The Family Firm

Medicare Prescription Drug Plan Changes

1. There will be several Medicare approved plans available to you and you will be receiving information about them in the mail in October. Please keep this information.

   
   
2. If you are already on a plan which provides prescription drug coverage you will receive a letter from that plan in October or November informing you whether your drug coverage under that plan is AT LEAST AS GOOD AS standard Medicare prescription drug coverage. This is a key letter. Save it.

   
   
3. Unless you are already on a plan which has informed you in writing that you have coverage at least as good as the standard Medicare drug coverage, you have until May 15, 2006 to enroll in one of the Medicare approved plans. If you enroll after the deadline, you will have to pay a penalty in the form of higher premiums.

   
   
4. Starting on October 13, the Medicare website (www.medicare.gov) will have a calculator which will allow you to compare the plans available to you. In order to make the comparison, you will need to have a list of prescription drugs you take handy, so you can compare the coverage for these drugs between the various plans.

Medicare Prescription Drug Plan Coverage and Costs

There will be several Medicare approved plans available to you and each one will be slightly different in both cost and coverage. See below.

Premium
The average monthly premium will be $32. The actual premium will depend on which plan you choose.

Coverage
Each plan will have a deductible no higher than $250. After you have paid the deductible, the plan will cover 75% of the next $2,000 of your drug costs (your out of pocket will be $500). At this point there is a coverage gap, referred to in the press as the “donut hole”. There is no coverage for your next $2,850 in expenses. After the gap, the coverage resumes and pays 95% of your remaining prescription drug costs until the end of the calendar year. Approximate maximum annual costs to you: $3,600 ($250 plus $500 plus $2,850) plus 5% of amounts paid over $3,600, plus premiums. Caution: Only drugs which are covered by your plan will count towards the $3,600!

Comparison
To compare the plans available to you, you will need to review for each one: Premiums Co-payments Drugs covered Prices charged for drugs Pharmacies used You will start receiving mail from Medicare approved private companies that will offer drug plans for your area in mid October. Starting on October 13, you can compare the plans on line at www.medicare.gov.

Enrollment Period
The enrollment period is 11/15/05 through 5/15/06. Entering the plan after May 15, 2006 may result in a higher premium costs (see below). If you join by 12/31/2005, your coverage will begin 1/1/2006.

Before November 14, your current provider of medical coverage is required to notify you whether your drug coverage under that plan is AT LEAST AS GOOD AS standard Medicare prescription drug coverage. This is a key letter. Save it. If your coverage is NOT as good as the Medicare prescription drug plan and you do not convert to the Medicare plan before May 15, 2006, you are likely to pay higher premiums when you do enter the Medicare prescription drug plan. The penalty is 1% per month that you were not in the Medicare plan.

If your current coverage is AT LEAST AS GOOD AS the Medicare prescription drug plan, and you voluntarily or involuntarily need to convert to the Medicare plan at a later date, you should not be subject to the penalty.

Identity Fraud
You are likely to be receiving calls from plan providers soliciting your interest in the new Medicare drug plan. In NO case will a legitimate provider ask for (or ask you to verify) your Social Security number. Do not provide confidential information.