What Medicare Prescription 

Drug Coverage Means to You

A Guide to Getting Started

INTRODUCING
A

fter 40 years of providing dependable coverage for 

doctor visits, hospital stays, and life-saving surgeries, 

Medicare now covers new preventive screenings

and offers dependable coverage for prescription drugs.

Everyone with Medicare is eligible for this coverage,

regardless of income and resources, health status, or

current prescription expenses.

How the coverage helps.

Medicare prescription drug coverage is insurance that

covers both brand-name and generic prescription drugs at

participating pharmacies in your area. A typical person with

Medicare and no drug coverage could see total drug costs

drop by about 50%. Should prescription drug costs

dramatically increase, Medicare will pay up to 95% of

these costs after you spend $3,600 out-of-pocket in a year.

Extra help is available for people with limited income and

resources. See the “extra help” section inside this brochure. 

Even if you do not take a lot of prescription drugs now, it’s

still good to consider joining. As we age, most people need

prescription drugs to stay healthy. Signing up for Medicare

prescription drug coverage today can protect you from very

high prescription drug bills in the future.

IMPORTANT: Medicare prescription drug coverage does

not include the following: doctor samples, discount cards,

Medicare-approved discount cards with or

without the $600 credit, free clinics, and

drug discount websites.

Treatment. Preventive care. And now

prescriptions. It’s all coming together.

With new prescription drug coverage,

Medicare now covers more than ever.
• Gather information about your current coverage for health

care and prescription drugs. Make sure you know what

coverage you have now. 

• Gather information about the drugs you use, including their

names and dosages. Think about other things that matter to

you about coverage, like whether you want more protection

if your drug needs change, or whether you want coverage that

has a lower premium. This will help you compare plans later.

• Remember the key Medicare dates.

• Apply for extra help if you think you might qualify.

• Watch for the Medicare & You handbook arriving in your

mail in October. Read it carefully and talk about this new

coverage with people you know and trust.

Need more information? Help is available.

Medicare is working with people and organizations at the local

level to help you understand the new prescription drug coverage

and the various plan options available in your community.

Look for information about events in your local newspaper or

listen for information on the radio. You can also get personalized

counseling by calling your State Health Insurance Assistance

Program or local office on aging. For the telephone number

of your local office on aging, visit www.eldercare.gov.

Remember: You must sign up for coverage to begin.

Once you feel comfortable that you have all the information

you need to make a decision, it’s time to act. You must join

for coverage to begin. You can do it as early as November

15, 2005 for coverage beginning January 1, 2006. Sign up by

December 31, 2005 and you won’t miss a day of coverage.

The sooner you join, the sooner your coverage will begin.

Got a question? Need someone to walk you through it? 

Call 1-800-MEDICARE any time day or night. Or visit

medicare.gov on the web. We’re here to help.

What you can do right now to make

an informed decision about Medicare

prescription drug coverage.
Here’s what you need to know to get started.

Private companies will offer Medicare prescription drug

coverage starting January 1, 2006. The decisions you make

depend on what kind of health care coverage you have now.

Look at the five different statements printed to the right and

select the one that best describes you. Then read the text to

learn what changes, if any, you can expect with this new

coverage, and what decisions, if any, you will have to make. 

If you have limited income and resources, extra help may be

available to help you pay for your coverage. Look for the

“extra help” section on the right-hand page of this brochure

to see if you qualify.

Joining a Medicare plan that covers prescription drugs is

voluntary. If you want coverage, you must choose to join a

plan to receive it. You can join as early as November 15, 2005

for coverage starting January 1, 2006. Just like other

insurance, if you choose not to join when you are first

eligible and later change your mind, you may have to pay 

a late enrollment penalty.

If you have any questions, call 1-800-MEDICARE or visit

www.medicare.gov. We can also tell you how to get

personalized counseling in your area from your State Health

Insurance Assistance Program, local office on aging, and

other organizations. The phone number of your local office

on aging is also available at www.eldercare.gov.

How will Medicare prescription drug

coverage affect you?

If you have any questions,

call 1-800-MEDICARE

any time, day or night.

We’re glad to help.
“I have Original Medicare only,

or Original Medicare and a

Medigap (‘Supplement’)

Policy without drug coverage.”

If you use an average amount of

prescription drugs, Medicare’s new

prescription drug coverage could

pay over half of your drug costs

next year. If you have very high

drug costs, Medicare will pay up to

95% of these costs after you spend

$3,600 out-of-pocket in a year.

What you need to do: To get this

drug coverage, you can join a

Medicare Prescription Drug Plan

that covers prescription drugs only

and keep your Original Medicare

coverage the way it is. Or you can

join a Medicare Advantage Plan or

other Medicare Health Plan that

covers doctor and hospital care as

well as prescriptions. Medicare

Advantage Plans usually give you

extra benefits and/or lower costs,

but only if you use the doctors and

hospitals that participate in the plan’s

“network.” If you do not opt for

prescription drug coverage by May

15, 2006, you will have to pay a late

enrollment penalty to get drug

coverage later.

“I have Original Medicare and 

a Medigap (‘Supplement’)

Policy with drug coverage.”

Medicare prescription drug coverage

will generally provide significant

savings compared to what you are

paying in copayments for drugs

under your Medigap plan, and

will generally provide much better

protection against high drug

expenses as well. 

What you need to do: Decide

between keeping your Medigap

policy with drug coverage or 

joining a Medicare plan that offers

prescription coverage. Look for

more information from Medicare

and the plans offering drug coverage

in your area in the fall, and compare

the drug coverage from your

Medigap plan to the new Medicare

coverage. Unlike Medigap, most of

the cost of Medicare drug coverage

is paid by Medicare, and will never

run out if you have high drug costs.

Also, if you do not join a Medicare

Drug Plan or a Medicare Advantage

Plan that offers prescription drug

coverage by May 15, 2006, you 

will have to pay a late enrollment

penalty to get drug coverage later. 

If you opt for Medicare prescription

drug coverage, tell your insurer and

the drug portion of your Medigap

policy will be removed. 

1-800-MEDICARE (1-800-633-4227) TTY 1-877-486-2048

To get started, find the statement that describes you.
“I am a retiree and I have 

drug coverage through my 

(or my spouse’s) former

employer or union.”

Medicare will help employers or

unions continue to provide retiree

drug coverage that meets Medicare’s

standard. Your former employer or

union has choices about how they

will work with Medicare. 

What you need to do: Look for

information coming from your

former employer or union this fall.

This information will

explain how they will

work with Medicare on

prescription drug coverage

and what decisions you will

have to make. If you do

not hear from them, visit

their website or call your

benefits administrator.

“I have a Medicare Advantage

Plan (like an HMO or PPO) or

other Medicare Health Plan.”

Medicare is working with Medicare

Advantage and other Medicare

Health Plans to help them provide

even more coverage and/or lower

costs. Your plan will let you know

about the prescription drug options

they will offer. You can also choose

to switch to another Medicare

Advantage Plan or Medicare Health

Plan. Or you could choose the

Original Medicare Plan and join a

Medicare Prescription Drug Plan.

What you need to do: In October,

look for information in the mail

explaining any additional

prescription drug coverage your

plan will offer.

“I have Medicare and Medicaid,

and I get my drug coverage

from Medicaid.”

Starting January 1, 2006, you will

get your prescription drug coverage

from Medicare instead of Medicaid.

The prescription drug coverage

from Medicare has no premiums,

no deductibles, and no gaps, and

you will pay very little or nothing

for almost all prescriptions.

What you need to do: Starting 

in the fall, you will need to decide

which Medicare plan that offers

prescription drug coverage you

would like. If you do not sign up 

for a plan, Medicare will sign you

up for one to make sure you do 

not miss a day of coverage. You 

can switch to a different plan if 

you choose. 

www. medicare.gov
Extra help for people

with limited income

and resources.*

Almost 1 in 3 people with Medicare 

will qualify for extra help that 

will cover between 85% and

almost 100% of the costs of their drugs.

Most people who are eligible for this

extra help will pay no premiums, no

deductibles, and no more than $5 for

each prescription.

The amount of extra help

will be based on income

and resources (including

savings and stocks, but

not counting your home

or car.) You may qualify

if your resources are less

than $11,500 if you are

single, or $23,000 if you are married

and living with your spouse.

What you need to do: People who

may qualify will receive an application in

the mail this summer from the Social

Security Administration. Or you can call

1-800-SSA-1213 for more information.

If you think you may qualify, you should

apply. Complete the application as

soon as possible. If you qualify, you will

need to join a plan this fall for your

coverage to start January 1, 2006. This

fall, Medicare and the Medicare plans

offering drug coverage in your area will

send you information, and you’ll get help

with deciding which plan works for you.

* Rules are different for people living in the territories.

Important Dates 

for Medicare Prescription 

Drug Coverage

October 2005

Watch the mail for the Medicare &

You handbook and for information

from plans in your area. And look

for community events throughout

the fall.

November 15, 2005

First day you can join a plan.

January 1, 2006

Coverage begins for those who join

by December 31, 2005.

May 15, 2006

Last day to join a plan offering

prescription drug coverage for 2006.

Questions?

Call 1-800-MEDICARE.

24 hours a day, 7 days a week. 

Or visit www.medicare.gov.

mark your calendar
Centers for Medicare & Medicaid Services

7500 Security BoulevardBaltimore MD 21244-1850

CMS Pub. No. 11146

What Medicare

Prescription Drug

Coverage Means to You

A Guide to Getting Started