42 million people with Medicare are eligible to signup for Medicare prescription drug plans in 2005.

Drug coverage will be available from private plans called Medicare prescription drug plans (PDPs). Medicare Health plans (e.g., Medicare Advantage or Medicare Cost plans) may also offer drug coverage.

People must enroll in a Medicare prescription drug plan to get coverage.

In order to access VA’s medical benefits package, most veterans must enroll in the VA healthcare system. All enrolled veterans get access to the VA medical benefits package, which includes prescription drugs. When they enroll for care, veterans are placed in one of eight priority categories. If there are insufficient funds to provide care for all eligible veterans requesting enrollment, the priority list is used to establish a cut-off point for enrollment purposes. The Secretary makes an enrollment decision on a yearly basis. As of January 17, 2003, VA is not enrolling any new veterans in priority category 8.

CHAMPVA is a health benefits program in which VA shares the cost of health care services and supplies with the spouse or widow(er) and children of certain veterans.

CHAMPVA requires beneficiaries who are eligible for Medicare Part A to also be enrolled in Medicare Part B (with rare exceptions).

Enrollment in a Medicare drug plan is voluntary for CHAMPVA beneficiaries.

About 39 million are expected to enroll in a Medicare drug plan or receive creditable coverage from another source such as a former employer, union, VA or TRICARE (Source: final rule impact analysis).

VA estimates about 8 million veterans are enrolled with the VA and about 5 million use VA services. VA estimates that 3.6 million of enrolled veterans are also Medicare beneficiaries. (Source: 2003 Survey of Veterans).

CHAMPVA has 250,000 beneficiaries enrolled, of which 89,000 are also Medicare beneficiaries.

Generally, at the plan’s participating pharmacies. Plans may also offer mail order option.

Generally, VA prescriptions are written by VA providers and filled by VA pharmacies/Consolidated Mail Outpatient Pharmacy Program (CMOP) under the VA formulary.

CHAMPVA beneficiaries may fill their prescriptions at retail pharmacies.

CHAMPVA beneficiaries may also obtain maintenance prescriptions through the no-cost Meds by Mail program.

Standard benefit: $250 deductible, then 25% copay until $2,250 in drug spending, 100% beneficiary copay until out-of-pocket spending reaches $3,600, after $3,600 in out-of-pocket spending ($5,100 in total drug spending) there is 5% coinsurance or $2/$5 co-pays.

The copay amount is $8, with an annual cap of $960. There are exceptions to the requirement that VA charge copays for medications. The three main exceptions apply to veterans with a service-connected disability rated 50% or greater; veterans with an annual income below a limit set by statute; or any medications to treat a service-connected disability.

There is an annual deductible of $50 for outpatient care that includes retail pharmacy per individual beneficiary or an annual deductible of $100 for such care per CHAMPVA family. There is no deductible applied to prescriptions obtained through the Meds by Mail program. Cost share for retail pharmacy is 25% of the allowable amount of the drug.

There is no cost to the beneficiary for prescriptions obtained through Meds by Mail.

A CHAMPVA family will never pay more than $3000 out-of- pocket medical expense per year for ALL covered medical care.

Those with incomes below 150% of poverty and resources below certain limits are eligible for extra help. Co-pays for people with limited incomes are much lower. They range from $0 for people with Medicare in institutions; $1/$3 for people with Medicaid below poverty; $2/$5 100–135% of poverty; 15% co-pay for 136–149% of poverty. Deductible waived for all but people eligible for partial extra help, (135–150%) who pay a $50 deductible.

Veterans whose annual income does not exceed the maximum annual rate of VA pension are not required to pay a copay for VA medications. The maximum annual rate of VA pension is subject to change. For information on the current amount, contact the VA Fiscal Officer or Revenue Coordinator at the nearest VA health care facility.

No additional benefits for low income.

People with Medicare who have coverage that is at least as good (i.e. “creditable”) from another source, such as an employer or union, can enroll in a Medicare prescription drug plan after the initial enrollment period and not be subject to higher premiums.

VA coverage is creditable coverage.

CHAMPVA is creditable coverage.

Medicare drug plans will each develop their own list of covered drugs within the parameters set by CMS. Lists of covered drugs can have preferred and nonpreferred drugs with different cost-sharing.

VA has a national list of covered drugs.

VA formulary is used for prescriptions through Meds by Mail.

Medicare Part D is secondary payer where a person has health coverage based on their own employment or the employment of a spouse (just as with Medicare A/B).

VA is primary if it is a benefit or service provided or directed by VA. VA does not bill CMS for services nor does VA cost share for any services.

Medicare is primary and CHAMPVA is secondary if it is a benefit payable by both Medicare and CHAMPVA. CHAMPVA will fill in Medicare’s co-pays up to 75% of the CHAMPVA allowable amount for covered prescriptions.

Beneficiaries enrolled in both Medicare Part D and CHAMPVA, will not be eligible for continued enrollment in the CHAMPVA’s no-cost Meds by Mail program (because it is open only to those with no other drug coverage).