Aging America’s need for better health care choices and benefits recently brought about changes to the Medicare system. Federal statistics estimate that by the year 2020, there will be over 62 million Medicare beneficiaries with expenditures increasing from $284 billion to $898 billion. The need for Medicare to provide supplemental coverage resulted in Congress voting on a reform bill. The new Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA) was enacted on December 8, 2003, and provides several improvements to Medicare:

> Prescription discount cards in 2004-2005

> More preventive benefits in 2005

> Improved managed care plans

> Prescription drug coverage in 2006

DRUG DISCOUNT CARD

The “Medicare Prescription Drug Discount Card and Transitional Assistance Program” is part of the overall legislation passed by Congress. During 2004-2005, the discount card program will provide Medicare beneficiaries with some immediate relief from the high cost of prescription drugs. This is a temporary program created to provide assistance until the Medicare drug benefit is implemented in 2006.

Eligibility & Enrollment

Eligible individuals are beneficiaries who are enrolled in Medicare Part A or Part B. This includes people under 65 and on Medicare due to a disability.

- Enrollment fee is up to $30 per year.

- You will receive 10-15% savings on total drug spending with discounts of up to 25% or more on individual prescriptions.

- Enrollment may not begin until May 3, 2004 with assistance available in June 2004.

- Some individuals may be eligible to receive an annual $600 benefit (please see Transitional Assistance section).

- Enrollees must not be receiving drug coverage through Medicaid (including 1115 waivers).

- Seasonal or frequent travelers, make sure your choice will cover you in more than one state.

Choices and Coverage

Consumers may join one discount program each year, with at least two card choices available in each state. If needed, you may choose a different card for 2005 during the Annual Election Period (Nov. 15 – Dec. 31, 2004) or during a Special Election Period (change in residence or nursing home, enroll or disenroll in a managed care plan).

- Nearly all prescription drugs will be covered

including ones most commonly used.

- Syringes, needles, alcohol and gauze supplies associated with insulin are included.

- You may also receive discounts on OTC (over- the-counter) non-prescription drugs.

Transitional Assistance

You may qualify for an annual $600 credit if you are single and your annual income is no more than $12,569, or no more than $16,862 for a couple (based on 135% of the Federal Poverty Level – FPL). This credit is known as Transitional Assistance.

> The $600 may be applied on your discount

card to help pay for co-pays, etc.

> The federal government will cover your annual enrollment fee ($30).

> A 5% co-insurance may be applied with consumers at or below 100% of the FPL, and 10% for those above 100% of the FPL.

> If you keep the same discount card and some of your $600 credit is left at the end of 2004, the credit can roll-over into 2005. You do not need to reapply for the $600 credit in 2005.

> If you apply for the $600 credit for the first time in 2005, it must be in the beginning of the year to receive the full $600. If you apply later, the credit is as follows:

If you join between	You will get
January 1 – March 31, 2005	$ 600
April 1 – June 30, 2005	$ 450
July 1 – September 30, 2005	$ 300
October 1 – December 31, 2005	$ 150

> To qualify for the $600 credit you must not be receiving drug coverage through Medicaid, TRICARE, VA Benefits, FEHBP, group or health insurance.

CARD SPONSORS

Discount card sponsors must qualify and meet Medicare approval standards. They must:

> Meet service area and pharmacy network access standards.

> Provide negotiated prices on prescriptions.

> Manage the eligibility and enrollment and administer the $600 transitional assistance.

> Provide a 1-800 number for customer service and provide a grievance process.

> If a sponsor uses a formulary, they must offer at least 1 selection in each of 209 classes of drugs. At least 55% of the 209 categories must include a generic offered for a discount. If your drug is not on their list, the $600 credit may be used to purchase the drug.

> Sponsors may offer a mail order option, but may not require enrollees to use it.

MEDICARE SUPPLEMENTAL INSURANCE

Medicare consumers with a Medigap policy may also enroll in the discount card program. Your Medigap coverage will not change as the discount card and your policy will work together. (Note: If you are currently in Plans H, I or J, you are still eligible for the discount card, which will supplement the drug benefit of those plans.)

MANAGED CARE PLANS

Managed Care Plans (Medicare Part C) may offer “exclusive" card programs (April 1, 2004) to their own plan members. In wrapping the Medicare discount card around the plan’s drug benefit, the plan may apply the $600 credit to additional drugs that either are not covered under the plan’s benefit, apply it towards co-pays and deductibles, or for drugs when the plan’s benefit cap is reached. (Medicare+Choice plans are now referred to as Medicare Advantage.)

POSSIBLE FRAUD SCAMS

Please be aware of schemes where individuals are taking advantage of Medicare beneficiaries through phone calls or door-to-door contacts offering to enroll seniors in exchange for their social security/credit card number or banking information. Some scammers already have the individual’s private health history and try to get banking or Medicare information to file false claims. Medicare always contacts its beneficiaries by mail only. If you have an encounter that you think may be fraudulent, please call the Medicare Fraud Hotline at 1-800-447-8477.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

OTHER INFORMATION RESOURCES

1-800 MEDICARE (1-800-633-4227)

Medicare Discount Drug Card Website: www.medicare.gov/maddc/home.asp

SHINE (Serving Health Insurance Needs of Elders) 1-800-963-5337