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New Medicare Drug Plans Include Surprise Options,
Benefits, Lower Cost: New Release
CMS issues coverage options available in each state
for seniors
Sept. 30, 2005 – Health and Human Services,
bubbling with enthusiasm at the coverage insurance companies are
designing for senior citizens in Medicare, in particular the new
prescription drug coverage, issued a news release today highlighting the
additional benefits and lower costs to be offered. Medicare, at the same
time, issued the options available in each state (see chart below). The bad news it just
presents more options for senior citizens, many who are already confused.
“All people with Medicare will have a range of
choices to enable them to get prescription drug coverage that reflects
their preferences, including options with low premiums and options
offering more coverage than Medicare’s standard drug benefit,” the
Centers for Medicare & Medicaid Services (CMS) said in the release.
“Medicare drug coverage is coming with lower costs
and better coverage options than many people expected, and there will be
help available locally and nationally to assist people in making a
decision,” HHS Secretary Mike Leavitt said.
“Everyone in Medicare, no matter what their income
or how they get their health care, can choose coverage that reflects
what they want, including lower cost, more complete coverage and
convenient access,” said CMS Administrator Mark B. McClellan, M.D.,
Ph.D.
For example:,
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>
For people who want to get their coverage in
traditional Medicare, the lower cost choice could be a stand-alone plan
with a low premium and low prices for a beneficiary’s drugs.
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>
The more complete coverage choice could be a drug
plan that offers coverage for generic drugs and in some cases even
brand-name drugs through the “coverage gap” in the standard Medicare
benefit, a plan with no deductible, and a plan that covers almost all of
the commonly used drugs.
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>
And for convenient access, a beneficiary can choose
a plan that provides coverage through their own preferred pharmacies.
In every state, Medicare beneficiaries will have
options that include coverage in the standard benefit’s “coverage gap.”
In every state, beneficiaries will have access to
options with deductible below the standard $250.
All states except Alaska have options with premiums
below $20 a month, and many states have options with premiums for
significantly less than that.
Also to simplify coverage, many plans have flat
co-pays or “tiers” of drug payments.
For example, a plan might offer generic drugs for
one rate, preferred brand name drugs for slightly more and most other
brand name drugs for a somewhat higher charge.
Beneficiaries have options that permit even more
savings with additional coverage in Medicare Advantage plans, which are
available in every state but Alaska and Vermont.
In 2006, 70 percent of beneficiaries across the
country will have access to a Medicare Advantage plan where the total
monthly premium, not including the Part B premium, is zero.
This kind of plan would get a beneficiary
Medicare’s medical and hospital coverage, drug coverage and additional
benefits beyond Medicare’s standard health benefits.
In all but nine states (Connecticut, Idaho, Iowa,
Maine, Nebraska, New Hampshire, North Carolina, North Dakota and South
Dakota), beneficiaries will have the option to select a Medicare
Advantage plan with at least some coverage through the Medicare drug
benefit’s coverage gap.
Medicare Advantage plans, which enable people to
get their Medicare through health plans such as HMOs and PPOs, offer
drug coverage on top of a package of health benefits that generally
exceed Medicare’s benefits. In the traditional Medicare program,
beneficiaries would have to pay premiums for Part B, Part D, and a
Medigap plan to fill in some of the gaps in Medicare coverage. Including
Medigap, these premium costs can easily amount to several hundred
dollars per month. Beneficiaries in Medicare Advantage now save an
average of about $100 in out-of-pocket costs compared to traditional
Medicare.
The stand-alone prescription drug coverage and the
Medicare Advantage coverage include many plans with very broad
formularies. Next month, Medicare will provide specific information on
the formularies and the costs of drugs in the formularies.
All approved prescription drug plans and Medicare
Advantage plans meet Medicare’s requirements for providing access to
medically necessary drugs, including formulary standards, as well as
standards for access to convenient retail pharmacies and to drugs in
nursing homes. The plans are required to provide coverage at least as
good as Medicare’s standard coverage, which pays on average 75 percent
of drug costs after a $250 deductible up to $2,250 in total drug
spending. The coverage also pays approximately 95 percent after $3,600
in out-of-pocket costs to protect against very high drug expenses. This
means that for a monthly premium that is lower than expected, Medicare
would pay more than half of a typical beneficiary’s drug costs, or more
than $1,100 a year. Medicare beneficiaries will have access to plans
that cover much more than the standard benefit, as noted above.
Enrollment for Medicare’s prescription drug
coverage runs from November 15 through May 15, 2006. Coverage begins on
January 1 if a beneficiary enrolls before then. After that, coverage
begins on the first of the month after a beneficiary enrolls.
Medicare will provide comprehensive support to help
beneficiaries make a confident decision about drug coverage. That
support includes community-based resources offering personalized
counseling, materials on
www.medicare.gov and through 1-800-MEDICARE, and the Medicare & You
handbook with information about coverage in the local area.
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