Medicare Part D Frequently Asked Questions

Basic rules for the plan’s Part D drug coverage

The plan will generally cover your drugs as long as you follow these basic rules:

• You must have a network provider write your prescription.
• You must use a network pharmacy to fill your prescription.
• Your drug must be on the plan’s List of Covered Drugs (Formulary) (we call it the "Drug List" for short).
• Your drug must be considered "medically necessary," meaning reasonable and necessary for treatment of your injury or illness. It also needs to be an accepted treatment for your medical condition.

In most cases, your prescription must be from a network provider

You need to get your prescription (as well as your other care) from a provider in the plan’s provider network. This person would often be your primary care provider (your PCP). It could also be another professional in our provider network if your PCP has referred you for care.To find network providers, look in the Provider Directory.

The plan will cover prescriptions from providers who are not in the plan’s network only in a few special circumstances.

These include:

• Prescriptions you get in connection with emergency care.
• Prescriptions you get in connection with urgently needed care when network providers are not available.
• Dialysis you get when you are traveling outside of the plan’s service area. Other than these circumstances, you must have approval in advance ("prior authorization") from the plan to get coverage of a prescription from an out-of-network provider.

If you pay "out-of-pocket" for a prescription written by an out-of-network provider and you think we should cover this expense, please contact Member Services or send the bill to us for payment.

To have your prescription covered, use a network pharmacy

In most cases, your prescriptions are covered only if they are filled at the plan’s network pharmacies.

A network pharmacy is a pharmacy that has a contract with the plan to provide your covered prescription drugs. The term "covered drugs" means all of the Part D prescription drugs that are covered by the plan.

How do you find a network pharmacy in your area?

You can look in your Pharmacy Directory, visit our website at www.ccok.com, or call Member Services (phone numbers are on the cover). Choose whatever is easiest for you.

You may go to any of our network pharmacies. If you switch from one network pharmacy to another, and you need a refill of a drug you have been taking, you can ask to either have a new prescription written by a doctor or to have your prescription transferred to your new network pharmacy.

What if the pharmacy you have been using leaves the network?

If the pharmacy you have been using leaves the plan’s network, you will have to find a new pharmacy that is in the network. To find another network pharmacy in your area, you can get help from Member Services (phone numbers are on the cover) or use the Pharmacy Directory.

What if you need a specialized pharmacy?

Sometimes prescriptions must be filled at a specialized pharmacy. Specialized pharmacies include:

• Pharmacies that supply drugs for home infusion therapy.
• Pharmacies that supply drugs for residents of a long-term-care facility. Usually, a long-term care facility (such as a nursing home) has its own pharmacy. Residents may get prescription drugs through the facility’s pharmacy as long as it is part of our network. If your long-term care pharmacy is not in our network, please contact Member Services.
• Pharmacies that serve the Indian Health Service / Tribal / Urban Indian Health Program (not available in Puerto Rico). Except in emergencies, only Native Americans or Alaska Natives have access to these pharmacies in our network.
• Pharmacies that dispense certain drugs that are restricted by the FDA to certain locations, require extraordinary handling, provider coordination, or education on its use. (Note: This scenario should happen rarely.)

To locate a specialized pharmacy, look in your Pharmacy Directory or call Member Services.

Using the plan’s mail-order services

For certain kinds of drugs, you can use the plan’s network mail-order services. These drugs are marked as "maintenance" "mail-order" drugs on our plan’s Drug List. Maintenance drugs are drugs that you take on a regular basis, for a chronic or long-term medical condition.)

Our plan’s mail-order service requires you to order at least a 60-day supply of the drug and no more than a 90-day supply.

To get information about filling your prescriptions by mail, please contact Member Service or go the our website at www.ccok.com. If you use a mail-order pharmacy not in the plan’s network, your prescription will not be covered.

Usually a mail-order pharmacy order will get to you in no more than 14 days. If there is a delay in getting your mail-order prescription, please contact your mail-order pharmacy or our Member.

How can you get a long-term supply of drugs?

When you get a long-term supply of drugs, your cost sharing may be lower. The plan offers two ways to get a long-term supply of "maintenance" drugs on our plan’s Drug List. Maintenance drugs are drugs that you take on a regular basis, for a chronic or long-term medical condition.)

1. Some retail pharmacies in our network allow you to get a long-term supply of maintenance drugs. Some of these retail pharmacies may agree to the mail-order costsharing amount for a long-term supply maintenance drugs. Other retail pharmacies may not agree to accept the mail-order cost-sharing amounts for an extended supply of maintenance drugs. In this case you will be responsible for the difference in price. Your Pharmacy Directory tells you which pharmacies in our network can give you a long-term supply of maintenance drugs. You can also call Member Services for more information.
2. For certain kinds of drugs, you can use the plan’s network mail-order services. These drugs are marked as maintenance drugs on our plan’s Drug List. Our plan’s mail-order service requires you to order at least a 60-day supply of the drug and no more than a 90-day supply.

Your prescription might be covered in certain situations

We have network pharmacies outside of our service area where you can get your prescriptions filled as a member of our plan. Generally, we cover drugs filled at an out-of-network pharmacy only when you are not able to use a network pharmacy. Here are the circumstances when we would cover prescriptions filled at an out-of-network pharmacy:

• When you have a medical emergency or urgently needed care we will cover prescriptions that are filled at an out-of-network pharmacy if the prescriptions are related to care for a medical emergency or urgently needed care. In this situation, you will have to pay the full cost (rather than paying just your coinsurance or co-payment) when you fill your prescription. You can ask us to reimburse you for our share of the cost, see section "How do you ask for reimbursement from the Plan?" below.
• If you take a prescription drug on a regular basis and you are going on a trip, be sure to check your supply of the drug before you leave. When possible, take along all the medication you will need. You may be able to order your prescription drugs ahead of time through our mail order pharmacy service.
• If you are traveling within the United States and territories and become ill or run out of your prescription drugs, we will cover prescriptions that are filled at an out-of-network pharmacy. In this situation, you will have to pay the full cost (rather than paying just your coinsurance or copayment) when you fill your prescription. You will be responsible for paying the difference between what we would pay for a prescription filled at an in-network pharmacy and what the out-of-network pharmacy charged for your prescription. You can ask us to reimburse you for our share of the cost, see section "How do you ask for reimbursement from the Plan?" below.
• Prior-authorization and step-therapy requirements and quantity limits apply to prescriptions filled at an out-of-network pharmacy.

In these situations, please check first with Member Services to see if there is a network pharmacy nearby.

How do you ask for reimbursement from the plan?

If you must use an out-of-network pharmacy, you will generally have to pay the full cost (rather than paying your normal share of the cost) when you fill your prescription. You can ask us to reimburse you for our share of the cost.

The "Drug List" tells which Part D drugs are covered

The plan has a "List of Covered Drugs (Formulary)." We call it the "Drug List" for short.

The drugs on this list are selected by the plan with the help of a team of doctors and pharmacists. The list must meet requirements set by Medicare. Medicare has approved the plan’s Drug List. We will generally cover a drug on the plan’s Drug List as long as you follow the other coverage rules explained in this chapter and the drug is medically necessary, meaning reasonable and necessary for treatment of your injury or illness. It also needs to be an accepted treatment for your medical condition.

The Drug List includes both brand-name and generic drugs

A generic drug is a prescription drug that has the same active ingredients as the brand-name drug. It works just as well as the brand-name drug, but it costs less. There are generic drug substitutes available for many brand-name drugs.

What is not on the Drug list?

The plan does not cover all prescription drugs.

• In some cases, the law does not allow any Medicare plan to cover certain types of drugs (for more information about this, see Section 8.1 in this chapter).
• In other cases, we have decided not to include a particular drug on the Drug List.

There are 6 "cost-sharing tiers" for drugs on the Drug List

Every drug on the plan’s Drug List is in one of 6 cost-sharing tiers. In general, the higher the cost-sharing tier, the higher your cost for the drug:

• Tier 1 includes Select Generic Drugs
• Tier 2 includes Preferred Generic Drugs
• Tier 3 includes Preferred Brand Drugs
• Tier 4 includes Non-Preferred Brand and Generic Drugs
• Tier 5 includes Non-Special Injectable Drugs
• Tier 6 includes Specialty Drugs

To find out which cost-sharing tier your drug is in, look it up in the plan’s Drug List.

How can you find out if a specific drug is on the Drug List?

You have three ways to find out:

1. Check the most recent Drug List we sent you in the mail.
2. Visit the plan’s website www.ccok.com. The Drug List on the website is always the most current.
3. Call Member Services to find out if a particular drug is on the plan’s Drug List or to ask for a copy of the list.

Why do some drugs have restrictions?

For certain prescription drugs, special rules restrict how and when the plan covers them. A team of doctors and pharmacists developed these rules to help our members use drugs in the most effective ways. These special rules also help control overall drug costs, which keeps your drug coverage more affordable.

In general, our rules encourage you get a drug that works for your medical condition and is safe. Whenever a safe, lower-cost drug will work medically just as well as a higher-cost drug, the plan’s rules are designed to encourage you and your doctor to use that lower-cost option. We also need to comply with Medicare’s rules and regulations for drug coverage and cost sharing.

What kinds of restrictions?

Our plan uses different types of restrictions to help our members use drugs in the most effective ways. The sections below tell you more about the types of restrictions we use for certain drugs.

Using generic drugs whenever you can

A "generic" drug works the same as a brand-name drug, but usually costs less. When a generic version of a brand-name drug is available, our network pharmacies must provide you the generic version. However, if your doctor has told us the medical reason that the generic drug will not work for you, then we will cover the brand-name drug. (Your share of the cost may be greater for the brand-name drug than for the generic drug.)

Getting plan approval in advance

For certain drugs, you or your doctor need to get approval from the plan before we will agree to cover the drug for you. This is called "prior authorization." Sometimes plan approval is required so we can be sure that your drug is covered by Medicare rules. Sometimes the requirement for getting approval in advance helps guide appropriate use of certain drugs. If you do not get this approval, your drug might not be covered by the plan.

Trying a different drug first

This requirement encourages you to try safer or more effective drugs before the plan covers another drug. For example, if Drug A and Drug B treat the same medical condition, the plan may require you to try Drug A first. If Drug A does not work for you, the plan will then cover Drug B. This requirement to try a different drug first is called "Step Therapy."

Quantity limits

For certain drugs, we limit the amount of the drug that you can have. For example, the plan might limit how many refills you can get, or how much of a drug you can get each time you fill your prescription. For example, if it is normally considered safe to take only one pill per day for a certain drug, we may limit coverage for your prescription to no more than one pill per day.

Do any of these restrictions apply to your drugs?

The plan’s Drug List includes information about the restrictions described above. To find out if any of these restrictions apply to a drug you take or want to take, check the Drug List. For the most up-to-date information, call Member Services or check our website (www.ccok.com).

There are things you can do if your drug is not covered in the way you’d like it to be covered

Suppose there is a prescription drug you are currently taking, or one that you and your doctor think you should be taking. We hope that your drug coverage will work well for you, but it’s possible that you might have a problem. For example:

• What if the drug you want to take is not covered by the plan?
  For example, the drug might not be covered at all. Or maybe a generic version of the drug is covered but the brand-name version you want to take is not covered.
• What if the drug is covered, but there are extra rules or restrictions on coverage for that drug?
  Some of the drugs covered by the plan have extra rules to restrict their use. For example, you might be required to try a different drug first, to see if it will work, before the drug you want to take will be covered for you. Or there might be limits on what amount of the drug (number of pills, etc.) is covered during a particular time period.
• What if the drug is covered, but it is in a cost-sharing tier that makes your cost sharing more expensive than you think it should be?
  The plan puts each covered drug into one of 6 different cost-sharing tiers. How much you pay for your prescription depends in part on which cost-sharing tier your drug is in. There are things you can do if your drug is not covered in the way that you’d like it to be covered.

What can you do if your drug is not on the Drug List or if the drug is restricted in some way?

If your drug is not on the Drug List or is restricted, here are things you can do:

• You may be able to get a temporary supply of the drug (only members in certain situations can get a temporary supply).
• You can change to another drug.
• You can request an exception and ask the plan to cover the drug in the way you would like it to be covered.

You may be able to get a temporary supply

Under certain circumstances, the plan can offer a temporary supply of a drug to you when your drug is not on the Drug List or when it is restricted in some way. Doing this gives you time to talk with your doctor about the change in coverage and figure out what to do.

To be eligible for a temporary supply, you must meet the two requirements below:

1. The change to your drug coverage must be one of the following types of changes:
   • The drug you have been taking is no longer on the plan’s Drug List.
   • -- or -- the drug you have been taking is now restricted in some way
2. You must be in one of the situations described below:
   • For those members who are new to the plan and aren’t in a long-term care facility:

     We will cover a temporary supply of your drug one time only during the first 90 days of your membership in the plan. This temporary supply will be for a maximum of a 30- day supply, or less if your prescription is written for fewer days.

   • For those who are new members, and are residents in a long-term care facility:

     We will cover a temporary supply of your drug during the first 90 days of your membership in the plan. The first supply will be for a maximum of a 31-day supply, or less if your prescription is written for fewer days. If needed, we will cover additional refills during your first 90 days in the plan.

   • For those who have been a member of the plan for more than 90 days, and are a resident of a long-term care facility and need a supply right away:

     We will cover one 31-day supply, or less if your prescription is written for fewer days. This is in addition to the above long-term care transition supply.

   • For those members who have Level of Care changes; i.e., hospital to longterm care facility, hospital to home, Skilled Nursing Facility to home, longterm care facility to home/assisted living:

     We will cover a temporary supply of your drug one time only during the first 90 days of the transition period. This temporary supply will be for a maximum of a 30-day supply, or less if your prescription is written for fewer days.

     To ask for a temporary supply, call Member Services. During the time when you are getting a temporary supply of a drug, you should talk with your doctor to decide what to do when your temporary supply runs out. Perhaps there is a different drug covered by the plan that might work just as well for you. Or you and your doctor can ask the plan to make an exception for you and cover the drug in the way you would like it to be covered. The sections below tell you more about these options.

You can change to another drug

Start by talking with your doctor. Perhaps there is a different drug covered by the plan that might work just as well for you. You can call Member Services to ask for a list of covered drugs that treat the same medical condition. This list can help your doctor to find a covered drug that might work for you.

You can file an exception

You and your doctor can ask the plan to make an exception for you and cover the drug in the way you would like it to be covered. If your doctor or other prescriber says that you have medical reasons that justify asking us for an exception, your doctor or other prescriber can help you request an exception to the rule. For example, you can ask the plan to cover a drug even though it is not on the plan’s Drug List. Or you can ask the plan to make an exception and cover the drug without restrictions.

If you are a current member and a drug you are taking will be removed from the formulary or restricted in some way for next year, we will allow you to request a formulary exception in advance for next year. We will tell you about any change in the coverage for your drug for the following year. You can then ask us to make an exception and cover the drug in the way you would like it to be covered for the following year. We will give you an answer to your request for an exception before the change takes effect.

What can you do if your drug is in a cost-sharing tier you think is too high?

If your drug is a cost-sharing tier you think is too high, here are things you can do:

• You can change to another drug

  Start by talking with your doctor. Perhaps there is a different drug in a lower cost-sharing tier that might work just as well for you. You can call Member Services to ask for a list of covered drugs that treat the same medical condition. This list can help your doctor to find a covered drug that might work for you.

• You can file an exception

  You and your doctor can ask the plan to make an exception in the cost-sharing tier for the drug so that you pay less for the drug. If your doctor or other provider says that you have medical reasons that justify asking us for an exception, your doctor can help you request an exception to the rule.

The Drug List can change during the year

Most of the changes in drug coverage happen at the beginning of each year (January 1). However, during the year, the plan might make many kinds of changes to the Drug List. For example, the plan might:

• Add or remove drugs from the Drug List.

  New drugs become available, including new generic drugs. Perhaps the government has given approval to a new use for an existing drug. Sometimes, a drug gets recalled and we decide not to cover it. Or we might remove a drug from the list because it has been found to be ineffective.

• Move a drug to a higher or lower cost-sharing tier.
• Add or remove a restriction on coverage for a drug
• Replace a brand-name drug with a generic drug.

In almost all cases, we must get approval from Medicare for changes we make to the plan’s Drug List.

How will you find out if your drug’s coverage has been changed?

If there is a change to coverage for a drug you are taking, the plan will send you a notice to tell you. Normally, we will let you know at least 60 days ahead of time.

Once in a while, a drug is suddenly recalled because it’s been found to be unsafe or for other reasons. If this happens, the plan will immediately remove the drug from the Drug List. We will let you know of this change right away. Your doctor will also know about this change, and can work with you to find another drug for your condition.

Do changes to your drug coverage affect you right away?

If any of the following types of changes affect a drug you are taking, the change will not affect you until January 1 of the next year if you stay in the plan:

• If we move your drug into a higher cost-sharing tier.
• If we put a new restriction on your use of the drug.
• If we remove your drug from the Drug List, but not because of a sudden recall or because a new generic drug has replaced it.

If any of these changes happens for a drug you are taking, then the change won’t affect your use or what you pay as your share of the cost until January 1 of the next year. Until that date, you probably won’t see any increase in your payments or any added restriction to your use of the drug. However, on January 1 of the next year, the changes will affect you.

In some cases, you will be affected by the coverage change before January 1:

• If a brand-name drug you are taking is replaced by a new generic drug, the plan must give you at least 60 days’ notice or give you a 60-day refill of your brand-name drug at a network pharmacy.
  • During this 60-day period, you should be working with your doctor to switch to the generic or to a different drug that we cover.
  • Or you and your doctor or other prescriber can ask the plan to make an exception and continue to cover the brand-name drug for you.
• Again, if a drug is suddenly recalled because it’s been found to be unsafe or for other reasons, the plan will immediately remove the drug from the Drug List. We will let you know of this change right away.
  • Your doctor will also know about this change, and can work with you to find another drug for your condition.

Types of drugs we do not cover

This section tells you what kinds of prescription drugs are "excluded." Excluded means that the plan doesn’t cover these types of drugs because the law doesn’t allow any Medicare drug plan to cover them.

If you get drugs that are excluded, you must pay for them yourself. We won’t pay for the drugs that are listed in this section (unless our plan covers certain excluded drugs). The only exception:

If the requested drug is found upon appeal to be a drug that is not excluded under Part D and we should have paid for or covered because of your specific situation.

Here are three general rules about drugs that Medicare drug plans will not cover under Part D:

• Our plan’s Part D drug coverage cannot cover a drug that would be covered under Medicare Part A or Part B.
• Our plan cannot cover a drug purchased outside the United States and its territories.
• "Off-label use" is any use of the drug other than those indicated on a drug’s label as approved by the Food and Drug Administration.
  • Generally, coverage for "off-label use" is allowed only when the use is supported by certain reference books. These reference books are the American Hospital Formulary Service Drug Information, the DRUGDEX Information System, and the USPDI or its successor. If the use is not supported by any of these reference books, then our plan cannot cover its "off-label use."

Also, by law, these categories of drugs are not covered by Medicare drug plans unless we offer enhanced drug coverage, for which you may be charged additional premium:

• Non-prescription drugs (also called over-the-counter drugs)
• Drugs when used to promote fertility
• Drugs when used for the relief of cough or cold symptoms
• Drugs when used for cosmetic purposes or to promote hair growth
• Prescription vitamins and mineral products, except prenatal vitamins and fluoride preparations
• Drugs when used for the treatment of sexual or erectile dysfunction, such as Viagra, Cialis, Levitra, and Caverject
• Drugs when used for treatment of anorexia, weight loss, or weight gain
• Outpatient drugs for which the manufacturer seeks to require that associated tests or monitoring services be purchased exclusively from the manufacturer as a condition of sale
• Barbiturates and Benzodiazepines

If you receive extra help paying for your drugs, your state Medicaid program may cover some prescription drugs not normally covered in a Medicare drug plan. Please contact your state Medicaid program to determine what drug coverage may be available to you.

Show your membership card when you fill a prescription

To fill your prescription, show your plan membership card at the network pharmacy you choose. When you show your plan membership card, the network pharmacy will automatically bill the plan for our share of your covered prescription drug cost. You will need to pay the pharmacy your share of the cost when you pick up your prescription.

What if you don’t have your membership card with you?

If you don’t have your plan membership card with you when you fill your prescription, ask the pharmacy to call the plan to get the necessary information.

If the pharmacy is not able to get the necessary information, you may have to pay the full cost of the prescription when you pick it up. (You can then ask us to reimburse you for our share.

What if you’re in a hospital or a skilled nursing facility for a stay that is covered by the plan?

If you are admitted to a hospital or to a skilled nursing facility for a stay covered by the plan, we will generally cover the cost of your prescription drugs during your stay. Once you leave the hospital or skilled nursing facility, the plan will cover your drugs as long as the drugs meet all of our rules for coverage. See the previous parts of this section that tell about the rules for getting drug coverage.

Please Note: When you enter, live in, or leave a skilled nursing facility, you are entitled to a special enrollment period. During this time period, you can switch plans or change your coverage at any time.

What if you’re a resident in a long-term care facility?

Usually, a long-term care facility (such as a nursing home) has its own pharmacy, or a pharmacy that supplies drugs for all of its residents. If you are a resident of a long-term care facility, you may get your prescription drugs through the facility’s pharmacy as long as it is part of our network.

Check your Pharmacy Directory to find out if your long-term care facility’s pharmacy is part of our network. If it isn’t, or if you need more information, please contact Member Services.

What if you’re a resident in a long-term care facility and become a new member of the plan?

If you need a drug that is not on our Drug List or is restricted in some way, the plan will cover a temporary supply of your drug during the first 90 days of your membership. The first supply will be for a maximum of a 31-day supply, or less if your prescription is written for fewer days.

If needed, we will cover additional refills during your first 90 days in the plan. If you have been a member of the plan for more than 90 days and need a drug that is not on our Drug List or if the plan has any restriction on the drug’s coverage, we will cover one 31-day supply, or less if your prescription is written for fewer days. During the time when you are getting a temporary supply of a drug, you should talk with your doctor or other prescriber to decide what to do when your temporary supply runs out. Perhaps there is a different drug covered by the plan that might work just as well for you. Or you and your doctor can ask the plan to make an exception for you and cover the drug in the way you would like it to be covered.

What if you’re also getting drug coverage from an employer or retiree group plan?

Do you currently have other prescription drug coverage through your (or your spouse’s) employer or retiree group? If so, please contact that group’s benefits administrator. He or she can help you determine how your current prescription drug coverage will work with our plan.

In general, if you are currently employed, the prescription drug coverage you get from us will be secondary to your employer or retiree group coverage. That means your group coverage would pay first.

Special note about "creditable coverage":

Each year your employer or retiree group should send you a notice by November 15 that tells if your prescription drug coverage for the next calendar year is "creditable" and the choices you have for drug coverage.

If the coverage from the group plan is "creditable," it means that it has drug coverage that pays, on average, at least as much as Medicare’s standard drug coverage.

Keep these notices about creditable coverage, because you may need them later. If you enroll in a Medicare plan that includes Part D drug coverage, you may need these notices to show that you have maintained creditable coverage. If you didn’t get a notice about creditable coverage from your employer or retiree group plan, you can get a copy from your employer or retiree plan’s benefits administrator or the employer or union.

Programs to help members use drugs safely

We conduct drug use reviews for our members to help make sure that they are getting safe and appropriate care. These reviews are especially important for members who have more than one provider who prescribes their drugs. We do a review each time you fill a prescription. We also review our records on a regular basis.

During these reviews, we look for potential problems such as:

• Possible medication errors.
• Drugs that may not be necessary because you are taking another drug to treat the same medical condition.
• Drugs that may not be safe or appropriate because of your age or gender.
• Certain combinations of drugs that could harm you if taken at the same time.
• Prescriptions written for drugs that have ingredients you are allergic to.
• Possible errors in the amount (dosage) of a drug you are taking.

If we see a possible problem in your use of medications, we will work with your doctor to correct the problem.

Programs to help members manage their medications

We have programs that can help our members with special situations. For example, some members have several complex medical conditions or they may need to take many drugs at the same time, or they could have very high drug costs.

These programs are voluntary and free to members. A team of pharmacists and doctors developed the programs for us. The programs can help make sure that our members are using the drugs that work best to treat their medical conditions and help us identify possible medication errors.

If we have a program that fits your needs, we will automatically enroll you in the program and send you information. If you decide not to participate, please notify us and we will withdraw your participation in the program.

Did you know there are programs to help people pay for their drugs?

There are programs to help people with limited resources pay for their drugs. The "Extra Help" program helps people with limited resources pay for their drugs.

What are the 3 drug payment stages?

As shown in the table below, there are 3 "drug payment stages" for your prescription drug coverage. How much you pay for a drug depends on which of these stages you are in at the time you get a prescription filled or refilled. Keep in mind you are always responsible for the plan’s monthly premium regardless of the drug payment stage.

Stage 1	Initial Coverage Stage The plan pays its share of the cost of your drugs and you pay your share of the cost.You stay in this stage until your payments for the year plus the plan’s payments total $2,830.
Stage 2	Coverage Gap Stage You pay the full cost of your drugs.You stay in this stage until your "out-of-pocket costs" reach a total of $4,550. This amount and rules for counting costs toward this amount have been set by Medicare.
Stage 3	Catastrophic Coverage Stage Once you have paid enough for your drugs to move on to this last payment stage, the plan will pay most of the cost of your drugs for the rest of the year. As shown in this summary of the 3 payment stages, whether you move on to the next payment stage depends on how much you and/or the plan spends for your drugs while you are in each stage.

We send you a monthly report called the "Explanation of Benefits"

Our plan keeps track of the costs of your prescription drugs and the payments you have made when you get your prescriptions filled or refilled at the pharmacy. This way, we can tell you when you have moved from one drug payment stage to the next. In particular, there are two types of costs we keep track of:

• We keep track of how much you have paid. This is called your "out-of-pocket" cost.
• We keep track of your "total drug costs." This is the amount you pay out-of-pocket or others pay on your behalf plus the amount paid by the plan.

Our plan will prepare a written report called the Explanation of Benefits (it is sometimes called the "EOB") when you have had one or more prescriptions filled. It includes:

• Information for that month. This report gives the payment details about the prescriptions you have filled during the previous month. It shows the total drug costs, what the plan paid, and what you and others on your behalf paid.
• Totals for the year since January 1. This is called "year-to-date" information. It shows you the total drug costs and total payments for your drugs since the year began.

The plan has 6 cost-sharing tiers

Every drug on the plan’s Drug List is in one of 6 cost-sharing tiers. In general, the higher the cost-sharing tier number, the higher your cost for the drug:

• Tier 1 includes Select Generic Drugs
• Tier 2 includes Preferred Generic Drugs
• Tier 3 includes Preferred Brand Drugs
• Tier 4 includes Non-Preferred Brand or Generic Drugs
• Tier 5 includes Non-Special Injectable Drugs
• Tier 6 includes Specialty Drugs

To find out which cost-sharing tier your drug is in, look it up in the plan’s Drug List.

Your pharmacy choices may determine how much you pay for a drug

How much you pay for a drug depends on whether you get the drug from:

• A retail pharmacy that is in our plan’s network
• A pharmacy that is not in the plan’s network
• The plan’s mail-order pharmacy

What is the Part D "late enrollment penalty"?

You may pay a financial penalty if you did not enroll in a plan offering Medicare Part D drug coverage when you first became eligible for this drug coverage or you experienced a continuous period of 63 days or more when you didn’t keep your prescription drug coverage. The amount of the penalty depends on how long you waited before you enrolled in drug coverage after you became eligible or how many months after 63 days you went without drug coverage.

The penalty is added to your monthly premium. (Members who choose to pay their premium every three months will have the penalty added to their three-month premium.) When you first enroll in Senior Health Plan, we let you know the amount of the penalty.

How much is the Part D late enrollment penalty?

Medicare determines the amount of the penalty. Here is how it works:

• First count the number of full months that you delayed enrolling in a Medicare drug plan, after you were eligible to enroll. Or count the number of full months in which you did not have credible prescription drug coverage, if the break in coverage was 63 days or more.
  
  The penalty is 1% for every month that you didn’t have creditable coverage. For our example, let’s say it is 14 months without coverage, which will be 14%.
• Then Medicare determines the amount of the average monthly premium for Medicare drug plans in the nation from the previous year. For 2010, this average premium amount is $31.94.
• You multiply together the two numbers to get your monthly penalty and round it to the nearest 10 cents. In the example here it would be 14% times $31.94, which equals $4.47, which rounds to $4.50. This amount would be added to the monthly premium for someone with a late enrollment penalty.

There are three important things to note about this monthly premium penalty:

• First, the penalty may change each year, because the average monthly premium can change each year. If the national average premium (as determined by Medicare) increases, your penalty will increase.
• Second, you will continue to pay a penalty every month for as long as you are enrolled in a plan that has Medicare Part D drug benefits.
• Third, if you are under 65 and currently receiving Medicare benefits, the late enrollment penalty will reset when you turn 65. After age 65, your late enrollment penalty will be based only on the months that you don’t have coverage after your initial enrollment period for Medicare.

If you are eligible for Medicare and are under 65, any late enrollment penalty you are paying will be eliminated when you attain age 65. After age 65, your late enrollment penalty is based only on the months you do not have coverage after your Age 65 Initial Enrollment Period.

In some situations, you can enroll late and not have to pay the penalty

Even if you have delayed enrolling in a plan offering Medicare Part D coverage when you were first eligible, sometimes you do not have to pay the late enrollment penalty.

You will not have to pay a premium penalty for late enrollment if you are in any of these situations:

• You already have prescription drug coverage at least as good as Medicare’s standard drug coverage. Medicare calls this "creditable drug coverage." Creditable coverage could include drug coverage from a former employer or union, TRICARE, or the Department of Veterans Affairs. Speak with your insurer or your human resources department to find out if your current drug coverage is as at least as good as Medicare’s.
• If you were without creditable coverage, you can avoid paying the late enrollment penalty if you were without it for less than 63 days in a row.
• If you didn’t receive enough information to know whether or not your previous drug coverage was creditable.
• You lived in an area affected by Hurricane Katrina at the time of the hurricane (August 2005) – and – you signed up for a Medicare prescription drug plan by December 31, 2006 – and – you have stayed in a Medicare prescription drug plan.
• You are receiving "Extra Help" from Medicare.

What can you do if you disagree about your late enrollment penalty?

If you disagree about your late enrollment penalty, you can ask us to review the decision about your late enrollment penalty. Call Member Services at the number on the front of this booklet to find out more about how to do this.