MEDICARE PART D Are We Ready? Are We Ready?

Medicare Part D Overview Medicare Part A and B covers individuals Age 65 and older Age 65 and older Those with a disability who have collected Social Security for a minimum of 2 years Those with a disability who have collected Social Security for a minimum of 2 years Those with kidney failure or who need a kidney transplant Those with kidney failure or who need a kidney transplant 42 Million Medicare beneficiaries growing

Medicare Part D Overview On 1/1/06, Medicare Part D – the largest Medicare reform in 40 years began On 1/1/06, Medicare Part D – the largest Medicare reform in 40 years began Medicare Part D is a voluntary Insurance program for prescription drugs through Medicare prescription drug plans and other health plan options. Medicare Part D is a voluntary Insurance program for prescription drugs through Medicare prescription drug plans and other health plan options. Insurance companies and other private companies will work with Medicare to provide a choice of plans that cover both brand name and generic drugs. Insurance companies and other private companies will work with Medicare to provide a choice of plans that cover both brand name and generic drugs.

Medicare Part D Overview Part D Drug Coverage Part D Drug Coverage Includes prescription drugs, biological products, certain vaccines, insulin, and diabetic medical supplies Includes prescription drugs, biological products, certain vaccines, insulin, and diabetic medical supplies Excludes, among other categories, OTC drugs, barbiturates, benzodiazepines, weight loss or weight gain meds, meds for relief of cough, and any drug covered by Medicare Part A or B Excludes, among other categories, OTC drugs, barbiturates, benzodiazepines, weight loss or weight gain meds, meds for relief of cough, and any drug covered by Medicare Part A or B

Medicare Part D Overview Part d is a voluntary program except for low income dual-eligible formerly on Medicaid Medicare eligible persons may remain on their current Medicare eligible persons may remain on their current employer sponsored retiree Rx plans, participate in a employer sponsored retiree Rx plans, participate in a MA-PD plan or PDP plan, be auto-enrolled in a dual- MA-PD plan or PDP plan, be auto-enrolled in a dual- eligible plan, or not participate in any plan. eligible plan, or not participate in any plan. Beginning 1/1/06, the current Medicaid Rx coverage for dual-eligible will change to federally managed Medicare Part D Rx

Medicare Part D Overview Dual-Eligibles (Medicare and Medicaid) Dual-eligibles (eligible for Medicare and Medicaid) are covered. An estimated 60% of Medicaid prescriptions come from persons that are also eligible for Medicare Dual-eligibles (eligible for Medicare and Medicaid) are covered. An estimated 60% of Medicaid prescriptions come from persons that are also eligible for Medicare - At or below 135% of poverty level - At or below 135% of poverty level Will be randomly auto-enrolled into one of the national plans that meets the benchmark pricing within a given area Will be randomly auto-enrolled into one of the national plans that meets the benchmark pricing within a given area - Plan may not meet their particular medication needs - Over 6 million dual eligibles have already been randomly auto-enrolled into a Part D plan Medicaid prescription coverage will end beginning January 1, 2006 unless the drug is in a non-covered drug category Medicaid prescription coverage will end beginning January 1, 2006 unless the drug is in a non-covered drug category

Medicare Part D Overview Dual-Eligible (Medicare and Medicaid) No monthly premiums No monthly premiums No deductible No deductible Low or no co-payments (may be higher than current Medicaid program)Low or no co-payments (may be higher than current Medicaid program) Possible differences in drug coverage and co-payments than current Medicaid plan Possible differences in drug coverage and co-payments than current Medicaid plan Wrap around state public assistance programs (SPAPs) benefits or state Medicaid may apply to non-covered categories Wrap around state public assistance programs (SPAPs) benefits or state Medicaid may apply to non-covered categories Can switch plans monthly into another available Part D plan - during the first year Can switch plans monthly into another available Part D plan - during the first year

Medicare Part D Overview Non-Dual eligible (Medicare Only) Non-Dual eligible (Medicare Only) Voluntary enrollment Nov 15, 2005 thru May 15, 2006 (1% per month premium penalty for enrollment after 5/15/06) Voluntary enrollment Nov 15, 2005 thru May 15, 2006 (1% per month premium penalty for enrollment after 5/15/06) Non-dual eligible must take action to enroll… many choices between available Part D plans and plan designs Non-dual eligible must take action to enroll… many choices between available Part D plans and plan designs Some low income will qualify for extra assistance Some low income will qualify for extra assistance

Medicare Part D Overview Non-Dual eligible (Medicare Only) Non-Dual eligible (Medicare Only) Monthly premiums Monthly premiums Deductible Deductible Co-payments Co-payments Can only switch plans once a year into another available Part D plan Can only switch plans once a year into another available Part D plan

Medicare Part D Overview Ability to Change Plans Ability to Change Plans Non-dual-eligibles will have the opportunity to change between plans only once a year.Non-dual-eligibles will have the opportunity to change between plans only once a year. Dual-eligibles will have the opportunity to change between plans once a month, starting in November 2005.Dual-eligibles will have the opportunity to change between plans once a month, starting in November 2005.

Medicare Part D Overview Standard Benefit Standard Benefit Monthly premiums from participants will be paid for most plansMonthly premiums from participants will be paid for most plans - (Average premium is around $32.30 per month) $250 beneficiary deductible $250 beneficiary deductible For non-dual eligibles, Medicare will pay 75% of For non-dual eligibles, Medicare will pay 75% of drug costs up to $2,250. The beneficiary will pay drug costs up to $2,250. The beneficiary will pay 25% of these costs 25% of these costs Beneficiary will pay 100% of drug costs between Beneficiary will pay 100% of drug costs between $2,250 and $5,100 $2,250 and $5,100 After $3,600 in out-of-pocket spending, Medicare After $3,600 in out-of-pocket spending, Medicare will pay approximately 95% will pay approximately 95%

Medicare Part D Overview Drug Costs Patient Pays Payment up to Cumulative payment Up to $ %$250$250 $250 - $2,250 25%$500$750 $2,251 - $ %$2,850$3,600 More than $5,100 5%$3,600 $36,00 plus 5% of additional costs

Medicare Part D Overview

Medicare Part D Overview Standard Benefit (dual eligibles & non-dual eligibles co-payments) Income Test Asset Test Premium/Deductibl e Co-payment Under 100% of Federal Poverty Level (FPL) $6,000 individual $9,000 couple $0/$0 $1 generic/ $3 brand to Gap $0 after Gap 100% - 135% of FPL $6,000 individual $9,000 couple $0/$0 $2 generic/ $5 brand to Gap $0 after Gap 135% - 150% of FPL $10,000 individual $20,000 couple Sliding scale premium/$50 15% of Part D costs from $50 - $3,600/$2 for generic/ $5 brand after Gap

Medicare Part D Beneficiary Enrollment Beneficiary Enrollment

Medicare Part D General Enrollment Medicare Part D is an insurance product Medicare Part D is an insurance product Pharmacists and pharmacy staff members may not enroll Pharmacists and pharmacy staff members may not enroll participants in any plan but may offer information and advice to participants in any plan but may offer information and advice to participants participants In pharmacies choosing to endorse a particular plan, there might In pharmacies choosing to endorse a particular plan, there might be opportunities for insurance brokers to enroll participants within be opportunities for insurance brokers to enroll participants within their pharmacies or clinics. their pharmacies or clinics. Endorsement also requires agreement to promote the plan, Endorsement also requires agreement to promote the plan, provide enrollment information, explain the benefits of enrollment, provide enrollment information, explain the benefits of enrollment, describe the rules that apply to enrollees, explain how services describe the rules that apply to enrollees, explain how services are covered, communicate with individuals on operational policies, are covered, communicate with individuals on operational policies, rules and procedures, provide marketing and informational rules and procedures, provide marketing and informational materials to participants materials to participants

Medicare Part D General Enrollment Voluntary enrollment Voluntary enrollment Non-dual eligibles will have an opportunity to enroll in one of a number of PDP or MA-PD Medicare Part D plans in their area beginning November 15, 2006 Non-dual eligibles will have an opportunity to enroll in one of a number of PDP or MA-PD Medicare Part D plans in their area beginning November 15, 2006 Non-dual eligibles have financial penalties (1% per month after May 15, 2005) for late enrollment Non-dual eligibles have financial penalties (1% per month after May 15, 2005) for late enrollment Non-dual eligible participants are only able to change from the plan in which they participate, once a year Non-dual eligible participants are only able to change from the plan in which they participate, once a year Must consider the plan’s formulary coverage of the medications they are taking, the deductible, the co- payment structure, and the monthly premium before selecting a plan in their area. Must consider the plan’s formulary coverage of the medications they are taking, the deductible, the co- payment structure, and the monthly premium before selecting a plan in their area.

Medicare Part D Auto-Enrollment Limited to only the dual-eligibles Limited to only the dual-eligibles Randomly assigned to selected prescription plans within their local areas Plans selected to participate in auto-enrollment process were at or less than benchmark in the Medicare Part D bid process May change plans monthly or Plan coverage begins January 1, 2006

Medicare Part D Prescription Drug Plans (PDP) There are 10 approved nationwide PDPs There are 10 approved nationwide PDPs Aetna Life Insurance Company Aetna Life Insurance Company Connecticut General Life Insurance Company Connecticut General Life Insurance Company Coventry Health & Life Insurance/First Health Life & Health Insurance/ Cambridge Life Insurance Coventry Health & Life Insurance/First Health Life & Health Insurance/ Cambridge Life Insurance Medco Containment Life Insurance Company Medco Containment Life Insurance Company MemberHealth, Inc MemberHealth, Inc Pacificare Life and Health Insurance Company Pacificare Life and Health Insurance Company Silverscript Insurance Company Silverscript Insurance Company Wellpoint Wellpoint United Health Care Insurance Company United Health Care Insurance Company Wellcare Health Plans Wellcare Health Plans

Medicare Part D There are hundreds of regional, state, and county PDP and MA-PD plans in addition to thousands of employer sponsored equivalent plans - A list of the regional PDP and MA-PD plans designated to - A list of the regional PDP and MA-PD plans designated to receive auto-enrollees within each state is available on the receive auto-enrollees within each state is available on the on the web site. on the web site.

Medicare Part D So some of the questions are: “What if I don’t take any prescription drugs?” “How do I chose a Medicare Part D plan that meets my needs?” needs?” “How do I enroll?” “What happens to my Medicare-approved drug discount card when I enroll and can I still use any credits left on the card when I enroll and can I still use any credits left on the card?” card?”

Medicare Part D “What if I don’t take any prescription drugs?” Even if you don’t use any or a lot of prescription drugs Even if you don’t use any or a lot of prescription drugs now, you should still consider joining a Medicare now, you should still consider joining a Medicare prescription drug plan. As we age, most people need prescription drug plan. As we age, most people need prescription drugs to stay healthy. For most people, prescription drugs to stay healthy. For most people, joining as soon as possible means you will pay the lowest joining as soon as possible means you will pay the lowest monthly premium. monthly premium.

Medicare Part D “How do I chose a Medicare Part D plan that meets my needs?” This is not an easy question to answer, because it involves determining the plans available, what medications their plans have on the formulary, costs, what pharmacy contracts with them, etc. Later we will look at a website and show you how to select a plan.

Medicare Part D “How do I enroll?” Paper applications through the drug plan On the Plan’s web site MEDICARE ( ) TTY

Medicare Part D “What happens to my Medicare-approved drug discount card when I enroll and can I still use any credits left on the card?” You can use your Medicare-approved drug discount card until May 15, 2006 or until you join a Medicare Prescription Drug Plan, whichever is first.

Medicare Part D For Additional Details and Information on Medicare, please refer to the following web sites: Centers for Medicare and Medicaid (CMS) website: OR for Medicare and Medicaid (CMS) website: OR Official US Government Medicare website US Government Medicare website NACDS website: website: Kaiser foundation website on Medicare: foundation website on Medicare: US Department of Health and Human Services website Department of Health and Human Services website Office of Pharmacy Affairs: of Pharmacy Affairs:

Medicare Part D Most helpful web site: MyMedicareMatters

Medicare Part D Remember Pharmacy benefit coverage begins in all states on January 1, 2006

Medicare Part D “Questions?”