Important information concerning
Medicare changes for 2006

Beginning January 1, 2006, anyone who is eligible for Medicare can begin taking advantage of the new Medicare Prescription Drug Coverage, Part D. Medical Mutual and Medco have teamed up to offer our members a Prescription Drug Plan. Learn more by visiting www.yourxplan.com or call 1-800-758-4309.

The following are a few tips on what to expect and what you can do now to prepare for the new plan.

Questions & Answers

Q. Is Medical Mutual offering Part D coverage for 2006?

A. Medical Mutual is partnering with Medco to market its Part D product, which you can learn about by visiting www.yourxplan.com online anytime or calling 1-800-758-4309 (beginning Nov. 1, 2005) to learn more.

Q. I thought I read previously that MMO was offering a Part D product?

A. MMO is offering a Part D product with Medco. Any informational materials you receive about this product will include the Medco name and logo.

Q. What if I already have a Medical Mutual Medicare Supplement (or Medigap) policy?

A. You should receive a notice in the mail explaining whether your policy covers as much or more than the new Medicare drug coverage, and it will list your rights and choices.

Q. Can I sign up for Medicare health insurance (Parts A, B or C) with Medical Mutual?

A. Not for 2006, but Medical Mutual plans to offer Medicare health insurance, called Medicare Advantage, for 2007.

Q. How can I learn more?

A. To learn more about the Medco product, visit www.yourxplan.com online anytime or call 1-800-758-4309 (beginning Nov. 1, 2005). For general information about the Medicare Part D program, you can call 1-800-MEDICARE (1-800-633-4227), or visit Medicare’s web site at Medicare.gov. Medicare.gov also includes a plan comparison tool to help determine the best program to suit your needs.

Q. How much will it cost?

A. Unless you qualify for extra assistance, you will need to pay a monthly premium, an annual deductible and co-payments that will vary according to the plan you choose and where you live. Under the standard plan, individuals will need to pay a premium of about $30 per month and a deductible. After your yearly eligible out-of-pocket drug costs reach $3,600, you pay the greater of: $2 for a Generic or a Preferred Brand Drug and $5 for all other drugs, or 5% coinsurance.

Q. When should I join?

A. If you currently are eligible for Medicare, you can sign up with a plan between November 15, 2005, and May 15, 2006. Sign up by December 31, 2005, and your coverage begins January 1, 2006.

Q. When will my drug coverage begin?

A. Your drug coverage will begin on January 1, 2006, if you sign up by December 31, 2005. If you sign up later, your coverage will begin on the first day of the month following the month you join. For example, if you sign up with a plan on January 15, 2006, your coverage will begin on February 1, 2006.

Q. What happens if I sign up late?

A. If you choose to wait and enroll after May 15, 2006, you may pay a monthly penalty of 1% of the monthly premium, and the penalty may continue over the life of your coverage.

Q. I am healthy and don’t use many medications, so why should I join a Medicare drug plan?

A. Even if you have low drug costs today, these costs could be higher in the future if you become ill. Just like other forms of insurance, the Medicare prescription drug coverage will protect you and your family from financial loss in the event of a serious illness. A recent study found that the average Medicare beneficiary will receive significantly more in benefits from having Medicare drug coverage over his or her lifetime than he/she will pay in premiums.

Q. Are all Medicare drug plans the same?

A. No, plans are be different. Plans vary on the drugs they cover. They also have different pharmacies in their networks and different premiums, deductibles and co-payments. However, all plans provide protection from catastrophic drug costs.

Q. How often will I be able to change plans?

A. Each year, there will be an open period in which you can review your plan choices for the coming year and either continue with your current Medicare drug plan or choose a new one. You may also have another opportunity during the year to switch plans under limited circumstances. For example, if you move out of the service area of your plan, you’ll have an opportunity to choose another plan that serves your new area.

Q. How does the plan protect people on Medicare against high out-of-pocket drug costs?

A. This benefit works like many insurance products in that it provides protection from catastrophic events. The Medicare prescription drug coverage recognizes the need to protect people on Medicare from high out-of-pocket drug expenses. Once your yearly eligible out-of-pocket drug costs reach $3,600, you pay the greater of: $2 for a Generic or a Preferred Brand Drug and $5 for all other drugs, or 5% coinsurance. Medicare and your plan will pick up the remaining costs.

Q. How can I get help with drug plan costs?

A. Medicare beneficiaries with low or limited income and resources may qualify for additional assistance. If you qualify, your Medicare prescription drug plan costs, the amount of your premium and your drug costs at the pharmacy will be less. If you are not receiving this additional assistance, you should contact 1-800-Medicare to see if you might qualify.

Availability of Medicare Subsidy Information

Beneficiaries interested in available Medicare Part D subsidies may contact Medicare at 1-800-MEDICARE (1-800-633-4227) (TTY/TDD users should call 1-877-486-2048), their State Medicaid Office, or local Social Security Administration Office.

Q. What happens if I currently have employer-provided drug coverage?

A. Roughly a third of Medicare beneficiaries get drug coverage from their former employer. If your employer continues to offer prescription drug coverage, you can decide whether to keep your existing coverage or switch to another plan.

Note: if you elect to drop your employer-sponsored coverage, you might not be able to re-enroll in your employer-provided drug coverage.

*Q&A list courtesy of the Medicare Rx Education Network.

Additional Resources

10 Important
Things to Know About Part D

1. What is Medicare Prescription Drug Coverage, “Part D”?

Participation in the program is voluntary and open to everyone who is eligible for Medicare. The first enrollment period starts November 15, 2005, for coverage beginning January 1, 2006, and ends May 15, 2006, without a late enrollment fee, unless you qualify for exceptions. Visit www.yourxplan.com for plan details.

2. Why should I join?

As we get older, most people need prescription drugs to stay healthy. Even if you don’t take many prescription drugs now you should still consider joining a Medicare drug plan in 2006. For most, joining as soon as possible means the lowest monthly premiums.

3. Important dates

  • October 1, 2005 – First day for companies to release details of their individual plans.
  • November 15, 2005 – First day you can enroll in a Part D Prescription Drug Plan.
  • January 1, 2006 – First day you can use your Part D Drug coverage, if you enrolled before December 31, 2005.
  • May 15, 2006 – Last day you can enroll in a Part D Prescription Drug Plan without any penalties (1% increase per month).

4. Plans

There are two basic plans: a Prescription Drug Plan (or PDP) which can be used with a traditional Medicare/Medicare supplement plan and covers only drugs; and a Medicare Advantage plus Prescription Drug (or MAPD) which includes medical coverage for hospital & doctor expenses.

5. Coverage

No matter which plan is chosen there will be a cost associated. Part D is designed to pay a portion of the cost. The plan will dictate how much you will pay toward each prescription.

6. Costs

You will pay a monthly premium for Standard Coverage, which varies depending on the plan, currently estimated at about $30. Qualifying participants may be eligible for reduced payments or financial assistance based on income. Contact the local Social Security office or call 1-800-MEDICARE.

7. Fees

The premium cost will increase at least 1% per month for every month you wait after May 15, 2006 – the longer the wait the higher the premium.

8. Contact Information

Call 1-800-758-4309 for detailed plan information or see the additional resources section below.

9. What to do now?

Gather information about your current drug & health care coverage along with the information on drugs used (name, frequency, dosage & costs). Look for local information on Part D and any financial assistance that may be available.

10. Shop around

Finally, compare the plans and choose one that best suits your needs.