Medicare Weekly News #12 for November 29, 2005

Media Relations: Tel: 202-326-1816


Note: Medicare Weekly News (MWN) is a weekly series for newsmakers nationwide brought to you by the Medicare Rx Education Network. MWN provides important information about a timely topic on the Medicare prescription drug benefit; it will be distributed to newsrooms each Monday. For questions about the Network, please contact Brian Franklin at 202-312-1098.

Are You a Retiree in Medicare? Do You Have Healthcare Coverage from a Former Employer?

If you are in Medicare and also have healthcare coverage through a company or union retiree healthcare plan, this information is important for you.

Now that Medicare is offering prescription drug coverage (it begins January 1), a company/union retiree healthcare plan has a few options.

It can decide to continue offering its drug coverage (if it does so already), change its drug coverage, add drug coverage, or even drop it all together. By now, you should have received a letter from your retiree healthcare plan letting you know what it is offering, notifying you about any changes, and (in some cases) asking you to make a decision.

Some companies and unions are requiring a response by as early as December 2, and many by the end of December. That’s because some employers operate their retiree health plan on a calendar-year basis, bringing their 2005 retiree healthcare benefit period to an end December 31 and starting the new one January 1.

Among the options that a company or union retiree healthcare plans may offer:

  • If it currently covers drugs, it may continue to do so.

  • It may offer you the option of dropping its drug coverage (and joining a Medicare drug plan), without losing any other health insurance benefits it offers.

  • It could end the healthcare coverage all together if you decide to opt out of its drug coverage – an all or nothing arrangement. So be cautious.

  • If it doesn’t cover drugs now, it may decide to supplement its plan with the new Medicare prescription drug coverage.

  • It could drop its drug coverage but wrap around Medicare’s drug coverage, filling in deductibles, copayments, and/or coverage gaps.

    The letter from your retiree health plan spells out your options for future prescription drug coverage. It also tells you whether its current drug coverage (if it is offering it now) is as good as or better than Medicare’s (“creditable coverage”). Be sure to review the information in that letter carefully.

    What should you do? Here are some tips.

  • Creditable coverage: If, in the letter, your employer says its drug coverage is as good as or better than Medicare’s, the Medicare agency suggests that you consider sticking with it. (If in the future, you choose to join a Medicare prescription drug plan, you will pay no late-enrollment penalty.) If you don’t have the option to just drop your current drug coverage and you end up dropping the entire plan, be cautious. You may not be able to get that health coverage back.

  • Decision deadlines: For those in a retiree healthcare plan that operates on a calendar-year basis: If you are opting out of your company’s drug coverage and into the Medicare drug prescription plan, you need to act now. Your shopping days are numbered. If you choose to opt out of your employer/union’s drug coverage (which would end at the end of December) and into Medicare’s, but don’t choose a Medicare Rx plan soon (by December 31), you may experience a lapse in drug coverage.
    If your employer drops its drug coverage, but has decided to wrap around Medicare's drug coverage, make sure you sign up for a Medicare Rx plan, and sign up before December 31. That way, the wrap around and Medicare's drug coverage will begin at the same time (January 1).
  • Options assistance: If you’re unsure about what your company/union retiree healthcare plan has decided to do regarding drug coverage, or about its deadline, call its benefits administrator. In fact, if you have any questions at all, your company’s or union’s benefits administrator is the person to contact. He or she is prepared to help you explore all your options, so that you can make an informed choice.

  • Don't put this off. In fact, put it at the top of your to-do list. You'll go into the holidays with greater peace of mind.


    The Medicare Rx Education Network provides information and assistance with outreach and enrollment for the new Medicare Part D prescription drug benefit. The network, which includes 70 national organizations, is chaired by former U.S. Senator John Breaux. Members share an interest in educating Medicare beneficiaries about the new Medicare prescription drug benefit and work closely with the appropriate federal agencies to obtain up-to-date information to ensure that information disseminated by the network about Medicare Part D is factual and accurately conveyed, thereby pre-empting confusion about the benefit and equipping beneficiaries and their caregivers to make informed choices. By sharing information with each other about member organizations’ independent efforts, collaborating on activities, and identifying ways to work together, the network aims to eliminate duplication of efforts and maximize the effectiveness of outreach efforts. The network does not engage in legislative activities or take positions on pending legislative or administrative policies related to the Part D benefit and its implementation.

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