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What is
the Medicare Drug Benefit? |
Medicare Part D Benefits
are the new new prescription drug benefits that become available January 2006.
The new benefits benefits were enacted as part of the Medicare Modernization Act
of 2003.
The new Prescription Drug
Benefits under Medicare Part D are voluntary,
meaning you have to sign up for them in order to get the benefit, either by
being enrolled in a Medicare Advantage HMO or PPO that offers the benefit, or by
signing up for the benefit through one of the new Medicare Prescription Drug
Plans being offered, which is provided separately and in addition to traditional
Medicare benefits.
Premium Costs
for the new Medicare Part D benefit depend upon how you sign up:
- If you are enrolled in a Medicare Advantage HMO or PPO that
offers the benefit, there is no separate premium you must pay, the benefits
are included in the total premium you pay (if any) to the Medicare
Advantage plan.
- If you a retiree receiving prescription benefits through
your employer's retiree plan and your employer arranges to provide the part
D benefits, the benefits are included in any premium contribution you pay to
your retiree plan
- If you sign up for the benefit through a
Medicare Prescription Drug Plan in addition to your traditional Medicare
plan, there is a specific additional monthly premium you must pay. The
specific amounts are available with your Prescription Drug Plan enrollment
information.
- If you qualify for low income assistance, some
or all of your Part D premium and in some cases even cost sharing, will be
paid for by Medicare. This includes Medicare beneficiaries with Medicaid
prescription drug coverage.
The Medicare Part D
Benefit provisions include:
- An up-front annual deductible of $250 in 2006.
This amount will go up in future years
- 75% of drug costs are then covered, up to the
Initial Coverage Limit, with beneficiaries responsible for 25% coinsurance
costs
- An annual Initial Coverage Limit of $2,250 in
2006. This amount will go up in future years. No drug benefits are paid for
your drug costs that fall between the Initial Coverage Limit and the
Catastrophic Threshold. This means you pay 100% of your drug costs after you
meet the Initial Coverage Limit until your total annual costs reach the
Catastrophic Threshold.
- A annual Catastrophic Threshold of $5,100
total drug costs in 2006. This amount will go up in future years. If
you reach the Catastrophic Threshold in 2006 your out of pocket drug costs
would be $3,600 at that point.
- 95% of drug costs are then covered with
beneficiaries responsible for 5% coinsurance costs
- Certain beneficiaries qualifying for low
income assistance are not subject to all or some of the above costs sharing
requirements, and can have different, lower cost sharing requirements.
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