Medicare Changes 2006

Information about the changes you will see in 2006

Medicare premium increases are at a lower rate in 2006 than in 2005, though they still are higher than the annual rate of inflation. Changes this year include:

1. Medicare Prescription Drug Plan (Medicare Part D)
   You will pay a monthly premium for Medicare Part D with the average cost being around $35.00. You will also have a $250 deductible. There will be a 25 percent co-payment on total prescription cost.

   If, for example your medicine costs $100, you will have to pay $25 each time you get it filled. Once you spend $2250 for drugs in a year, you will have a gap in coverage. For drugs over that amount you will pay full price until you have spent $5100 on prescription drugs in that same year. Once you reach that amount your prescriptions will cost either a 5 percent co-pay or $5 for brand, whichever is higher.Low income Medicare recipients will receive additional assistance.

2. Lock-In
   Starting in 2006, if you enroll in a Medicare Advantage plan (HMO or PPO) you will be locked into that plan and only able to change during specified enrollment periods:
   - Once during the Open Enrollment Period—January 1 through June 30 in 2006; January 1 through March 31 from 2007 on. Your new coverage starts the first of the month after you enroll.
   - Once during the Annual Coordinated Election Period—November 15 through December 31 of every year. Your new coverage starts the following January.
   During these enrollment periods you can switch from traditional Medicare to a Medicare private health plan (HMO, PPO or Private Fee For Service Plan), from a Medicare private health plan back to traditional Medicare, or from one Medicare private health plan to another.

   If your Medicare private health plan leaves your area or you move out of your plan's service area, you will be given a Special Enrollment Period to switch to another private health plan or to Original Medicare no matter what time of the year it is.

3. Cap on Outpatient Therapy
   Currently Medicare has no cap on outpatient therapy coverage as long as it is considered medically necessary. Beginning in 2006 the maximum Medicare will pay for physical and speech-language therapy combined is approximately $1,750. It will cover up to another $1,750 for occupational therapy. These limits apply to outpatient therapy received at
   -therapists or doctors offices
   -outpatient rehabilitation facilities
   -skilled nursing facilities for outpatients or residents who do not have Medicare-covered stays -home, through therapists connected with home health agencies, when not part of a Medicare-covered health benefit.

4. Annual Cost Increases
   - Monthly Part B Premium - from $78.20 (2005) per month to $88.50(2006) per month
   - Part B Deductible - from $110 (2005) to $124(2006) annually (You pay 20% of the Medicare-approved amount for services after you meet the $110.00 deductible.)
   - Inpatient Hospital Care:
   *$912 (2005) for a hospital stay of 1-60 days to $952(2006)
   *$228(2005 per day for days 61-90 of a hospital stay to $238 (2006)
   *$456 (2005)per day for days 91-150 of a hospital stay to $476 (2006)(Lifetime Reserve Days)
   *All costs for each day beyond 150 days
   - Skilled Nursing Facility Care
   No coinsurance for days 1-20
   $114.00 per day for days 21 through 100 each benefit period to $119.

5. Medigap Polices
   Medigap plans with prescription drug coverage will no longer be sold after 2005. If you have one of these plans you can continue but you may find that changing to another plan along with the Medicare Part D drug plan may be more cost effective. There are also two new plans with lower premiums that require you pay a portion of your cost for Medicare covered services until you reach an out-of-pocket cost cap. Once you have reached the cap you will have 100% coverage.

Information added 11/25/05 with information from Medicare