Medicare Prescription Drug Coverage Retiree Town Hall.ppt by censhunay

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									Medicare Prescription Drug Coverage

Retiree Town Hall Presentation:
The Basics of Medicare

September 2005




 Oak Ridge Retiree Town Hall Meeting #1
Today’s Agenda


   What’s happening

   Why we’re here today

   What Medicare is and what’s changing

   How Medicare Prescription Drug Plans work

   How Medicare drug coverage affects Oak Ridge

   What you can expect in the coming months




    Oak Ridge Retiree Town Hall Meeting #1         1
What’s Happening


   Medicare Prescription Drug, Improvement, and Modernization Act of
    2003 — or the Medicare Modernization Act (MMA) — signed into law
    on December 8, 2003
   Most sweeping legislation affecting Medicare benefits since its
    inception in 1965
   Effective January 1, 2006, Medicare will provide optional prescription
    drug coverage called Medicare Part D
     It replaces prescription drug discount card, which will phase out by
      May 15, 2006
     Beginning November 15, anyone with Medicare is eligible to enroll
      for this coverage
     Legislation encourages employers to continue to be the primary
      provider of prescription drug benefits for their Medicare-eligible
      population


    Oak Ridge Retiree Town Hall Meeting #1                                   2
What’s Happening (cont.)


    The benefits of this legislation include:
      Offers prescription drug coverage to Medicare beneficiaries who
       don’t have access to adequate prescription drug coverage today
      Provides enhanced benefits with lower out-of-pocket costs to limited-
       income beneficiaries, as defined by the government
      Gives employers the choice to continue to be the primary provider of
       prescription drug benefits ― not intended to replace employer-
       sponsored coverage that’s as generous or more generous




     Oak Ridge Retiree Town Hall Meeting #1                                    3
What’s Happening (cont.)

    Oak Ridge will continue to offer the current prescription drug
     coverage, which is as generous as or more generous than Medicare
     Part D for 2006
      Anyone who participates in an Oak Ridge retiree medical plan
       receives prescription drug coverage automatically
      Oak Ridge prescription drug coverage does not coordinate with
       Medicare Part D coverage
      This means, for most Medicare-eligible Oak Ridge employees and
       retirees, enrolling in Medicare Part D will not provide additional
       benefits
      If you are a Medicare-eligible retiree or LTD recipient enrolled in
       Oak Ridge coverage and you elect Medicare drug coverage, your
       Oak Ridge medical and prescription drug coverage will be cancelled




     Oak Ridge Retiree Town Hall Meeting #1                                  4
Why We’re Here Today


    This fall, anyone eligible for Medicare will begin receiving information
     from the Centers for Medicare and Medicaid Services (CMS) and
     private insurance companies promoting Medicare health and
     prescription drug plans
    Oak Ridge wants you to understand:
      What Medicare drug coverage means to you as a Medicare-eligible
       Oak Ridge retiree or employee
      That your current prescription drug coverage is as generous as or
       more generous than the standard Medicare coverage
      Enrolling in Medicare Part D will not offer any additional benefits,
       although there are some exceptions
      Enrolling in private Medicare prescription drug coverage for 2006 will
       jeopardize your Oak Ridge-provided coverage
    We understand that, with so many messages, it’s easy to get confused

     Oak Ridge Retiree Town Hall Meeting #1                                     5
                    What is Medicare and What’s Changing?




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What Is Medicare?


    Health insurance component of Social Security
      Administered by Centers for Medicare & Medicaid Services (CMS)

    Provides health benefits for
      Individuals age 65 and older
      Certain disabled individuals under age 65
      Individuals with End-Stage Renal Disease (ESRD)

    Original Medicare is a fee-for service plan
      Part A: hospital insurance
      Part B: medical insurance

    Part A is financed by payroll taxes, Part B by general revenues and
     monthly premiums from participating Medicare beneficiaries


     Oak Ridge Retiree Town Hall Meeting #1                                7
In General, How Does Medicare Work?


                                         Original Medicare
                                                                     Medicare
                                                                                             Part D
                                                                    Advantage
                                                                                      (effective 1/1/2006)
                               Part A                Part B          (Part C)

  What It                Inpatient            Medical care       Part A and Part B   Prescription drugs
  Covers                 hospital care         Physician
                                               Outpatient

  Premium                None                 $78.20/month in    Varies              Will vary by plan but
                                              2005                                   estimated at $32 per
                                              $87.58/month in                        person per month in
                                              2006 (estimated)                       2006




     Oak Ridge Retiree Town Hall Meeting #1                                                                  8
In General, How Does Medicare Work? (cont.)


                                         Original Medicare                 Medicare
                                                                                                     Part D
                                                                          Advantage
                               Part A                 Part B                                  (effective 1/1/2006)
                                                                           (Part C)
  Enrollment             Automatic if           Initial enrollment:   Must be enrolled in    Initial enrollment
  Timing                 already                 Turning age 65 –      Part B                  Nov. 15, 2005 – May
                         receiving               automatic if                                  15, 2006
                         Social                  already receiving                            Can change plans
                         Security                Social Security                               annually if participant
                         benefits;               benefits;                                     continues drug
                         otherwise,              otherwise, active                             coverage (creditable
                         active                  enrollment is                                 coverage)
                         enrollment is           required
                                                                                              Penalty for late
                         required               General: 1/1 –                                enrollment (unless
                                                 3/31 each year                                proof of creditable
                                                Special: Premium                              coverage)
                                                 increase waived if
                                                 individual delayed
                                                 Part B enrollment
                                                 due to employer
                                                 coverage
     Oak Ridge Retiree Town Hall Meeting #1                                                                              9
What’s Changing with Medicare?


    Starting January 1, 2006, prescription drug coverage will be available
      to everyone with Medicare through private Medicare prescription drug
      plans
       “Part D” replaces Medicare discount prescription drug cards, which
         phase out by May 15, 2006
       Until now, Medicare typically did not cover prescription drugs

    Medicare prescription drug plans will be offered by private health
      plans, not the federal government
       All Medicare prescription drug plans will provide at least a
         “standard” level of coverage set by Medicare
       Special coverage for retirees with limited income and resources




     Oak Ridge Retiree Town Hall Meeting #1                                   10
What’s Changing with Medicare? (cont.)


    For 2006, a special Medicare Part D enrollment period will be held
       For individuals eligible by November 15: November 15, 2005 –
        May 15, 2006
       Individuals eligible later: Same initial open enrollment period as
        Part B
       In later years, from November 15 to December 31 for next benefit
        year (January 1 – December 31)




     Oak Ridge Retiree Town Hall Meeting #1                                  11
                                         Let’s stop for a minute to see if
                                         there are any questions?




Oak Ridge Retiree Town Hall Meeting #1                                       12
                        Medicare Prescription Drug Coverage




Oak Ridge Retiree Town Hall Meeting #1                        13
Medicare Part D Terminology

 Terms and abbreviations:
      CMS – Centers for Medicare and Medicaid Services
      Medicare Part D – also refers to Medicare prescription drug coverage
      “As generous as or more generous than” – the Medicare phrase applied
          to employer-provided coverage that offers a benefit comparable to (or better
          than) the standard Medicare Part D coverage
         Creditable Coverage – verification that an individual has coverage that is
          as generous as or more generous than standard Medicare Part D coverage
         Formulary – a specific list of drugs that are considered “covered” by a
          health plan or prescription drug plan
         Limited Income and Resources – individuals who meet specific criteria
          established by CMS that qualify them for extra assistance through CMS
         TrOOP – True out-of-pocket maximum that is defined as the amount of out-
          of-pocket costs a retiree would expect to pay if enrolled in a Medicare Part
          D plan, not including monthly premiums



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How Do Medicare Prescription Drug Plans Work?


    You will receive information directly from private health insurance
      plans in your area
    What do these plans offer?
       There is no easy answer…because different Medicare prescription
              drug plans will be offered
    Although Medicare has outlined a “standard” way to cover benefits,
      different health plans will offer different benefits
       Deductibles, coinsurance, copayments and formularies will vary
       Premiums are likely to vary by health plan
          — Approximately $32 per person per month for 2006, in addition
              to Part B premiums
    Individuals will be allowed to change plans annually, so long as they
      maintain continuous drug coverage (employer plans can qualify as
      “creditable coverage”)
     Oak Ridge Retiree Town Hall Meeting #1                                  15
Standard Medicare Part D Drug Benefit


   A $250 annual deductible applies

   After the deductible, benefits are paid as follows:
      Medicare will pay 75% of drug costs between the deductible and
       $2,250
      Beneficiaries will pay 100% of the drug costs between $2,250 and
       $5,100 (also called the “coverage gap” or “donut hole”)
      Medicare generally will pay 95% of drug costs above $5,100 for
       the year after the beneficiary has paid $3,600 out of pocket




    Oak Ridge Retiree Town Hall Meeting #1                                16
Standard Medicare Part D Drug Benefit (cont.)


   Deductible, $2,250 initial coverage limit, coverage gap and $3,600
     annual out-of-pocket amounts will be adjusted annually based on per
     capita drug expenditures
      For example, a 10% annual increase in per capita drug
        expenditures means the deductible will be $366 by 2010
   Plans must provide access to negotiated (discounted) prices

   Out-of-pocket exclusions (i.e., don’t count towards out-of-pocket limit)
      Costs paid by another plan
      Costs of drugs not on formulary




    Oak Ridge Retiree Town Hall Meeting #1                                     17
Standard Medicare Part D Drug Benefit: A Visual


                                                                           Retiree out-of-pocket costs
                                                        $250                    $750                   $3,600
                   100%                                                                                               Retiree pays 5% (no maximum)
                                   Retiree                 Retiree pays 25% of           Retiree pays 100% of
                                  pays 100%                    next $2,000,            next $2,850, up to $3,600            Plan pays 95%
                                    of first                    up to $500              total out-of-pocket limit
                      75%            $250
                                                             Plan pays 75%
    Coinsurance




                      50%




                                                                                                  Coverage Gap
                                                                                                  (“Donut Hole”)




                                                                                                                                  Catastrophic
                                                                    Coinsurance
                                           Deductible




                                                                                                                                    Benefit
                      25%


                        0%
                                                        $250                      $2,250                           $5,100
                                                                                     Annual drug costs
                                                 Part D benefits                     Retiree liability (counts toward $3,600
                                                                                     true out-of-pocket maximum (TrOOP)*

*TrOOP is “true out-of-pocket” maximum — amount retiree must pay before catastrophic (95%) benefit begins. Employer and insurance company payments
 do not count toward satisfaction of TrOOP.


                  Oak Ridge Retiree Town Hall Meeting #1                                                                                             18
Standard Medicare Part D Drug Benefit: An Example


      Total prescription                      Retiree pays                        Medicare pays                           Retiree’s total out-
      drug expenses                                                                                                       of-pocket costs*
      $0 to $250                              100% of expenses                    0% of expenses                          No more than $250
                                              between $0 and $250                 between $0 and $250
      $251 to $2,250                          25% of expenses                     75% of expenses                         No more than $750
                                              between $251 and                    between $251 and
                                              $2,250                              $2,250
      $2,251 to $5,100                        100% of expenses                    0% of expenses                          No more than
                                              between $2,251 and                  between $2,251 and                      $3,600
                                              $5,100                              $5,100
      Over $5,100                             The greater of:                     Generally, 95% of                       $3,600 + payments
                                                                                  expenses over $5,100                    once the total
                                              a) 5% of the cost of the
                                                                                                                          expenses exceed
                                                drug or
                                                                                                                          $5,100
                                              b) a copayment of $2 for
                                                generic drugs or a $5
                                                copayment for brand-
                                                name drugs
       * The amount retirees pay will increase each year after 2006 based on Medicare’s total cost for prescription drugs. Premiums are also
         expected to increase annually.




     Oak Ridge Retiree Town Hall Meeting #1                                                                                                      19
Who Should Enroll in a Medicare Prescription Drug Plan?

       Medicare prescription drug plans are designed for people who need
       them most…

               Those without drug coverage              Those who qualify for “extra help”
                 For people without the benefit of        The Social Security Administration
                   employer-sponsored coverage               has identified people who may
                                                             qualify for assistance in paying for
                                                             drugs based on their income and
                                                             assets ― applications were mailed
                                                             directly to people in May 2005



     …but it’s completely up to each individual to decide what
     prescription drug coverage option makes the best financial sense for
     his or her family.



     Oak Ridge Retiree Town Hall Meeting #1                                                         20
Who’s Eligible for Extra Help?


    “Limited income and resources” defined as:
       Income less than 150% of federal poverty level
        — $14,355 for individuals in 2006
        — $19,245 for couples in 2006
       Limited liquid assets
        — $11,500 for individuals
        — $23,000 for couples in 2006
    The Social Security Administration is sending applications to those
      who may qualify for the extra benefit
    If you receive an application, you should complete it. Submitting this
      application does not enroll you for Medicare drug coverage




     Oak Ridge Retiree Town Hall Meeting #1                                   21
What Does “Extra Help” Cover?

    There are three levels of benefits and eligibility:
                                                                              1                          2                        3
    Subsidies                                                      <100%                       <135%                      <150%

                                                                                                                       Subsidy phased
    Monthly Premiums                                                   $0                         $0                     out at 150%
                                                                                                                            of FPL

    Deductible ($250)                                                  $0                         $0                        $50

    Cost - sharing, Initial Benefit (<$2,250)                     $1 generic                 $2 generic                 Patient pays
                                                                   $3 brand                   $5 brand                      15%

    Cost - sharing, Coverage Gap (“Donut                          $1 generic                 $2 generic                 Patient pays
    Hol e”)                                                        $3 brand                   $5 brand                      15%

    Cost - sharing, Catastrophic Benefit                          $1 generic                 $2 generic                  $2 generic
    (>$5,100)                                                      $3 brand                   $5 brand                    $5 brand

    Notes: 2005 Health and Human Services Poverty Levels
       1
           Income must be less than $9,570 for individuals/$12,830 for a couple. Must also be eligible for Medicaid.
       2
           Income must be <$12,920/$17,321. Must have liquid assets <$6,000 for an individual/$9,000 for a couple.
       3
           Income must be <$14,355/$19,245. Must have liquid assets <$11,500/$23,000.




    Oak Ridge Retiree Town Hall Meeting #1                                                                                              22
What Medicare Prescription Drug Coverage Means for Oak Ridge




Oak Ridge Retiree Town Hall Meeting #1                         23
The Key Question…


        If I already have coverage through Oak Ridge, does it makes sense
        for me to enroll in a private Medicare prescription drug plan in 2006?



      The answer…


        In most cases, no! Remember the reason ― Oak Ridge already
        provides drug coverage that is expected to pay out at least as much
        as — and in most cases more than — a standard Medicare
        prescription drug plan
      Most retirees are better off under Oak Ridge’s plan, unless:
        You are eligible for “extra help” or on Tricare (the plan for military retirees and spouses),
        Remember, if you are Medicare-eligible and elect Medicare Part D coverage, your continued
          coverage through Oak Ridge will be dropped




      Oak Ridge Retiree Town Hall Meeting #1                                                             24
Oak Ridge Retiree Prescription Drug Coverage: Overview


    Your Oak Ridge retiree medical plan includes prescription drug coverage
         Anyone enrolled in the Oak Ridge retiree medical plan receives
          prescription drug coverage automatically
         Medical and prescription drug coverage is integrated; you cannot
          enroll in one without the other
    Oak Ridge prescription drug coverage is “creditable coverage,” which is
        defined by CMS as being “on average” at least as generous as the
        standard benefit
         Protects your right to leave the Oak Ridge retiree medical plan and
           join another “certified” plan or Medicare prescription drug plan within
           63 days without incurring a penalty on the Medicare Part D premium
           for coverage
           — Those without “creditable coverage” are penalized 1% of the
                monthly Medicare Part D premium for each month enrollment is
                delayed past their initial enrollment period

    Oak Ridge Retiree Town Hall Meeting #1                                           25
2006 Prescription Drug Coverage for Oak Ridge Retirees


    The Oak Ridge Prescription Drug Plan through Medco
         You pay a percentage of the cost for prescription drugs purchased
               at a participating pharmacy or through the mail-order program
               — For retail:
                   – $150 deductible
                   – Coinsurance amount based on whether:
                      – Brand or generic
                      – In-network or non-network pharmacy
               — For mail:
                   – No deductible
                   – Copayment amount based on whether:
                      – Brand or generic
               — No out-of-pocket maximum limits; each prescription requires
                   coinsurance or a copayment
    Oak Ridge Retiree Town Hall Meeting #1                                     26
2006 Prescription Drug Coverage for Oak Ridge Retirees:
Snapshot of Benefits under the Retiree Medical Plan


                                                           Retail                        Mail Order
                                                  (up to a 30 day supply)         (up to a 90 day supply)


     Deductible:                                           $150                             $0

                                                       COINSURANCE
                                                         Brand name:
                                                        Plan pays 70%
     For In-Network
                                             Participant pays 30% (minimum $10)
     Pharmacy
                                                           Generic:
                                                        Plan pays 80%                 COPAYMENT
                                             Participant pays 20% (minimum $10)     Brand name: $35
                                                                                      Generic: $15
                                                      COINSURANCE
                                                       Brand name:
                                                       Plan pays 50%
     For Non-Network
                                                    Participant pays 50%
     Pharmacy
                                                          Generic:
                                                       Plan pays 50%
                                                    Participant pays 50%


    Oak Ridge Retiree Town Hall Meeting #1                                                                  27
                                         Let’s stop for a minute to see if
                                         there are any questions?




Oak Ridge Retiree Town Hall Meeting #1                                       28
                                         What’s Next?




Oak Ridge Retiree Town Hall Meeting #1                  29
Upcoming Communications


  Here’s what you can expect to be receiving over the next few months.

  Communication                               Source                  Timing
  Various promotional communications          Private insurance       Early October through
                                              companies offering      May of next year
                                              Medicare prescription
                                              drug plans
  Notice of Creditable Coverage               Benefit Plans           October


  Medicare & You (handbook)                   Centers for Medicare    October
  How to Compare Plans and How to Enroll      and Medicaid Services
  (tip sheets)                                (CMS)
  Retiree Town Hall Meetings – Part II        Benefit Plans           November




     Oak Ridge Retiree Town Hall Meeting #1                                                   30
Key Points to Remember



    The Oak Ridge retiree medical plan includes prescription drug coverage. This means
     anyone who’s enrolled in an Oak Ridge retiree medical plan receives prescription drug
     coverage automatically
      Medical and prescription drug coverage are combined and a person can’t enroll in one
       without the other
    For 2006, your Oak Ridge coverage is at least as generous as private Medicare
     prescription drug coverage
    Your Oak Ridge prescription drug coverage does not coordinate with private Medicare
     prescription drug coverage
      This means you do not need to enroll in Medicare Part D to keep your Oak Ridge
        coverage
      In fact, if you enroll in Medicare Part D, you will lose your Oak Ridge retiree medical
        coverage




     Oak Ridge Retiree Town Hall Meeting #1                                                      31
                                         Thanks for Coming!




Oak Ridge Retiree Town Hall Meeting #1                        32

								
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