Medicare Prescription Drug Coverage Retiree Town Hall Presentation

Medicare Prescription Drug Coverage Retiree Town Hall Presentation: Comparing Prescription Drug Coverage As of August 18, 2004 November 2005 August 18, 2004 Oak Ridge Retiree Town Hall Meeting #2

Today’s Agenda n What’s happening? n Why we’re here today n Considerations as you evaluate coverage n Comparing your Oak Ridge retiree prescription drug coverage to local provider plans n Considerations for limited income and resources individuals n What happens next? Oak Ridge Retiree Town Hall Meeting #2 1

What’s Happening? Oak Ridge Retiree Town Hall Meeting #2 2

What’s Happening? n Medicare Prescription Drug, Improvement, and Modernization Act of 2003 — or the Medicare Modernization Act (MMA) — signed into law on December 8, 2003 n Effective January 1, 2006, Medicare will provide optional prescription drug coverage called Medicare Part D n It replaces prescription drug discount card, which will phase out by May 15, 2006 n Beginning November 15, anyone with Medicare is eligible to enroll for this coverage n Legislation encourages employers to continue to be the primary provider of prescription drug benefits for their Medicare-eligible population Oak Ridge Retiree Town Hall Meeting #2 3

What’s Happening? (cont. ) n The benefits of this legislation include: n Offers prescription drug coverage to Medicare beneficiaries who don’t have access to adequate prescription drug coverage today n Provides enhanced benefits with lower out-of-pocket costs to limitedincome beneficiaries, as defined by the government n Gives employers the choice to continue to be the primary provider of prescription drug benefits ― not intended to replace employersponsored coverage that’s as generous or more generous Oak Ridge Retiree Town Hall Meeting #2 4

What’s Happening? (cont. ) n Oak Ridge will continue to offer the current prescription drug coverage, which is as generous as or more generous than Medicare Part D for 2006 n Anyone who participates in an Oak Ridge retiree medical plan receives prescription drug coverage automatically n Oak Ridge prescription drug coverage does not coordinate with Medicare Part D coverage n This means, for most Medicare-eligible Oak Ridge employees and retirees, enrolling in Medicare Part D will not provide additional benefits n If you are a Medicare-eligible retiree or LTD recipient enrolled in Oak Ridge coverage and you elect Medicare drug coverage, your Oak Ridge medical and prescription drug coverage will be cancelled Oak Ridge Retiree Town Hall Meeting #2 5

Why We’re Here Today n By now, you may have received mailings from a number of carriers who want to offer you prescription drug coverage n These mailings will encourage you to enroll “just to be safe” n The companies sending you these mailings do not know that you already have prescription drug coverage through Oak Ridge — They are mailing to all Medicare-eligible individuals n Oak Ridge wants you to understand: n What Medicare drug coverage means to you as a Medicare-eligible Oak Ridge retiree or employee n That your current prescription drug coverage is as generous as or more generous than the standard Medicare coverage n Enrolling in Medicare Part D will not offer any additional benefits, although there are some exceptions n Enrolling in private Medicare prescription drug coverage for 2006 will jeopardize your Oak Ridge-provided coverage Oak Ridge Retiree Town Hall Meeting #2 6

Considerations As You Evaluate Coverage Oak Ridge Retiree Town Hall Meeting #2 7

Medicare Part D Terminology n Terms and abbreviations: n CMS – Centers for Medicare and Medicaid Services n Medicare Part D – also refers to Medicare prescription drug coverage n “As generous as or more generous than” – the Medicare phrase applied n n to employer-provided coverage that offers a benefit comparable to (or better than) the standard Medicare Part D coverage Creditable Coverage – verification that an individual has coverage that is as generous as or more generous than standard Medicare Part D coverage Formulary – a specific list of drugs that are considered “covered” by a health plan or prescription drug plan Limited Income and Resources – individuals who meet specific criteria established by CMS that qualify them for extra assistance through CMS Tr. OOP – True out-of-pocket maximum that is defined as the amount of outof-pocket costs a retiree would expect to pay if enrolled in a Medicare Part D plan, not including monthly premiums or out-of-pocket costs for catastrophic coverage Oak Ridge Retiree Town Hall Meeting #2 8

Considering Other Prescription Drug Coverage n As mentioned, choosing Medicare prescription drug coverage will jeopardize your Oak Ridge retiree medical coverage n However, we understand that you will receive mailings from many providers offering coverage and you may want to compare those plans with your Oak Ridge retiree medical coverage n To help you, we’ll be comparing some of the plans offered in our area during today’s session n In evaluating coverage, we’ll be asking these questions: n Does the plan cover all my drugs? n How much will this plan cost me? n Does the plan have a coverage gap? n How does the plan limit my out-of-pocket expenses? n Is my pharmacy in the network? n Does the plan offer mail order? Oak Ridge Retiree Town Hall Meeting #2 9

Does The Plan Cover All Of My Drugs? n Many plans have formularies, which limit the drugs that are covered under the plan n All of the Medicare prescription drug plans include a formulary n In most cases, these formularies limit the number of drugs offered under each class of drugs and may cover a generic rather than brandname drug n We will not cover specific formularies for each of the plans today n Contact each provider if you’d like more information about their formulary n Your Oak Ridge prescription drug coverage does not include a formulary Oak Ridge Retiree Town Hall Meeting #2 10

How Much Will This Plan Cost Me? n The first consideration will be the premium or contribution for joining the plan n The national average cost of Medicare prescription drug plans is $32 per month, but prices will vary, depending on the level of coverage provided in each plan — increased coverage will generally cost more n The next consideration is the deductible that must be met before coverage will begin n Most plans require that you pay the full cost up to a certain dollar limit, after which the plan’s benefits begin n The standard Medicare prescription drug plan includes a $250 annual deductible n Your Oak Ridge prescription drug coverage requires a $150 deductible for retail pharmacy prescriptions Oak Ridge Retiree Town Hall Meeting #2 11

How Much Will This Plan Cost Me? (continued) n Finally, consider what you may pay, in coinsurance or copays, each time you obtain a prescription n Coinsurance is a percentage of the cost — The standard Medicare prescription drug plan includes 25% coinsurance on total annual drug costs up to $2, 250 and 5% of the cost after you have spent $3, 600 out-of-pocket — Your Oak Ridge prescription drug coverage includes coinsurance for prescription drugs obtained through a retail pharmacy n Copays are a fixed dollar amount — For example, generic drug copays through a mail order program may cost $25 for a 90 -day supply — Your Oak Ridge prescription drug coverage includes copays for prescription drugs obtained through mail order Oak Ridge Retiree Town Hall Meeting #2 12

Does The Plan Have A Coverage Gap? n A coverage gap – or “doughnut hole” – is like a second deductible n When your total prescription drug costs reach a certain level, you assume the full cost of prescription drugs n You pay for prescription drugs up to another limit of out-of-pocket expenses, upon which the coverage gap closes n The standard Medicare prescription drug coverage plan has a coverage gap that takes effect when your total prescription drug expenses reach $2, 250 n The standard Medicare plan resumes paying benefits when you reach a total of $3, 600 in out of pocket expenses n Your Oak Ridge prescription drug coverage does not have a coverage gap Oak Ridge Retiree Town Hall Meeting #2 13

How Does The Plan Limit My Out-of-Pocket Expenses? n A plan may include an out-of-pocket maximum that will limit the amount you pay in coinsurance toward prescription drugs in a given year n The standard Medicare prescription drug coverage has an out-of- pocket maximum of $3, 600 each year, after which Medicare catastrophic coverage begins n When you reach that threshold, your coinsurance is reduced from 25% to 5% for prescription drugs for the remainder of that calendar year n Your Oak Ridge prescription drug coverage does not have an out-of- pocket maximum Oak Ridge Retiree Town Hall Meeting #2 14

Is My Pharmacy In The Network? n Participating pharmacies vary by plan n You will need to refer to the materials you receive from the insurers offering Medicare prescription drug plans in your area n You should also confirm participation with your local or preferred pharmacy Oak Ridge Retiree Town Hall Meeting #2 15

Does The Plan Offer Mail Order? n Mail order availability will vary by plan as well n Confirm that mail order is an option and verify how you can submit prescriptions as well as how prescriptions are mailed to you n In some cases, plans allow you to purchase up to a 90 -day supply of your medication through a participating retail pharmacy in addition to mail order Oak Ridge Retiree Town Hall Meeting #2 16

Let’s stop for a minute to see if there any questions? Oak Ridge Retiree Town Hall Meeting #2 17

Comparing Your Oak Ridge Retiree Prescription Drug Coverage to Local Provider Plans Oak Ridge Retiree Town Hall Meeting #2 18

2006 Prescription Drug Coverage for Oak Ridge Retirees: Snapshot of Benefits under the Retiree Medical Plan Deductible: For In-Network Pharmacy For Non-Network Pharmacy Oak Ridge Retiree Town Hall Meeting #2 Retail (up to a 30 day supply) Mail Order (up to a 90 day supply) $150 $0 COINSURANCE Brand name: Plan pays 70% Participant pays 30% (minimum $10) Generic: Plan pays 80% Participant pays 20% (minimum $10) COPAYMENT Brand name: $35 Generic: $15 COINSURANCE Brand name: Plan pays 50% Participant pays 50% Generic: Plan pays 50% Participant pays 50% 19

Standard Medicare Part D Drug Benefit: A Visual Retiree pays 100% of first $250 Retiree pays 25% of next $2, 000, up to $500 0% Retiree pays 5% (no maximum) Plan pays 95% $250 Part D benefits $2, 250 Annual drug costs Catastrophic Benefit Coinsurance 50% 25% Retiree pays 100% of next $2, 850, up to $3, 600 total out-of-pocket limit Plan pays 75% Deductible Coinsurance 75% $250 Coverage Gap (“Donut Hole”) 100% Retiree out-of-pocket costs $3, 600 $750 $5, 100 Retiree liability (counts toward $3, 600 true out-of-pocket maximum (Tr. OOP)* *Tr. OOP is “true out-of-pocket” maximum — amount retiree must pay before catastrophic (95%) benefit begins. Employer and insurance company payments do not count toward satisfaction of Tr. OOP. Oak Ridge Retiree Town Hall Meeting #2 20

Comparing Medicare Prescription Drug Plans n We’ll be comparing the following plans: n Aetna Medicare Rx Essentials, Plus and Premium Plans n Community Care Rx Basic, Choice and Gold Plans n Coventry Advantra. Rx Value, Premier and Premier Plus Plans n Humana PDP Standard, Enhanced and Complete Plans n AARP Medicare Rx by United. Healthcare n Please note that we have used each of the plan’s summary of benefits to create this comparison n We cannot answer specific details about any of the plans, with the exception of your Oak Ridge coverage n These comparisons were created using information that we believe to be current and accurate; however, you should contact each of the providers directly for the most up-to-date information on any of the plans discussed during today’s session Oak Ridge Retiree Town Hall Meeting #2 21

Comparing Oak Ridge Coverage to Aetna Medicare Prescription Drug Plans Oak Ridge Aetna Medicare Rx Essentialssm Aetna Medicare Rx Plussm Aetna Medicare Rx Premiersm Included in your Retiree Medical contributions $38. 86 $50. 45 $66. 75 Annual Deductible $150 (retail only) $250 (retail and mail order) $0 $0 Coinsurance or Copayment for prescription drugs obtained at participating retail pharmacy (30 day supply) Brand name: Plan pays 70% You pay 30% (minimum $10) Generic: Plan pays 80% You pay 20% (minimum $10) Brand name: $25 copay Brand name: $35 copay Generic: $7 copay Non-Preferred Brand name: $40 copay Monthly Premium Person Coinsurance or Copayment for prescription drugs obtained at nonparticipating retail pharmacy (30 day supply) Brand name: Plan pays 50% You pay 50% Generic: Plan pays 50% You pay 50% Oak Ridge Retiree Town Hall Meeting #2 Preferred Brand name: $20 copay Generic: $2 copay Not covered except in case of emergency, traveling outside network or drug unavailable elsewhere 22

Comparing Oak Ridge Coverage to Aetna Medicare Prescription Drug Plans Coinsurance or Copayment for prescription drugs obtained through mail order (90 day supply) Oak Ridge Aetna Medicare Rx Essentialssm Aetna Medicare Rx Plussm Aetna Medicare Rx Premiersm Brand name: $35 copay Generic: $15 copay Brand name: $50 copay Brand name: $70 copay Generic: $14 copay Non-Preferred Brand name: $80 copay Preferred Brand name: $40 copay Generic: $4 copay Coinsurance or Copayment for prescription drugs during coverage gap ($2, 250 in total prescription drug costs until you reach $3, 600 in out-of-pocket covered prescription drug costs) Coverage gap does not apply Coverage for retail and mail as noted You pay 100% for all drugs Brand name: You pay 100% for all drugs Generic: $7 copay – retail Non-Preferred Generic: $40 copay – retail $14 copay – mail $80 – mail Preferred Generic: $2 copay – retail $4 copay – mail Oak Ridge Retiree Town Hall Meeting #2 23

Comparing Oak Ridge Coverage to Aetna Medicare Prescription Drug Plans Coinsurance or Copayment for prescription drugs once you reach $3, 600 in out -of-pocket expenses Oak Ridge Retiree Town Hall Meeting #2 Oak Ridge Aetna Medicare Rx Essentialssm Aetna Medicare Rx Plussm Aetna Medicare Rx Premiersm Out of pocket limit does not apply The greater of: Brand name: $5 copay Generic: $2 copay Or 5% of drug cost Coverage for retail and mail as noted 24

Comparing Oak Ridge Coverage to Community Care Rx Basic Prescription Drug Plan Oak Ridge Monthly Premium Person Included in your Retiree Medical contributions Community Care Rx Basic Community Care Rx Choice Community Care Rx Gold $33. 31 $41. 41 $45. 23 Annual Deductible $150 (retail only) $250 (retail) $100 (retail) Coinsurance or Copayment for prescription drugs obtained at participating retail pharmacy (30 day supply) Brand name: Plan pays 70% You pay 30% (minimum $10) Generic: Plan pays 80% You pay 20% (minimum $10) Formulary Brand name: Plan pays 55% You pay 45% Formulary Brand name: $40 copay Formulary Brand name: $50 copay Formulary Preferred Brand name: Plan pays 75% You pay 25% Formulary Generic: $0 copay Oak Ridge Retiree Town Hall Meeting #2 Formulary Preferred Brand name: $20 copay $25 copay Formulary Generic: $4 copay 25

Comparing Oak Ridge Coverage to Community Care Rx Basic Prescription Drug Plan Oak Ridge Coinsurance or Copayment for prescription drugs obtained at nonparticipating retail pharmacy (30 day supply) Brand name: Plan pays 50% You pay 50% Generic: Plan pays 50% You pay 50% Coinsurance or Copayment for prescription drugs obtained through mail order (90 day supply) Brand name: $35 copay Generic: $15 copay Community Care Rx Basic Community Care Rx Choice Community Care Rx Gold In addition to paying the copayment/coinsurance listed on the prior page, you pay the difference between the cost of the drug if the prescription was filled at a participating pharmacy and what the out-of-network pharmacy charged for the drug Formulary Brand name: Plan pays 55% You pay 45% Formulary Preferred Brand name: Plan pays 75% You pay 25% Formulary Generic: $0 copay Formulary Brand name: $120 copay Formulary Brand name: $150 copay Formulary Preferred Brand name: $60 copay Formulary Preferred Brand name: $75 copay Formulary Generic: $12 copay Mail order not available but 90 -day supply can be obtained at participating pharmacies Oak Ridge Retiree Town Hall Meeting #2 26

Comparing Oak Ridge Coverage to Community Care Rx Basic Prescription Drug Plan Oak Ridge Coinsurance or Copayment for prescription drugs during coverage gap ($2, 250 in total prescription drug costs until you reach $3, 600 in out-of-pocket covered prescription drug costs) Coinsurance or Copayment for prescription drugs once you reach $3, 600 in out-of-pocket expenses Coverage gap does not apply Community Care Rx Basic Community Care Rx Choice Community Care Rx Gold You pay 100% of the cost of all prescription drugs through coverage gap Coverage for retail and mail as noted Out of pocket limit does not apply Coverage for retail and mail as noted Oak Ridge Retiree Town Hall Meeting #2 The greater of: Non-Preferred Brand name: $5 copay Formulary Preferred Brand name or Generic: $2 copay Or 5% of drug cost 27

Comparing Oak Ridge Coverage to Coventry Advantra ®Rx Prescription Drug Coverage Oak Ridge Monthly Premium Person Included in your Retiree Medical contributions Advantra. Rx Value Plan Advantra. Rx Premier Plus $22. 86 $33. 99 $43. 85 Annual Deductible $150 (retail only) No deductible Coinsurance or Copayment for prescription drugs obtained at participating retail pharmacy (30 day supply) Brand name: Plan pays 70% You pay 30% (minimum $10) Generic: Plan pays 80% You pay 20% (minimum $10) Non-Formulary Brand name: You pay 100% Non-Formulary Brand name: $53 copay Non-Formulary Brand name: $63 copay Formulary Brand name: $36 copay Formulary Brand name: $20 copay Formulary Generic: $15 copay Formulary Generic: $0 copay 90 day supply available at participating pharmacies – copay equals three times 30 day supply copay Oak Ridge Retiree Town Hall Meeting #2 28

Comparing Oak Ridge Coverage to Coventry Advantra ®Rx Prescription Drug Coverage Oak Ridge Coinsurance or Copayment for prescription drugs obtained at nonparticipating retail pharmacy (30 day supply) Brand name: Plan pays 50% You pay 50% Generic: Plan pays 50% You pay 50% Coinsurance or Copayment for prescription drugs obtained through mail order (90 day supply) Brand name: $35 copay Generic: $15 copay Oak Ridge Retiree Town Hall Meeting #2 Advantra. Rx Value Plan Advantra. Rx Premier Plus Not covered except in case of emergency, traveling outside network or drug unavailable elsewhere. You pay the difference between what the plan would pay if the prescription was filled at a participating pharmacy and what the out-of-network pharmacy charged for the drug Non-Formulary Brand name: You pay 100% Non-Formulary Brand name: $106 copay Non-Formulary Brand name: $126 copay Formulary Brand name: $72 copay Formulary Brand name: $40 copay Formulary Generic: $30 copay Formulary Generic: $10 copay Formulary Generic: $0 copay 29

Comparing Oak Ridge Coverage to Coventry Advantra ®Rx Prescription Drug Coverage Oak Ridge Coinsurance or Copayment for prescription drugs during coverage gap ($2, 250 in total prescription drug costs until you reach $3, 600 in out-of-pocket covered prescription drug costs) Coinsurance or Copayment for prescription drugs once you reach $3, 600 in out-of-pocket expenses Coverage gap does not apply Advantra. Rx Value Plan Advantra. Rx Premier Plus You pay 100% of the cost of all prescription drugs through coverage gap Coverage for retail and mail as noted Out of pocket limit does not apply Coverage for retail and mail as noted Oak Ridge Retiree Town Hall Meeting #2 The greater of: Non-Preferred Brand name: $5 copay Formulary Preferred Brand name or Generic: $2 copay Or 5% of drug cost 30

Comparing Oak Ridge Coverage to Humana Prescription Drug Coverage Oak Ridge Monthly Premium Person Included in your Retiree Medical contributions Humana PDP Standard Humana PDP Enhanced Humana PDP Complete $14. 08 $22. 48 $67. 16 Annual Deductible $150 (retail only) $250 (retail only) No deductible Coinsurance or Copayment for prescription drugs obtained at participating retail pharmacy (30 day supply) Brand name: Plan pays 70% You pay 30% (minimum $10) Generic: Plan pays 80% You pay 20% (minimum $10) Non-Preferred Brand name: Plan pays 75% You pay 25% Non-Preferred Brand name: $60 copay Preferred Brand name: $30 copay Preferred Generic: $7 copay ($0 copay until total drug costs reach $250) Preferred Brand name: Plan pays 75% You pay 25% Preferred Generic: Plan pays 75% You pay 25% 90 day supply available at participating pharmacies – copay equals three times 30 day supply copay Oak Ridge Retiree Town Hall Meeting #2 31

Comparing Oak Ridge Coverage to Humana Prescription Drug Coverage Oak Ridge Coinsurance or Copayment for prescription drugs obtained at nonparticipating retail pharmacy (30 day supply) Brand name: Plan pays 50% You pay 50% Generic: Plan pays 50% You pay 50% Coinsurance or Copayment for prescription drugs obtained through mail order (90 day supply) Brand name: $35 copay Generic: $15 copay Humana PDP Standard Humana PDP Complete Not covered except in case of emergency, traveling outside network or drug unavailable elsewhere. You pay the difference between what the plan would pay if the prescription was filled at a participating pharmacy and what the out-of-network pharmacy charged for the drug Non-Preferred Brand name: Plan pays 75% You pay 25% Preferred Generic: Plan pays 75% You pay 25% Oak Ridge Retiree Town Hall Meeting #2 Humana PDP Enhanced Non-Preferred Brand name: $150 copay Preferred Brand name: $75 copay Preferred Generic: $17. 50 copay ($0 copay until total drug costs reach $250) 32

Comparing Oak Ridge Coverage to Humana Prescription Drug Coverage Oak Ridge Coinsurance or Copayment for prescription drugs during coverage gap ($2, 250 in total prescription drug costs until you reach $3, 600 in out-of-pocket covered prescription drug costs) Coinsurance or Copayment for prescription drugs once you reach $3, 600 in out-of-pocket expenses Coverage gap does not apply Humana PDP Standard Humana PDP Enhanced You pay 100% for all drugs Humana PDP Complete Retail and mail order copays apply through coverage gap Coverage for retail and mail as noted Out of pocket limit does not apply Coverage for retail and mail as noted Oak Ridge Retiree Town Hall Meeting #2 The greater of: Non-Preferred Brand name: $5 copay Formulary Preferred Brand name or Generic: $2 copay Or 5% of drug cost 33

Comparing Oak Ridge Coverage to AARP Medicare Rx Prescription Drug Coverage Oak Ridge Monthly Premium Person Included in your Retiree Medical contributions AARP Medicare Rx by United. Healthcare $27. 28 Annual Deductible $150 (retail only) No deductible Coinsurance or Copayment for prescription drugs obtained at participating retail pharmacy (30 day supply) Brand name: Plan pays 70% You pay 30% (minimum $10) Generic: Plan pays 80% You pay 20% (minimum $10) Non-Preferred Brand name: $55 copay Preferred Brand name: $28 copay Preferred Generic: $5 copay 90 day supply available at participating pharmacies – copay equals three times 30 day supply copay Oak Ridge Retiree Town Hall Meeting #2 34

Comparing Oak Ridge Coverage to AARP Medicare Rx Prescription Drug Coverage Oak Ridge Coinsurance or Copayment for prescription drugs obtained at nonparticipating retail pharmacy (30 day supply) Brand name: Plan pays 50% You pay 50% Generic: Plan pays 50% You pay 50% Coinsurance or Copayment for prescription drugs obtained through mail order (90 day supply) Brand name: $35 copay Generic: $15 copay Oak Ridge Retiree Town Hall Meeting #2 AARP Medicare Rx by United. Healthcare Not covered except in case of emergency, traveling outside network or drug unavailable elsewhere. You will generally pay more for prescriptions filled at a non-participating retail pharmacy. Non-Preferred Brand name: $165 copay Preferred Brand name: $84 copay Preferred Generic: $15 copay 35

Comparing Oak Ridge Coverage to AARP Medicare Rx Prescription Drug Coverage Coinsurance or Copayment for prescription drugs during coverage gap ($2, 250 in total prescription drug costs until you reach $3, 600 in out-of-pocket covered prescription drug costs) Coinsurance or Copayment for prescription drugs once you reach $3, 600 in out-of-pocket expenses Oak Ridge AARP Medicare Rx by United. Healthcare Coverage gap does not apply You pay 100% for all drugs Coverage for retail and mail as noted Out of pocket limit does not apply Coverage for retail and mail as noted Oak Ridge Retiree Town Hall Meeting #2 The greater of: Non-Preferred Brand name: $5 copay Formulary Preferred Brand name or Generic: $2 copay Or 5% of drug cost 36

An Example: Comparing Oak Ridge Coverage to Humana Prescription Drug Coverage n Let’s review an example of how the costs might play out for a retiree. n Joe has a few medical conditions that require regular medication; n 3 of them are brand-name n Joe fills these three times at his pharmacy and then uses mail order for the rest of the year (three 90 -day supplies) Each of these drugs costs $100 for a 30 -day supply or $300 for a 90 -day supply — 2 of those are on Humana’s Preferred Brand name list. n He also takes one drug that is a generic but does not take this regularly – he expects to refill that drug five times during the year at his pharmacy. The retail cost for this drug is $30 for a 30 -day supply. n We’ll assume that Joe only uses participating pharmacies. n If Joe did not have any coverage, his total prescription drug costs would be $3, 750. Oak Ridge Retiree Town Hall Meeting #2 37

An Example: Comparing Oak Ridge Coverage to Humana Prescription Drug Coverage Annual Deductible Coinsurance or Copayment for prescription drugs obtained at participating retail pharmacy (30 day supply) Subtotal Oak Ridge Retiree Town Hall Meeting #2 Oak Ridge Joe Pays $150 (retail only) $150 Brand name: Plan pays 70% You pay 30% (minimum $10) 30% x {$900 Minus $150 deductible} = Generic: Plan pays 80% You pay 20% (minimum $10) 30% X $750 = $225 1 Generic ($10) X 5 refills = $50 $425 Total Drug Cost Humana PDP Enhanced Joe Pays No deductible $0 3 Brand names ($100) X 3 refills = $900 Non-Preferred Brand name: $60 copay 1 Non. Preferred Brand name ($60) X 3 refills = $180 1 Generic ($30) X 5 refills = $150 $1, 050 Preferred Brand name: $30 copay Preferred Generic: $7 copay ($0 copay until total drug costs reach $250) 2 Preferred Brand name ($30) X 3 refills = $180 1 Generic ($7) X 5 refills = $35 $395 38

An Example: Comparing Oak Ridge Coverage to Humana Prescription Drug Coverage Coinsurance or Copayment for prescription drugs obtained through mail order (90 day supply) Oak Ridge Joe Pays Total Drug Cost Humana PDP Enhanced Joe Pays Brand name: $35 copay Generic: $15 copay 3 Brand name X 3 refills ($35) = $315 3 Brand name ($300) X 3 refills = $2, 700 Non-Preferred Brand name: $150 copay 1 Non-Preferred Brand name ($150) X 3 refills = $450 Joe hits Coverage Gap when Total Drug Costs reach $2, 250 Preferred Brand name: $75 copay Preferred Generic: $17. 50 copay ($0 copay until total drug costs reach $250) 1 Preferred Brand name ($75) X 1 refill = $75 Coverage Gap Hit – Joe pays for remaining $1, 500 in drug costs Subtotal this page $315 $2, 700 $2, 025 Subtotal prior page $425 $1, 050 $395 Grand total $740 $3, 750 $2, 420 Premium Cost Oak Ridge Retiree Town Hall Meeting #2 Included $270 39

Let’s stop for a minute to see if there any questions? Oak Ridge Retiree Town Hall Meeting #2 40

Medicare Part C n Originally known as Medicare+Choice plans, now called Medicare Advantage or Medicare Health plans n These plans deliver Medicare benefits through coordinated care plans (HMOs, PPOs) or private fee-for-service plans — May include additional benefits such as dental, vision, hearing screenings and prescription drugs — Must live in the geographic service area where the plan provides service — Premiums vary by plan n Available to: — Individuals entitled to Part A and enrolled in Part B — 65 and older — Disabled Medicare beneficiaries – Except new enrollees with ESRD n We’ll discuss the Medicare prescription drug coverage offered by some of the local Medicare Advantage plans n The premium we note for each is for the prescription drug coverage only – however, many of these plans require additional premiums for medical coverage Oak Ridge Retiree Town Hall Meeting #2 41

Comparing Medicare Advantage Prescription Drug Coverage n There are several providers who offer Medicare Advantage plans in the Oak Ridge area n These plans include Medicare prescription drug coverage as part of their overall medical coverage n We’ll be comparing prescription drug coverage for the following Medicare Advantage plans: n Blue. Cross Blue. Shield of Tennessee’s Blue. Advantage. Plus n Cariten Senior Health n John Deere Secure. Plus Oak Ridge Retiree Town Hall Meeting #2 42

Comparing Oak Ridge Coverage to BCBS of Tennessee’s Blue. Advantage. Plus Prescription Drug Coverage Oak Ridge Blue. Advantage. Plus Included in your Retiree Medical contributions $37. 98 Annual Deductible $150 (retail only) No deductible Coinsurance or Copayment for prescription drugs obtained at participating retail pharmacy (30 day supply) Brand name: Plan pays 70% You pay 30% (minimum $10) Generic: Plan pays 80% You pay 20% (minimum $10) Formulary Non-Preferred Brand name: $64 copay Monthly Premium Person Formulary Preferred Brand name: $32 copay Formulary Generic: $8 copay 90 day supply available at participating pharmacies – copay equals three times 30 day supply copay Oak Ridge Retiree Town Hall Meeting #2 43

Comparing Oak Ridge Coverage to BCBS of Tennessee’s Blue. Advantage. Plus Prescription Drug Coverage Oak Ridge Coinsurance or Copayment for prescription drugs obtained at nonparticipating retail pharmacy (30 day supply) Brand name: Plan pays 50% You pay 50% Generic: Plan pays 50% You pay 50% Blue. Advantage. Plus Only covered in special circumstances: in case of emergency, traveling outside network or drug unavailable elsewhere. 10 -day supply only at the following copays: Formulary Non-Preferred Brand name: $64 copay Formulary Preferred Brand name: $32 copay Formulary Generic: $8 copay Coinsurance or Copayment for prescription drugs obtained through mail order (90 day supply) Oak Ridge Retiree Town Hall Meeting #2 Brand name: $35 copay Generic: $15 copay Formulary Non-Preferred Brand name: $128 copay Formulary Preferred Brand name: $64 copay Formulary Generic: $16 copay 44

Comparing Oak Ridge Coverage to BCBS of Tennessee’s Blue. Advantage. Plus Prescription Drug Coverage Oak Ridge Coinsurance or Copayment for prescription drugs during coverage gap ($2, 250 in total prescription drug costs until you reach $3, 600 in out-of-pocket covered prescription drug costs) Coinsurance or Copayment for prescription drugs once you reach $3, 600 in out-of-pocket expenses Coverage gap does not apply Blue. Advantage. Plus You pay 100% of the cost of all prescription drugs through coverage gap Coverage for retail and mail as noted Out of pocket limit does not apply Coverage for retail and mail as noted Oak Ridge Retiree Town Hall Meeting #2 The greater of: Non-Preferred Brand name: $5 copay Formulary Preferred Brand name or Generic: $2 copay Or 5% of drug cost 45

Comparing Oak Ridge Coverage to Cariten Senior Health Prescription Drug Coverage Oak Ridge Cariten Senior Health (PPO & HMO) Included in your Retiree Medical contributions $39. 24 – PPO or HMO Annual Deductible $150 (retail only) $100 (retail) Coinsurance or Copayment for prescription drugs obtained at participating retail pharmacy (30 day supply) Brand name: Plan pays 70% You pay 30% (minimum $10) Generic: Plan pays 80% You pay 20% (minimum $10) Multi-source Brand name, Non-Preferred Brand name and Non-Preferred Injectables: $50 copay Monthly Premium Person Other Preferred Brand name and Preferred Injectables: $30 copay Preferred Brand name: $15 copay All Generics except omeprazole: $5 copay Oak Ridge Retiree Town Hall Meeting #2 46

Comparing Oak Ridge Coverage to Cariten Senior Health Prescription Drug Coverage Oak Ridge Cariten Senior Health (PPO & HMO) Coinsurance or Copayment for prescription drugs obtained at nonparticipating retail pharmacy (30 day supply) Brand name: Plan pays 50% You pay 50% Generic: Plan pays 50% You pay 50% Not covered except in case of emergency, traveling outside network or drug unavailable elsewhere Coinsurance or Copayment for prescription drugs obtained through mail order (90 day supply) Brand name: $35 copay Generic: $15 copay Multi-source Brand name, Non-Preferred Brand name and Non-Preferred Injectables: $150 copay Other Preferred Brand name and Preferred Injectables: $90 copay Preferred Brand name: $45 copay All Generics: $15 copay 90 -day supply can be obtained at participating pharmacies or through mail-order pharmacy Oak Ridge Retiree Town Hall Meeting #2 47

Comparing Oak Ridge Coverage to Cariten Senior Health Prescription Drug Coverage Oak Ridge Coinsurance or Copayment for prescription drugs during coverage gap ($2, 250 in total prescription drug costs until you reach $3, 600 in out-of-pockets covered prescription drug costs) Coinsurance or Copayment for prescription drugs once you reach $3, 600 in out-of-pocket expenses Coverage gap does not apply Cariten Senior Health (PPO & HMO) You pay 100% of the cost of all prescription drugs through coverage gap Coverage for retail and mail as noted Out of pocket limit does not apply Coverage for retail and mail as noted Oak Ridge Retiree Town Hall Meeting #2 The greater of: Non-Preferred Brand name: $5 copay Formulary Preferred Brand name or Generic: $2 copay Or 5% of drug cost 48

Comparing Oak Ridge Coverage to John Deere’s Secure. Plus Prescription Drug Coverage Oak Ridge Monthly Premium Person Included in your Retiree Medical contributions John Deere’s Secure. Plus Medicare Part D Basic Alternative John Deere’s Secure. Plus Medicare Part D Enhanced Alternative $29. 29 $43. 90 Annual Deductible $150 (retail only) No deductible Coinsurance or Copayment for prescription drugs obtained at participating retail pharmacy (30 day supply) Brand name: Plan pays 70% You pay 30% (minimum $10) Generic: Plan pays 80% You pay 20% (minimum $10) Non-Formulary Brand name, Formulary Brand name and Generic: $10 copay All drugs: Plan pays 75% You pay 25% Oak Ridge Retiree Town Hall Meeting #2 49

Comparing Oak Ridge Coverage to John Deere’s Secure. Plus Prescription Drug Coverage Oak Ridge John Deere’s Secure. Plus Medicare Part D Basic Alternative John Deere’s Secure. Plus Medicare Part D Enhanced Alternative Coinsurance or Copayment for prescription drugs obtained at nonparticipating retail pharmacy (30 day supply) Brand name: Plan pays 50% You pay 50% Generic: Plan pays 50% You pay 50% Not covered except in case of emergency, traveling outside network or drug unavailable elsewhere. You can obtain a 30 day supply: Non-Formulary Brand name, Formulary Brand name and Generic: $10 copay Non-Formulary Brand name, Formulary Brand name and Generic: Plan pays 75% You pay 25% Coinsurance or Copayment for prescription drugs obtained through mail order (90 day supply) Brand name: $35 copay Generic: $15 copay One month (30 -day supply) available at mail order: Non-Formulary Brand name, Formulary Brand name and Generic: $10 copay Non-Formulary Brand name, Formulary Brand name and Generic: Plan pays 75% You pay 25% Oak Ridge Retiree Town Hall Meeting #2 50

Comparing Oak Ridge Coverage to John Deere’s Secure. Plus Prescription Drug Coverage Oak Ridge Coinsurance or Copayment for prescription drugs during coverage gap ($2, 250 in total prescription drug costs until you reach $3, 600 in out-of-pockets covered prescription drug costs) Coinsurance or Copayment for prescription drugs once you reach $3, 600 in out-ofpocket expenses Coverage gap does not apply Coverage for retail and mail as noted Out of pocket limit does not apply Coverage for retail and mail as noted John Deere’s Secure. Plus Medicare Part D Basic Alternative John Deere’s Secure. Plus Medicare Part D Enhanced Alternative Coverage gap begins at $1, 825 and you pay 100% of the cost of all prescription drugs through coverage gap Coverage gap begins at $2, 250 and you pay 100% of the cost of all prescription drugs through coverage gap The greater of: Non-Preferred Brand name: $5 copay Formulary Preferred Brand name or Generic: $2 copay Or 5% of drug cost Oak Ridge Retiree Town Hall Meeting #2 51

An Example: Comparing Oak Ridge Coverage to Cariten Senior Health Prescription Drug Coverage n Let’s review an example of how the costs might play out for a retiree. n Joe has a few medical conditions that require regular medication; n 3 of them are brand-name n Joe fills these three times at his pharmacy and then uses mail order for the rest of the year (three 90 -day supplies) Each of these drugs costs $100 for a 30 -day supply or $300 for a 90 -day supply — 2 of those are on Cariten’s Preferred Brand name list. n He also takes one drug that is a generic but does not take this regularly – he expects to refill that drug five times during the year at his pharmacy. The retail cost for this drug is $30 for a 30 -day supply. n We’ll assume that Joe only uses participating pharmacies. n If Joe did not have any coverage, his total prescription drug costs would be $3, 750. Oak Ridge Retiree Town Hall Meeting #2 52

An Example: Comparing Oak Ridge Coverage to Cariten Senior Health Prescription Drug Coverage Oak Ridge Joe Pays $150 (retail only) $150 Brand name: Plan pays 70% You pay 30% (minimum $10) 30% x {$900 Minus $150 deductible} = Annual Deductible Coinsurance or Copayment for prescription drugs obtained at participating retail pharmacy (30 day supply) Generic: Plan pays 80% You pay 20% (minimum $10) Subtotal Oak Ridge Retiree Town Hall Meeting #2 30% X $750 = $225 1 Generic ($10) X 5 refills = $50 $425 Total Drug Costs 3 Brand names ($100) X 3 refills = $900 1 Generic ($30) X 5 refills = $150 $1, 050 Cariten Senior Health (PPO & HMO) Joe Pays $100 (retail) $100 Other Preferred Brand name and Preferred Injectables: $30 copay 1 Other Preferred Brand name ($30) X 3 refills = $90 Preferred Brand name: $15 copay All Generics: $5 copay 2 Preferred Brand name ($15) X 3 refills = $90 = $180 1 Generic ($5) X 5 refills = $25 $305 53

An Example: Comparing Oak Ridge Coverage to Cariten Senior Health Prescription Drug Coverage Coinsurance or Copayment for prescription drugs obtained through mail order (90 day supply) Oak Ridge Joe Pays Total Drug Costs Cariten Senior Health (PPO & HMO) Joe Pays Brand name: $35 copay Generic: $15 copay 3 Brand name X 3 refills ($35) = $315 3 Brand name ($300) X 3 refills = $2, 700 Other Preferred Brand name and Preferred Injectables: $90 copay 1 Other Preferred Brand name ($90) X 3 refills = $270 Joe hits Coverage Gap when Total Drug Costs reach $2, 250 Preferred Brand name: $45 copay All Generics: $15 copay 1 Preferred Brand name ($45) X 1 refill = $45 Coverage Gap Hit – Joe pays for remaining $1, 500 in drug costs Subtotal this page $315 $2, 700 $1, 815 Subtotal prior page $425 $1, 050 $275 Grand Total $740 $2, 210 included $471 Premium Cost Oak Ridge Retiree Town Hall Meeting #2 54

Let’s stop for a minute to see if there any questions? Oak Ridge Retiree Town Hall Meeting #2 55

Special Considerations for Limited Income and Resources Individuals Oak Ridge Retiree Town Hall Meeting #2 56

Who Should Enroll in a Medicare Prescription Drug Plan? Medicare prescription drug plans are designed for people who need them most… n Those without drug coverage n For people without the benefit of employer-sponsored coverage n Those who qualify for “extra help” n The Social Security Administration has identified people who may qualify for assistance in paying for drugs based on their income and assets ― applications were mailed directly to people in May 2005 …but it’s completely up to each individual to decide what prescription drug coverage option makes the best financial sense for his or her family. Oak Ridge Retiree Town Hall Meeting #2 57

Who’s Eligible for Extra Help? n “Limited income and resources” defined as: n Income less than 150% of federal poverty level — $14, 355 for individuals in 2006 — $19, 245 for couples in 2006 n Limited liquid assets — $11, 500 for individuals — $23, 000 for couples in 2006 n The Social Security Administration is sending applications to those who may qualify for the extra benefit n If you receive an application, you should complete it. Submitting this application does not enroll you for Medicare drug coverage n However, according to the Medicare and You 2006 Handbook, if you apply and qualify for assistance, you will automatically be enrolled in the plan for which you are considered eligible Oak Ridge Retiree Town Hall Meeting #2 58

What Does “Extra Help” Cover? Oak Ridge Monthly Premium Person Included in your Retiree Medical contributions <100%* <135%** <150%*** $0 $0 Subsidy phased out at 150% Annual Deductible $150 (retail only) $0 $0 $50 Coinsurance or Copayment for prescription drugs obtained at participating retail pharmacy (30 day supply) Brand name: Plan pays 70% You pay 30% (minimum $10) Generic: Plan pays 80% You pay 20% (minimum $10) Formulary Brand name: $3 copay Formulary Brand name: $5 copay Formulary Generic: $1 copay Formulary Generic: $2 copay Formulary Brand name: Plan pays 85% You pay 15% Formulary Generic: Plan pays 85% You pay 15% * Income must be less than $9, 570 for individuals/$12, 830 for a couple. Must also be eligible for Medicaid. ** Income must be less than $12, 920 for individuals/$17, 321 for a couple. Liquid assets <$6, 000 ind; $9, 000 couple *** Income must be less than $14, 355 for individuals/$19, 245 for a couple. Liquid assets <$11, 500 ind; $23, 000 couple Oak Ridge Retiree Town Hall Meeting #2 59

What Does “Extra Help” Cover? Oak Ridge <100% <135% <150% Coinsurance or Copayment for prescription drugs during coverage gap ($2, 250 in total prescription drug costs until you reach $3, 600 in out-of -pocket covered prescription drug costs) Coverage gap does not apply Formulary Brand name: $3 copay Formulary Brand name: $5 copay Coverage for retail and mail as noted Formulary Generic: $1 copay Formulary Generic: $2 copay Formulary Brand name: Plan pays 85% You pay 15% Coinsurance or Copayment for prescription drugs once you reach $3, 600 in out-of-pocket expenses Out of pocket limit does not apply Formulary Brand name: $3 copay Formulary Brand name: $5 copay Formulary Generic: $1 copay Formulary Generic: $2 copay Coverage for retail and mail as noted Oak Ridge Retiree Town Hall Meeting #2 Formulary Generic: Plan pays 85% You pay 15% 60

But Keep in Mind… n If you become enrolled in a plan offered to individuals with limited income and resources, you will lose your Oak Ridge retiree medical coverage n Medicare or, if you are eligible, Medicaid will be your sole source of medical coverage n Weigh the potential out-of-pocket costs — both your medical and prescription drug coverage — before filing your application n For example, consider your Medicare inpatient deductible if you anticipate being hospitalized in the coming year n You may also want to discuss this with your local Social Security office Oak Ridge Retiree Town Hall Meeting #2 61

What’s Happens Next? Oak Ridge Retiree Town Hall Meeting #2 62

What’s Next? n For 2006, a special Medicare Part D enrollment period will be held n For individuals eligible by November 15: November 15, 2005 – May 15, 2006 n Individuals eligible later: If an individual becomes eligible for Medicare after May 15, 2006, there will be an initial open enrollment period for both Parts B & D n In later years, from November 15 to December 31 for next benefit year (January 1 – December 31) Oak Ridge Retiree Town Hall Meeting #2 63

The Key Question… If I already have coverage through Oak Ridge, does it makes sense for me to enroll in a private Medicare prescription drug plan in 2006? The answer… In most cases, no! Remember the reason ― Oak Ridge already provides drug coverage that is expected to pay out at least as much as — and in most cases more than — a standard Medicare prescription drug plan n Most retirees are better off under Oak Ridge’s plan, unless: n You are eligible for “extra help” or on Tricare (the plan for military retirees and spouses), n Remember, if you are Medicare-eligible and elect Medicare Part D coverage, your continued coverage through Oak Ridge will be dropped Oak Ridge Retiree Town Hall Meeting #2 64

Oak Ridge Retiree Prescription Drug Coverage: Overview n Your Oak Ridge retiree medical plan includes prescription drug coverage n Anyone enrolled in the Oak Ridge retiree medical plan receives prescription drug coverage automatically n Medical and prescription drug coverage is integrated; you cannot enroll in one without the other n Oak Ridge prescription drug coverage is “creditable coverage, ” which is defined by CMS as being “on average” at least as generous as the standard benefit n Protects your right to leave the Oak Ridge retiree medical plan and join another “certified” plan or Medicare prescription drug plan within 63 days without incurring a penalty on the Medicare Part D premium for coverage — Those without “creditable coverage” are penalized 1% of the monthly Medicare Part D premium for each month enrollment is delayed past their initial enrollment period Oak Ridge Retiree Town Hall Meeting #2 65

Key Points to Remember n The Oak Ridge retiree medical plan includes prescription drug coverage. This means anyone who’s enrolled in an Oak Ridge retiree medical plan receives prescription drug coverage automatically n Medical and prescription drug coverage are combined and a person can’t enroll in one without the other n For 2006, your Oak Ridge coverage is at least as generous as private Medicare prescription drug coverage n Your Oak Ridge prescription drug coverage does not coordinate with private Medicare prescription drug coverage n This means you do not need to enroll in Medicare Part D to keep your Oak Ridge coverage n In fact, if you enroll in Medicare Part D, you will lose your Oak Ridge retiree medical coverage Oak Ridge Retiree Town Hall Meeting #2 66

Let’s stop for a minute to see if there any questions? Oak Ridge Retiree Town Hall Meeting #2 67

Where to Get More Information n One. Call n By phone at 574 -1500 or 1 -877 -861 -2255 — CSRs available Monday through Friday, 7: 00 a. m. to 5: 00 p. m. ET n Via the internet at http: //www. y 12. doe. gov — Employee & Retiree Benefits Oak Ridge Retiree Town Hall Meeting #2 68

Thanks for Coming! Oak Ridge Retiree Town Hall Meeting #2 69