FOR IMMEDIATE RELEASE
October 24 , 2005
MEDICARE RX EDUCATION NETWORK RELEASES
MOST FREQUENTLY ASKED QUESTIONS
Washington, DC – November 18 —
The Medicare Rx Education Network’s Frequently Asked
Medicare Prescription Drug Coverage Questions culls from queries coming into the network and
published in media reports to tap into what people want to know about the new benefit. The just released
Q and A is part of a pre-enrollment education drive of the consumer-oriented network and its
more than 70 national member organizations.
“We urge people to take their time and not feel rushed into making a decision about the benefit,”
advises Senator Breaux, chairman of the Medicare Rx Education Network. “Medicare beneficiaries
have time to ask questions and get information about this important decision. The answers to these
commonly asked questions will make it a little easier for them.”
Senator Breaux explained that the network is offering the frequently asked questions to help people
understand the prescription drug benefit and make a choice that fits their needs when the six-month
enrollment window begins November 15. The network arrived at the 12 questions by evaluating
records of phone calls and e-mails that the network received since its launch in July and by analyzing
media coverage that gauged public inquiries about the new coverage. Network member organizations
worked collectively to provide corresponding answers that were accurate and informative yet clear.
“Medicare beneficiaries should read through these questions, closely review all information they
receive through the mail about the Medicare drug benefit and, finally, turn to the many existing reliable
web, phone and community resources for further information,” notes Senator Breaux. Internet sites
provide further detail and serve as a
link to other helpful resources.
For personalized assistance with the benefit, contact a Medicare representative by calling 1-800-
MEDICARE (1-800-633-4227) or call Eldercare Locator (1-800-677-1116) and ask for the phone
number of the state’s health insurance program. Communities across the country are also holding
Medicare-related information events over the next month and the network urges people to check their
local newspapers for details.
MOST FREQUENTLY ASKED
MEDICARE PRESCRIPTION DRUG COVERAGE QUESTIONS
Q1) Who sponsors Medicare’s prescription drug benefit?
Medicare’s prescription drug benefit is sponsored by the federal government’s Centers for Medicare & Medicaid Services, which is the Medicare agency. The benefit will be administered through private
plans that are approved by Medicare and that must adhere to specific Medicare regulations and
Q2) Is the benefit voluntary?
Yes, the benefit is voluntary.
Q3) Will the benefit cover all of the prescriptions I need and will coverage include “lifestyle
The range of drugs each plan will cover will be comprehensive. Although the drugs covered may vary
from plan to plan, keep in mind that the law mandates Medicare cover at least two medicines in each
therapeutic category, and “all or substantially all” antidepressants, antipsychotics, anticonvulsants,
anticancer drugs, immunosuppressants and drugs that treat HIV/AIDS. The “standard” benefit does not
cover benzodiazepines (medicines to control anxiety and treat insomnia), or barbiturates. Although the
“standard” plan doesn’t cover benzodiazepines, a Medicare drug plan may choose to cover
benzodiazepines if it offers more than standard coverage. The “standard” benefit does cover products
that help smokers quit. The benefit covers both brand name and generic drugs. If you need a medically
necessary drug that is not covered by your plan, you can request an exception.
Q4) Are mail-order services available with the program?
Yes, some plans will offer mail-order service. Beneficiaries can opt to receive their medications by
Q5) What are the income requirements for eligibility?
There are no income requirements to join a Medicare drug plan. Anyone who is eligible for Medicare is
eligible for the prescription drug benefit. However, if you are a Medicare beneficiary with limited
income and resources (annual income of $14,355 or below for a single person, $19,245 or below for a
couple) and you want to apply to get extra help paying for the monthly premiums, deductibles and copayments,
there are income requirements for eligibility. (Complete the Application for Help with
Medicare Prescription Drug Plan Costs, Form SSA-1020. You can get one by calling Social Security at
Q6) How will the Medicare prescription drug coverage work with my existing health coverage on my
If you have prescription drug coverage through your employer or union, chances are you may want to
stick with that prescription coverage. Your employer or union retiree plan will be sending you a letter
between September and mid-November. It will explain if the retiree Rx coverage is comparable to, or
better than what Medicare is offering. If it turns out that your retiree plan’s drug coverage is not as
good as Medicare’s, you can join a Medicare prescription drug plan and you may still be able to keep
your employer or union coverage for its other healthcare benefits (find out about your options from
your benefits administrator). (Sign up for the Medicare drug plan by May 15, 2006, to avoid a lateenrollment
Q7) Can employers drop their prescription drug coverage because of Medicare’s new benefit?
Medicare created incentives for employers and unions to keep their retirees covered for prescription
drugs by providing these plans with 28 cents on the dollar for their drug costs. Employers are likely to
continue their prescription drug coverage. However, if your employer or union does stop offering
prescription drug coverage, you can join a Medicare drug plan and you may be able to keep your
retiree health plan for its other healthcare benefits (find out about your options from your benefits
administrator). (Join within 63 days after your employer or union plan’s prescription coverage ends to
avoid Medicare’s late-enrollment penalty).
Q8) How does Medicare’s drug coverage work with the Medicare-approved drug discount card?
The discount cards have always been temporary, intended to help until Medicare’s drug coverage
becomes effective. You can continue to use your Medicare-approved drug discount card until you join
a Medicare drug plan, or until May 15, 2006, whichever comes first:
(a) If you join a Medicare drug plan between November 15 and December 31, 2005, your Medicare
drug plan insurance coverage begins January 1, 2006. The last day to use your discount card is
December 31, 2005;
(b) If you join a Medicare drug plan between January 1, 2006, and May 15, 2006 (the last day of open
enrollment) your Medicare drug coverage begins the first of the month after you join.
For example, if you join in January, your coverage begins February 1, and the last day to use your
discount card is January 31. Join in February and your coverage begins March 1, so the last day to use
your discount card is February 28. Once you join a Medicare drug plan, you will be automatically
disenrolled from your Medicare drug discount card, so you do not need to notify your discount-card
company. If you decide decide not to join a Medicare drug plan, the last day you can use your discount card is
May 15, 2006.
Q9) What are the costs of the program, including the deductibles?
The “standard” benefit includes a monthly average premium of $32.20 a month, a deductible of $250,
and co-payments for each prescription. After the $250 deductible:
For the next $2,000, you pay 25 percent. Medicare pays 75 percent.
For the next $2,850, you pay 100 percent (this is the so-called “doughnut hole.”) *
For drug costs after that, you pay 5 percent. Medicare pays 95 percent.
Prescription drug coverage is costing less than originally expected. For example, some plans offer
monthly premiums of $20 or less. Some have deductibles lower than $250 or no deductible at all.
Q10) What is meant by the “doughnut hole?”
The “doughnut hole” is the gap in coverage in Medicare’s “standard” plan. (See the asterisk above.)
Some organizations are offering benefit plans that fill in the coverage gap (“doughnut hole”), either
entirely or partially.
Q11) Who keeps a tally of how much I spend with the benefit?
Your prescription drug plan (or Medicare managed care plan, if it includes prescription coverage) is
responsible for tracking and calculating your drug costs. From your perspective, most of the tracking
will occur automatically. However, you are obligated to let your plan know if you have any
supplemental coverage for prescription drug benefits, and if you have been reimbursed for anything
that you have paid out of pocket for prescription drugs. Your plan is responsible for coordinating
benefits with state pharmacy assistance programs and other insurers such as group health plans, the
Federal Employees Health Benefits Program and military coverage (including TRICARE).
Q12) Why is there a late penalty?
Like all health insurance, healthy individuals help pay for those who are sick. And when those who
are healthy get sick, they are covered in the same manner. You don’t know if you’re going to be one
of the sick individuals. But you could be. So, you want the advantage of group insurance to protect
you. The late penalty acts as an incentive for healthy seniors to sign up and, in this way, to ensure
the stability of the coverage. The initial open enrollment period is Nov. 15, 2005, to May 15, 2006. If
you enroll after May 15, 2006, you will pay a monthly penalty of one percent of the monthly
premium, and the penalty will continue over the life of your coverage.
The Medicare Rx Education Network provides information and assistance with outreach and enrollment for the new Medicare
Part D prescription drug benefit. The network, which includes 70 national organizations, is chaired by former U.S. Senator John
Breaux. Members share an interest in educating Medicare beneficiaries about the new Medicare prescription drug benefit and
will work closely with the appropriate federal agencies to obtain up-to-date information to ensure that information disseminated
by the network about Medicare Part D is factual and accurately conveyed, thereby equipping beneficiaries and their caregivers to
make informed choices. By sharing information with each other about member organizations’ independent efforts, collaborating
on activities, and identifying ways to work together, the network aims to eliminate duplication of efforts and maximize the
effectiveness of outreach efforts. The network does not engage in legislative activities or take positions on pending legislative or
administrative policies related to the Part D benefit and its implementation.