Learning The ABC's and D of Medicare
Getting Ready for the New Prescription Drug Benefit

What is Medicare Part D?
Originally Medicare was comprised of just two parts: Part A, which is hospital insurance, and Part B, which is medical insurance. Medicare+Choice, currently called Medicare Advantage, was then added. The plan is frequently called Part C, however Medicare does not refer to it this way. In December 2003, Congress and the President enacted new legislation that will bring a new prescription drug benefit, Part D, to all Medicare beneficiaries starting in January of 2006. Understanding the new legislation, and how we can assist our members, is our focus here at Blue Cross of California.

Medicare will contract with private companies like Blue Cross of California to offer the Part D benefit. This benefit is known as a Prescription Drug Plan or PDP. People will have an opportunity to purchase Part D through one of these companies. If you are eligible for, or enrolled in Medicare, you will receive information later this year about the new Part D drug benefit. It is important to understand that Medicare beneficiaries who are happy with their current coverage will have the choice to remain on their current plan, just as it is today.

You may enroll in Part D through a Medicare Advantage Plan with prescription drug coverage, if one is offered in your area. Health care companies who offer Medicare Advantage plans do so under a contract with Medicare to administer your Medicare benefits. These plans can be either a Medicare HMO (health maintenance organization) or a PPO (preferred provider organization) and will normally include the Part D prescription drug benefit.

	Some prescription drug plans may have additional options to help low-income members pay the out-of-pocket costs.
	You may also have the choice of ordering covered drugs through the mail or buying them directly from a network pharmacy.

How does the new Drug Benefit work?
With Medicare Part D, for the first time ever, all people with Medicare will be able to enroll in plans that cover prescription drugs. Plans may vary, but in general they will work like this:

		You can choose a prescription drug plan and will pay a premium of about $35 a month.
		You will pay the first $250 (called a deductible) of your prescription drug costs.
		Medicare then will pay 75% of costs between $250 and $2,250 for your drug spending. You will pay only 25% of these costs.
		You will pay 100% of the drug costs above $2,250 until you reach $3,600 in out-of-pocket spending.
		Medicare will pay 95% of the costs after you have spent $3,600.
This is required standard benefit information, however most PDPs will offer enhanced benefits.

When does Enrollment begin?
For benefits in 2006, Medicare Part D will have an initial six-month enrollment period from November 15, 2005 through May 15, 2006. After that, an enrollment opportunity will be offered each year from November 15 through December 31, with coverage effective on January 1, 2007. Beneficiaries may use this enrollment period to switch PDPs, if they choose.

What if I already have drug coverage?
Plans with drug coverage: If you are currently enrolled in a Medicare Supplement (Medigap) plan with built-in drug benefits, you will have the following options as of January 1, 2006:
	You may keep your current plan as is, and not enroll in Part D.

	You may keep your current plan and request that the drug benefits be removed. Your premium will be lowered, and you will be able to sign up for Part D. It is important to note that as of January 1, 2006, private insurers will not be able to sell Medicare Supplement plans with drug coverage, so you will not be able to switch back to your previous drug coverage.
	You may choose another Medicare Supplement policy without drug benefits, without having to answer medical questions, and sign up for Part D.

Plans without drug coverage: If you are currently enrolled in a Medicare Supplement plan that does not have built-in drug coverage, you will have the option to enroll in Medicare Part D as of January 1, 2006, without answering any health questions.

Who will be offering the new Part D Drug Benefit?
Later this year an announcement will be made by the Centers for Medicare & Medicaid Services about which insurance companies will be offering the new drug plans.

When will I get more information about my plan options?

No one should be rushed into making a choice about Medicare plans or services at this time. There is time to learn and discuss the variety of products and services that will be available from a wide number of insurers, including Blue Cross of California.

Later this year, Medicare will send information about Part D to everyone who is Medicare eligible. In addition, during the coming months, Blue Cross of California will also be providing further information as it becomes available.

Important Dates Related to Your Medicare Part D Coverage

2005
June	Dual Eligibles and Low Income individuals will receive a letter from Medicare with information on standard benefits and eligibility.
October	You will be receiving specific plan information and rates. (Please note: This information will not be available prior to September 15, 2005).
November 15	The first enrollment period for Medicare Part D begins for 2006.
2006
January 1	Medicare Part D takes effect.
May 15	The first enrollment period for Medicare Part D ends for 2006.
November 15	The enrollment period for Medicare Part D begins for 2007.