBP does not receive the information.

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Dependent Verification(Continued)

i.e., John’s birthday is November 2, and he is a full-time student approved through November 30, 2005. To continue coverage past November 30, SHBP must receive a competed student status form and the annual certification from the school’s registrar’s office. If this information is not received by November 30, John will not be eligible for future coverage.

…As a retiree you cannot re-add your dependents… unless you experience a Qualifying Event.

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High Deductible Health Plan (HDHP)

Manage your healthcare dollars

Pay lower premiums

If eligible, contribute to a Health Savings Account

In return for the lower premiums and ability to contribute to a HSA,

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HDHP (Continued)

you will…

Have a higher deductible with benefits payable only after you meet the deductible (except for some preventive care coverage)

Pay coinsurance (a percentage of the cost of care) after you have satisfied the deductible, rather than set dollar co-payments.

Carry remaining HSA money to the following year.

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HDHP (Continued)

You can contribute to a Health Savings Account (HSA)– You will need to contact a bank or financial

organization to set up your HSA

– Retain dollars for eligible expenses

– Can earn interest/offer investment options

You will be responsible for selecting your HSA vendor, setting up your account, and making contributions.

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Georgia Law Requirement

Georgia State law requires that SHBP pay benefits after Medicare has paid.

Georgia Code 45-18-2

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SHBP New Medicare Policy Effective January 1, 2006

SHBP will calculate premiums and claims payment based upon Medicare enrollment for retirees over age 65 or those eligible for Medicare due to disability.

SHBP will coordinate benefits for members who are enrolled in Medicare.

SHBP will pay primary benefits on members not eligible or not enrolled in Medicare.

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SHBP New Medicare Policy Effective January 1, 2006

SHBP coordination will also begin for retirees who enroll in the Medicare Part D Prescription Drug Plan (PDP).

SHBP premiums will be adjusted for each part of Medicare for which the retiree is not enrolled.

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If You Are Eligible for Medicare Part D

You may enroll in a:

– Prescription Drug Plan (PDP) or

– If you are currently enrolled in Kaiser’s Medicare Advantage (Senior Advantage Plan), you will be automatically enrolled in Kaiser MA – PD.

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If You Are Eligible for Medicare Part D...(continued)

– If you select another PDP, coverage under the Kaiser Senior Advantage Plan ends and you will not be covered by SHBP. This will leave you with Medicare coverage only – Parts A, B and D.

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Prescription Drugs Covered by Medicare Part D

Medicare Part D covers prescription drugs based on the PDP’s formulary.

PDP and SHBP formularies may vary.

SHBP co-payments will be based on SHBP’s formulary.

SHBP will provide payment based on SHBP’s formulary for covered non-preferred drugs after a co-payment.

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SHBP Pharmacy Benefit – January 1, 2006

Your Current Co-pays Will Not Change!

PPO/Indemnity HMO

Generic $10 $10

Preferred $30 $25

Non-Pref. Brand $100 $50

Quantity Level Limits and Prior Authorizations will apply.

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HOW SHBP WILL COORDINATE

SHBP will pay secondary benefits (by wrapping around Medicare Part D).

Part D $250 deductible - you pay your co-pay and SHBP will pay it’s normal benefit.

$251-$2,250- Part D pays 75% and the remaining 25% will be shared between you (co-pay) and SHBP.

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HOW SHBP WILL COORDINATE (continued)

$2,251 - $5,100 – Part D pays $0 and you will pay your co-pay and SHBP will pay it’s normal benefit.

$5,101 up – Part D pays 95% and the remaining 5% will be shared between the member (co-pay) and SHBP, depending on the balance.

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What’s Next

You will receive:

Medicare drug information in October 2005.

SHBP Membership Worksheet in your Retiree Option Change packet by October 17, 2005.

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What You Need To Do

Review the information you received about the Medicare prescription drug plans and determine which plan best suits your needs.

If you elect to join a PDP, complete the information and return to the PDP.

DO NOT RETURN TO SHBP.

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What You Need To Do (continued)

If your Medicare information on your Personalized Change Form in your Retiree Option Change Packet is not correct, send a copy of your Medicare card to SHBP for any parts not listed.

You MUST mail to SHBP a copy of your Medicare Part D card as soon as you receive it, in order to pay the correct SHBP premium.

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What You Need To Do (continued)

Determine if you want to change your coverage option with SHBP and mail your election by November 8 to SHBP.

Please update your address with SHBP if you have recently moved.

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GENERAL INFORMATION

The State Health Benefit Plan does not have Medicare Prescription Drug information.

Questions should be directed to 1-800-Medicare(1-800-633-4227)

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Creditable Coverage Notice

Information about Creditable Coverage will be provided by SHBP in your Retiree Option Change Packet.

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Caution: Be very careful about giving out personal

information.

Do not give personal information over the phone without confirming that the person asking is who they say they are and they need to know that information specifically.

SHBP and Medicare both have most of your information on file.

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For More Information

www.cms.hhs.gov/medicarereform

www.medicare.gov

www.ssa.gov

1-800-669-8387 (Georgia Cares)

1-800-633-4227 (Medicare)

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Questions

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THANK YOU