# Presentation: 430435

## Medicare Prescription Drug CoverageRetiree Town Hall Presentation:The Basics of Medicare

**September 2005**

**Notes:**
I’d like to welcome all of you to our session today. Our session today is designed to discuss the introduction of Medicare Part D and how it affects Oak Ridge retirees, their dependents and other individuals who are eligible for Medicare.

I’m _______ from Towers Perrin. Towers Perrin is a human resources consulting firm and our company been asked by Oak Ridge Human Resources to conduct these sessions with you.

As you may know, this session is the first of two town hall meetings that Oak Ridge is offering to retirees. Today’s session will focus on Medicare and what Part D is, what it means to you and what you should consider when you receive materials from insurance companies and providers who will be encouraging you to enroll.  And let me assure you that you will be receiving materials in the near future if you haven’t already.

We’ll also be offering one more series of retiree meetings for you in early November.  During that session, we’re planning to provide you with a comparison of how your Oak Ridge retiree prescription drug coverage compares to the plans that are offered in this area.

Our goal here today will be to walk you through Medicare and the newest part of Medicare, prescription drug coverage.  I’ll be pausing for questions at various points throughout today’s session and we have some assistants from Oak Ridge HR who will be manning the roving mikes.

Now, let’s get started...

## 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

**Notes:**
Let’s review our agenda for today’s meeting.  We’ll talk about what’s happening to Medicare and what brings us here today.

We’ll get into some basics about Medicare, although I expect that we’ll be covering some topics that many of you are already experts on.  We’ll also talk about what’s changing.

We’ll spend some time discussing what the “standard Medicare Part D” coverage will look like.  We’ll also do a brief comparison of how that coverage compares to Oak Ridge coverage ... and I think that many of you will be pleasantly surprised to see how your Oak Ridge coverage compares to the standard Part D plan.

Finally, we’ll talk about what you can expect in the coming months, which we expect will involve a great deal of mail, phone calls and TV ads.

## 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

## 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

## 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

**Notes:**
Oak Ridge will continue to offer the current prescription drug coverage to retirees and the coverage retirees receive is clearly more generous than what Medicare Part D offers for 2006.

Let’s remember that anyone who’s enrolled for Oak Ridge retiree medical coverage already receives prescription drugs included in that coverage

Oak Ridge and Medicare Part D do not coordinate, which means that you wouldn’t be able to submit a claim that Medicare Part D has already paid and receive any additional benefit from your Oak Ridge coverage.

So, an Oak Ridge retiree who enrolls in Medicare Part D – and pays the premium for doing so – won’t be receiving any additional benefits.

What’s more, if you are an Oak Ridge retiree who’s enrolled in retiree medical coverage and you decide to enroll in Medicare Part D coverage, you will risk losing your Oak Ridge retiree medical coverage.

## 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

## 

What is Medicare and What’s Changing?

**What is Medicare and What’s Changing?**

## 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

## In General, How Does Medicare Work?

|  | Original Medicare |  | Medicare Advantage(Part C) | Part D(effective 1/1/2006) |
| --- | --- | --- | --- | --- |
|  | Part A | Part B |  |  |
| What It Covers | Inpatient hospital care | Medical care
Physician
Outpatient | Part A and Part B | Prescription drugs |
| Premium | None | $78.20/month in 2005
$87.58/month in 2006 (estimated) | Varies | Will vary by plan but estimated at $32 per person per month in 2006 |

**Notes:**
Let’s look at the first two rows of these chart.  You’ll see that we have both Parts A and B listed.  We also have included “Part C”  or Medicare Advantage plans, which were formerly referred to as Medicare+ Choice plans.  Finally, we’ve included Part D in the chart so we have the first few letters of the alphabet accounted for.
We’ve already addressed both Part A and Part B so let’s briefly discuss Part C.  These plans are also called Medicare HMOs and typically include both Part A and B services for an established premium.  You may have Medicare Part C plans offered in your area but, since they aren’t included in your Oak Ridge retiree medical coverage, enrolling in one would jeopardize your continued Oak Ridge coverage.
Finally, let’s discuss Part D.  As you know, it provides prescription drug coverage but will require a premium for 2006 that’s expected to average $32 per person per month. This coverage will be offered through private insurance companies.

## In General, How Does Medicare Work? (cont.)

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

**Notes:**
Enrolling for the various parts of Medicare depend on your age and whether you have other coverage.  For example, you generally don’t have to enroll for Part A coverage since it’s automatic if you’re receiving Social Security benefits.  Otherwise, you need to make an active election.
For Part B, you normally enroll when you turn age 65.  However, you can waive coverage if you have coverage through an employer (in the case when you are working past age 65).  If that’s the case, you can enroll when you retire from your employer and will have no penalty for enrolling late.
Enrolling in Medicare Part C also requires an active election on your part.
Part D enrollment will start this year for the first time and will run from November 15, 2005 through May 15, 2006.  After this year’s enrollment, there will be an annual enrollment each year, during which you can switch plans.  There is a penalty for late enrollment, just like for Part B, unless you can provide proof of creditable coverage.  We’ll define that term in a moment but I can give you a quick assurance that the coverage you have through your Oak Ridge retiree prescription drug coverage will be considered “creditable.”

## 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

**Notes:**
So let’s spend some time discussing what’s changing with Medicare, specifically prescription drug coverage.
Beginning January 1, 2006, many individuals who did not have prescription drug coverage will be able to purchase it.  Part D eliminates the discount prescription drug cards that were distributed in 2004.
Medicare prescription drug plans will not be offered by the federal government.  Instead, private health plans will provide the coverage, based on a “standard” level of coverage that the government has established.
There is also assistance offered to individuals who have limited income and resources.

## 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)

**Notes:**
As we’ve discussed, there will be a special enrollment period this year that will start in November and carry through May of next year.

If someone becomes eligible later, there will be the same initial open enrollment period that exists for Part B.

In the future, enrollment periods for Medicare Part D will occur from November 15 to December 31 for coverage the following year.

## Let’s stop for a minute to see if there are any questions?

**Notes:**
I know we’ve covered a lot of material so let’s pause for a minute and give you a chance to ask questions.  

Just so you know, we’re going to be covering the standard Medicare Part D coverage and how it compares to your Oak Ridge retiree prescription drug coverage next, so if you have questions about that, let’s wait to see if we cover it during the next section.  If not, I’ll be pausing for questions again later.

## 

Medicare Prescription Drug Coverage

**Medicare Prescription Drug Coverage**

## 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

**Notes:**
Now that we’re in the Medicare Part D discussion, it’s a good time to make sure we’re all speaking the same Medicare language.  Here are some terms you’ll hear me use – in fact, in a couple of instances, I’ve already used these terms.  But let’s go through each of these to make sure.  [Read slide]

## 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”)

**Notes:**
I think we’ve adequately warned you about the volume of information you can expect to receive from prescription drug vendors in your area who will be offering 2006 Medicare Part D plans.  Remember, they are mailing these to all Medicare-eligible individuals, without knowing whether or not you have retiree medical coverage through an employer.
What will these plans look like?  As strange as it may sound, we don’t know.  Formal plan applications are still being finalized and it’s expected that vendors will offer a variety of plans, at various price levels, to get the most applicants enrolled.
We do know the “standard” plan that Medicare has stated and we’ll review that in a minute.  As we discussed already, the average cost for this coverage is expected to be $32 per person per month for 2006.  And this premium will be in addition to what is charged for Part B.
People who enroll in these private Part D plans in 2006 will have the option of changing plans each year, so long as they can prove they’ve had continuous and creditable coverage – through another Part D provider or an employer plan.

## 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

**Notes:**
Before we begin, let’s not forget that this will be additional coverage that you’ll be paying for.  Before any benefits begin, an individual will be required to pay a $250 deductible for any prescription drugs purchased.
After meeting the deductible, Medicare will share the cost of drugs on a 75%/25% basis.  Once the drugs purchased total $2,250, Medicare coverage has a “gap” or a “donut hole.”  This means that beneficiaries will be responsible for the full cost of drugs between the $2,250 price point up to a total of $5,100.
Once the cost of drugs has reached $5,100, Medicare coverage resumes and pays 95% of the cost of drugs for the remainder of the year.
This leaves beneficiaries with a total of $3,600 in out of pocket expenses.  But let’s not forget that this is coverage that many retirees did not have prior to MMA.  So limiting coverage in any way will be a benefit to those individuals who do not have prescription drug coverage through a former employer like all of you do.

## 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

**Notes:**
Just like Part B premiums, the deductible, coverage limit, coverage gap and out-of-pocket limit will be adjusted annually based on how much the plans have been utilized.  As noted on the slide, if there’s an annual increase of 10% in drug costs, it means the deductible will be $366 in 2010.

Any private insurance plan that’s offering 2006 Medicare Part D coverage needs to be offering participants access to negotiated prices.  Again, this is a benefit that anyone who is already covered by an employer plan (like you) is receiving but it’s a true benefit to anyone who previously hasn’t had coverage.
While Medicare Part D plans have out-of-pocket limits there are some items that are excluded, including any costs paid by another plan or any drugs that have been obtained that aren’t on the formulary.

## Standard Medicare Part D Drug Benefit: A Visual

- *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.

**0%**

**25%**

**50%**

**75%**

**100%**

- $250

- $2,250

- $5,100

***Retiree pays 100% of first $250***

***Retiree pays 25% of ******next $2,000, ******up to $500 ***

- Deductible

**Coinsurance**

- Plan pays 75%

**Part D benefits**

**Retiree liability (counts toward $3,600 true out-of-pocket maximum (TrOOP)***

***Retiree pays 5% (no maximum)***

***Retiree pays 100% of next $2,850, up to $3,600******total out-of-pocket limit***

***Retiree out-of-pocket costs***

- $250

- $750

- $3,600

***Annual drug costs***

- Plan pays 95%

- Coinsurance

- Coverage Gap (“Donut Hole”)

- CatastrophicBenefit

**Notes:**
This is another way to look at what we’ve just described.  The light portion of the chart is what a retiree enrolled in this plan would expect to pay and the dark portion is what Medicare will pay.
You can also see at the bottom of the slide another abbreviation that comes to us via Medicare Part D:  TrOOP is true out-of-pocket maximum.

## Standard Medicare Part D Drug Benefit: An Example

| Total prescription drug expenses | Retiree pays | Medicare pays | Retiree’s total out-of-pocket costs* |
| --- | --- | --- | --- |
| $0 to $250 | 100% of expenses between $0 and $250 | 0% of expenses between $0 and $250 | No more than $250 |
| $251 to $2,250 | 25% of expenses between $251 and $2,250 | 75% of expenses between $251 and $2,250 | No more than $750 |
| $2,251 to $5,100 | 100% of expenses between $2,251 and $5,100 | 0% of expenses between $2,251 and $5,100 | No more than $3,600 |
| Over $5,100 | The greater of:
5% of the cost of the drug or
a copayment of $2 for generic drugs or a $5 copayment for brand-name drugs | Generally, 95% of expenses over $5,100 | $3,600 + payments once the total expenses exceed $5,100 |

- * 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.

**Notes:**
And finally, we’ve included a chart that explains the same process.  Remember that in addition to the column on your right that outlines a retiree’s total out-of-pocket costs, this individual is also paying a premium of approximately $32 per month or an annual total of $384.

## Who Should Enroll in a Medicare Prescription Drug Plan?

**Those without drug coverage**
- For people without the benefit of employer-sponsored coverage

**Those who qualify for “extra help”**
- The Social Security Administration 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

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

- ...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.

**Notes:**
So who should be considering enrolling in a Medicare prescription drug plan?  Really the plans are designed for two groups of individuals:  those who currently don’t have drug coverage now or those who qualify for extra help, due to limited income and resources.

## 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

**Notes:**
We’ve talk a lot about individuals who are described as having limited income and resources.  Let’s discuss how that definition is determined.  The income level is noted on the screen and I understand that CMS is comparing last year’s tax returns to determine who might qualify, based on those numbers.  However, another determination is how much in liquid assets an individual has – this doesn’t include a house or car but might be a savings account, a 401(k) balance or some other asset that conceivably could be turned into cash if need be.
Social Security has already started mailing applications to individuals who they believe might qualify.  If you receive the application, you should go ahead and complete it.  It will help you determine whether or not you might be considered as eligible.  Completing and submitting the application does not enroll you for 2006 Medicare prescription drug coverage.
If you think you might be eligible and have not received an application, you can contact your local Social Security office and request an application.  Again, completing and submitting the application does not enroll you for Medicare prescription drug coverage.

## What Does “Extra Help” Cover?

- There are three levels of benefits and eligibility:

**Notes:**
If an individual does qualify, it makes good financial sense to consider enrolling in a Medicare prescription drug coverage.  Medicare is providing three levels of benefits, based on what level of assistance is needed according to financial need.  You can see that in many cases, there are no premiums or deductibles and substantially smaller copays for individuals in these categories.

## 

What Medicare Prescription Drug Coverage Means for Oak Ridge

**What Medicare Prescription Drug Coverage Means for Oak Ridge**

## 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

**Notes:**
Time for another question that I’ll answer for you.  If I already have coverage through Oak Ridge, should I enroll in a prescription drug plan through Medicare?
And the answer is no.  As we’ve discussed, you already have coverage – generous coverage – through Oak Ridge that provides more than the standard Medicare prescription drug coverage.
Only two exceptions to this one word answer – if you’re eligible for extra help as we just discussed or if you’re already enrolled in the Tricare plan.  If you’re in Tricare, I won’t be covering your coverage through that plan in today’s session.  We’ll be covering the prescription drug coverage through the MMMSP plan that I believe covers many of today’s attendees.
And remember, if you enroll in a Medicare Part D coverage, you risk losing your Oak Ridge retiree medical coverage.

## 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

**Notes:**
The prescription drug coverage you have through Oak Ridge is included with the medical coverage that you receive.  The two coverages can’t be separated and you can’t enroll in one without the other.
The coverage you have through Oak Ridge is considered creditable coverage.  This verification gives you the option, down the road, to leave your Oak Ridge retiree medical plan and join a private Medicare Part D plan without having to pay a penalty – or increased premium.
If you don’t have creditable coverage and are considered a “late enrollee” in a Medicare Part D plan, you’ll pay a 1% penalty for each month that has passed since you were first eligible to enroll.  So if you enroll 19 months after you first became eligible and don’t have proof of creditable coverage, your premium will be 19% greater and will stay that at that level for the entire duration of your coverage with that plan.

## 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

**Notes:**
So let’s discuss your Oak Ridge prescription drug coverage.  Remember, your premium for this coverage is included in what you pay for retiree medical coverage.
If you obtain prescriptions at a pharmacy (what we call “retail” on the slide) you’ll need to meet a $150 deductible, whether you obtain your coverage in or out of network.
If you obtain your prescription through mail order, there’s no deductible and you receive a longer dosage with a small copay, depending on whether you’re getting a brand or generic drug.
There are no out-of-pocket limits with our plan but you can minimize your expenses by using the mail order program for any maintenance medication.
Let’s look at the plan in closer detail.

## 2006 Prescription Drug Coverage for Oak Ridge Retirees: Snapshot of Benefits under the Retiree Medical Plan

|  | Retail
(up to a 30 day supply) | Mail Order 
(up to a 90 day supply) |
| --- | --- | --- |
| Deductible: | $150 | $0 |
| For In-Network Pharmacy | COINSURANCE
Brand name: Plan pays 70%
Participant pays 30% (minimum $10)
Generic:
Plan pays 80%
Participant pays 20% (minimum $10) | COPAYMENT
Brand name: $35
Generic: $15
 |
| For Non-Network Pharmacy | COINSURANCE
Brand name: Plan pays 50%
Participant pays 50% 
Generic:
Plan pays 50%
Participant pays 50% |  |

**Notes:**
Our plan encourages you to obtain your prescriptions through an in-network pharmacy and to use generics whenever possible.  
After you meet a $150 deductible, you share in the cost of the prescriptions by paying 30% of the cost for a brand name and 20% of the cost for generic if you use an in-network pharmacy.  And when you use an in-network pharmacy, you’re purchasing drugs that are already discounted off the retail price.  If you use a non-network pharmacy, you’ll pay more for any prescription – not only through higher coinsurance but also because you’ll be paying for drugs that aren’t discounted through our network.
And while you have a deductible before coverage begins on the retail side, you can use the mail order throughout the year without meeting a deductible. If you haven’t used the mail order portion of the program and are on maintenance medications that you expect to use for three months or longer, you might want to give it a try.  You can minimize your out-of-pocket costs and get your prescriptions mailed to your home.

## Let’s stop for a minute to see if there are any questions?

**Notes:**
We’re near the end of our presentation today but I want to pause again to see if anyone has any questions.  

I know there may be some questions that you might not want to ask during the session so let me assure you that I’ll be here after our session, along with some of our helpers, to speak with you.

## 

What’s Next?

**What’s Next?**

**Notes:**
OK, let’s cover what information you can expect to receive in the coming months.

## Upcoming Communications

| Communication | Source | Timing |
| --- | --- | --- |
| Various promotional communications | Private insurance companies offering Medicare prescription drug plans | Early October through May of next year |
| Notice of Creditable Coverage | Benefit Plans | October |
| Medicare & You (handbook)
How to Compare Plans and How to Enroll  (tip sheets) | Centers for Medicare and Medicaid Services (CMS) | October |
| Retiree Town Hall Meetings – Part II | Benefit Plans | November |

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

**Notes:**
Don’t say you weren’t warned about the promotional communications we expect you to receive.  You’ll be encouraged to participate in various private Medicare prescription drug plans for 2006 – just to be safe – because these companies aren’t aware that you already have coverage through Oak Ridge.
Oak Ridge will be communicating with you again in October, when you’re provided with the Notice of Creditable Coverage.  This is an important communication that you’ll want to save with your other important benefit papers.  In the event that you decide at some later date to enroll in a Medicare prescription drug plan, you’ll need to provide this notice or you’ll end up paying a higher premium due to your late enrollment.  You’ll get a Notice from Oak Ridge each year that confirms your coverage remains creditable.
You’ll also be invited to attend one more set of retiree town hall meetings.  The sessions we’re planning to hold in early November will be more focused on comparing your Oak Ridge coverage with the plans that are being offered in your area.  We’ll walk through how to compare your coverage and potential out-of-pocket costs.  And of course, we’ll remind you that if you do decide to enroll in a private Medicare prescription drug plan, you’ll risk losing your Oak Ridge coverage.
Finally, you’ll be receiving a booklet from CMS that talks about Medicare coverage for 2006, which will also include information about the Medicare prescription drug plans. 

## 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

**Notes:**
So I’d like to leave you with a couple points that we’d like you to keep in mind as you’re receiving and reviewing the materials from other vendors.
First, you already have prescription drug coverage through Oak Ridge, which provides coverage that is as generous, if not more so, than the Medicare prescription drug coverage.
If you decide to enroll in a Medicare prescription drug plan, keep these points in mind – that coverage will not coordinate with your Oak Ridge coverage.  In other words, Oak Ridge coverage won’t pay what Medicare doesn’t and vice versa.  In addition, if you do enroll in a Medicare prescription drug plan, you’ll lose your Oak Ridge coverage.
However, if you qualify for extra help as a limited income and resources individual, you should enroll in the Medicare prescription drug plan since the benefits you’ll receive will provide you with the coverage you need at a significantly lower cost.

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Thanks for Coming!

**Thanks for Coming!**

**Notes:**
So that wraps up our discussion today.  We can take a few more questions before we close our session and don’t forget that I’ll be available after our session, along with my colleagues, to answer any specific questions related to your personal situation.

I’d like to thank you for participating in our session today and being so attentive.  Hope you’ll join us in November for the next series of town hall meetings.

Take care and please get home safely.