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People with Medicare in New Jersey will have a range of choices for prescription drug coverage to suit their individual needs, including plans that help save money or offer more coverage than Medicare’s standard drug benefit, the Centers for Medicare & Medicaid Services (CMS) announced today.


“Medicare drug coverage is coming with lower costs and better coverage options than many people expected, and there will be help available locally and nationally to assist people in making a decision,” HHS Secretary Mike Leavitt said.


“Everyone in Medicare who lives in New Jersey , no matter what their income or how they get their health care, can choose coverage that reflects what they want, including lower cost, more complete coverage, and convenient access,” said CMS Administrator Mark B. McClellan, M.D., Ph.D.


Medicare beneficiaries in traditional Medicare can add “stand-alone” drug coverage.  Or they can get additional coverage and even more savings are available in Medicare Advantage health plans.   Those plans provide all Medicare benefits through health plans like HMOs and PPOs.


For example, the lower cost choice could be a stand-alone plan with a low premium and low prices for a beneficiary’s drugs.   The more complete coverage choice could be a drug plan that offers coverage for generic drugs and in some cases even brand-name drugs through the “coverage gap” in the standard Medicare benefit, a plan with no deductible, and a plan that covers almost all of the commonly used drugs.   And for convenient access, a beneficiary can choose a plan that provides coverage through their own preferred pharmacies.


Medicare beneficiaries in New Jersey  who choose a stand-alone plan can get coverage for as little as $4.43 a month.   Many plans in New Jersey will also offer coverage with reduced or no deductible.   Other plans will offer coverage that goes beyond Medicare’s coverage limits.  That coverage could include flat copays or “tiers” of drug payments.  In that, a plan might offer generic drugs for one rate, preferred brand-name drugs for slightly more, and most other brand-name drugs for a slightly higher charge. 


For New Jersey , the 2006 Medicare Advantage options include 9 plans where the total monthly premium, not including the Part B premium, for Medicare’s medical and hospital coverage, the drug coverage, and additional coverage beyond Medicare’s standard benefits, is zero. Medicare Advantage plans will provide drug coverage on top of a package of health benefits that often go far beyond Medicare’s standard coverage.  In the original Medicare program, beneficiaries would have to pay premiums for Part B, Part D, and a Medigap plan to fill in some of the gaps in Medicare coverage.  Including Medigap, these premium costs can easily amount to several hundred dollars per month.


Many of the Medicare Advantage plans offer prescription drug coverage at least equal to stand-alone plans for no additional prescription drug premium.   For the total Medicare Advantage premium, beneficiaries generally get additional benefits that lead to more savings, compared to traditional Medicare either without supplemental coverage or with a Medigap plan that has an additional premium.   Beneficiaries in Medicare Advantage now save an average of about $100 in out-of-pocket costs compared to traditional Medicare.


The stand-alone prescription drug coverage and the Medicare Advantage coverage include many plans with very broad formularies.  Next month, Medicare will provide specific information on the formularies and the costs of drugs in the formularies.


All approved prescription drug plans and Medicare Advantage plans meet Medicare’s requirements for providing access to medically necessary drugs, including formulary standards as well as standards for access to convenient retail pharmacies and to drugs in nursing homes.   The plans are required to provide coverage at least as good as Medicare’s standard coverage, which pays on average 75 percent of drug costs after a $250 deductible up to $2,250 in total drug spending.   The coverage also pays approximately 95 percent after $3,600 in out-of-pocket costs to protect against very high drug expenses.  This means that for a monthly premium that is lower than expected, Medicare would pay more than half of a typical beneficiary’s drug costs, or more than $1,100.   Medicare beneficiaries will have access to plans that cover much more than the standard benefit, as noted above.


Enrollment for Medicare’s prescription drug coverage runs from November 15 through May 15, 2006.   Coverage begins on January 1 if a beneficiary enrolls before then.  After that, coverage begins on the first day of the month after a beneficiary enrolls.


Medicare will provide comprehensive support to help beneficiaries make a confident decision about drug coverage.   That support includes community-based resources offering personalized counseling, materials on and through 1-800-MEDICARE, and the Medicare & You handbook with information about coverage in the local area.