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Information About the Medicare Modernization Act
June 27, 2005

The Centers for Medicare and Medicaid Services (CMS) has prepared volumes of information related to the Medicare Modernization Act (MMA), particularly the Medicare Prescription Drug Benefit. CMS has developed information specifically for providers who need an overview of the program, but not the level of detail that beneficiaries will need. A portion of the CMS web site section on MMA is devoted to information for providers (www.cms.hhs.gov/medicarereform/pdbma/provider.asp).

A link contained on this site leads to Medicare Learning Network information on the prescription drug benefit (www.cms.hhs.gov/medlearn/drugcoverage.asp) and a series of Medlearn Matters articles. The first is SE0501, MMA — Coming Soon — The New Medicare Prescription Drug Program. This article provides general background information about the program and links to the CMS information. A synopsis of SE0502, MMA — The Facts for Providers Regarding the Medicare Prescription Drug Plans That Will Become Available in 2006, follows. Please refer to the Medlearn Matters articles for more complete information. PCPA plans to provide educational opportunities with more in-depth discussion as implementation approaches.

Medicare prescription drug plans (PDPs) will be used beginning January 1, 2006. PDPs will require a monthly premium and cost sharing for prescriptions. They will vary in the drugs that are covered, how much the beneficiary must pay, and which pharmacies the beneficiary can use. Beneficiaries who currently have Medicare Parts A and B can enroll in a PDP between November 15, 2005 and May 15, 2006. In the future, beneficiaries can join or change PDPs only once each year, between November 15 — December 31 of the coverage year. Coverage will begin January 1, 2006, for those who select a PDP by December 31, 2005. After December 31, coverage will begin the first day of the month following the month that the beneficiary enrolls. Beneficiaries who do not select a PDP by May 15, 2006, will have to pay more to select one at a later date.

Persons with low incomes and limited assets can apply for the low income subsidy (LIS) to assist with payment for the PDP. Notices are being distributed this summer to persons who may be eligible, to notify them of the availability of assistance and how to apply. Those who receive both Medicare and Medicaid are deemed eligible for the LIS and will not need to make application.

If a beneficiary has an existing Medigap policy or drug coverage through an employer or union that covers as much as, or more than, a PDP he will have a choice whether to keep the current plan or choose a PDP. If he chooses to select a PDP later, there will not be any penalty. If the existing coverage is less than a PDP the individual could also select a PDP or could keep just the current drug plan; however, if he later selects a PDP penalties will apply. Another option is to drop the current plan and select a PDP; however the individual may not be able to return to the original plan if he changes his mind.

Discussion of other aspects of this complex program will appear in future Infos.

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