Medicare Drug Benefit: What You Need to Know

Medicare Rights Center

Each drug plan will have its own list of covered drugs (called a formulary). You will have to pay the full cost of drugs not on the formulary and a percentage of the cost of covered drugs. You must also fill your prescription at a pharmacy in your plan’s network.

You will pay a monthly premium, annual deductible and coinsurance, all of which may vary by plan. After you spend a maximum amount out of pocket ($3,600 in 2006), you will only have to pay five percent of the cost of each covered prescription you fill. If your income is low, you can get extra help paying for these costs (see reverse).

No, but unless you have drug coverage that is at least as good as Medicare’s (your current drug plan will let you know) you need to enroll between November 15, 2005 and May 15, 2006 to avoid a premium penalty for late enrollment.

If you do not have drug coverage, you should consider enrolling in the Medicare drug benefit.Like all insurance, the new drug benefit may cost more than you save at first, but it will protect you if your drug costs suddenly go up a lot.

That will depend on your current coverage. Some drug insurance plans (like retiree plans and State Pharmaceutical Assistance Programs), will supplement your Medicare drug coverage. Call the company that provides your current drug coverage to find out how it will work with the Medicare drug benefit.

You can visit www.medicare.gov or call 800-MEDICARE (633-4227).

Get Extra Help Paying for Drugs If Your Income Is Low

Will I get help paying for my Medicare drug benefit if my income is low?

You may qualify for extra help with your Medicare drug costs, if your 2005 income is below $14,355 ($19,245 for couples) and your resources are less than $11,500 ($23,000 for couples).

How do I get extra help paying for my Medicare drug costs?

• If you have Medicaid or a Medicare Savings Program (MSP), or you receive Supplemental Security Income (SSI), you automatically qualify for help—you do not have to apply.
• If you do not have Medicaid, an MSP or SSI, you should apply for help through the Social Security Administration (SSA) using the agency’s print or online application (www.ssa.gov). You should receive an application in the mail between May and August 2005.
• When you submit your application through SSA, you can simply state that your income and assets qualify you; you will not have to provide proof.

You then have to choose a Medicare drug plan through which to get your drug coverage.

What if I have drug coverage through Medicaid?

You will lose your Medicaid drug coverage on December 31, 2005 and get your drug coverage through Medicare as of January 1, 2006. You will still keep your other Medicaid benefits. You will automatically get extra help paying for your Medicare drug costs, but you should enroll in the Medicare drug plan that best meets your needs or you will be automatically enrolled in a randomly selected plan.

What if I have coverage through my state’s pharmaceutical assistance program?

If you are enrolled in your state’s pharmaceutical assistance program, call your program to find out how it will work with the Medicare drug benefit. Some states will continue to offer coverage as they always have; others will help you fill gaps in your Medicare drug coverage.