Plain Talk about Your Medicare Prescription Drug Plan Choices

1. Plain Talk about Your Medicare Prescription Drug Plan Choices S5715_MRK_TMP_SNSPRSNT08 CMS Approved 10/2007

2. What we know today about Medicare Part D More seniors have access to drug coverage than ever before… • There are 2.6 million Medicare beneficiaries in Texas out of a total of 44 million across the nation • There are 60 Medicare Prescription Drug Plans offered in Texas • Premiums range from $11.00 to $96.50 • There are 24 companies offering MAPD-Medicare Advantage Prescription Drug plans in Texas Note: Information provided by The Henry J. Kaiser Foundation at www.kff.org

3. Plain Talk is about making insurance easy to understand • Medicare Part D • Your Eligibility • Your Enrollment • What you should know about Part D plans • Your Formulary • Your Exception Process • Your Costs • What Part D Plans Blue Cross and Blue Shield of Texas offers • Our Standard Plan • Our Value Plan • Our Plus Plan You Ask, We Answer

4. Are you… • New to Medicare? • Losing/changing employer retiree coverage? • Someone who did not enroll during the last annual enrollment period? • Interested in switching plans or companies? • Wanting to know what is NEW in Part D?

5. Plain Talk on Eligibility • If you are entitled to Part A and/or enrolled in Part B • If you reside permanently in the plan’s service area in Texas • If you are not enrolled in any other Medicare Prescription Drug Plan at the same time (no duplicate coverage)

6. Plain Talk on Enrollment • You have an Annual Enrollment Period (AEP) • You can enroll from November 15th to December 31st if you are already a Medicare beneficiary • Your coverage will be effective January 1st • You have an Initial Enrollment Period (IEP) • When you turn 65 • You can enroll up to 3 months prior to the month of your 65th birthday, the month of your birthday, and up to 3 months after the month of your 65th birthday

7. Plain Talk on Enrollment • You have a Special Enrollment Period (SEP) if • You move in or out of Texas • You enter or leave a skilled nursing facility • You involuntarily lose creditable coverage or • Other exceptional conditions

8. Plain Talk on Enrolling Now • You want to avoid any late payment penalty: 1% for every month you were eligible to enroll but delayed (or lacked creditable coverage) • You want to have protection from the high cost of prescription medications • You should switch plans if your current plan does not meet your needs • You buy a Part D prescription plan on an individual basis; each person can buy the plan that best fits their needs

9. Plain Talk on what drugs are covered • Your medications prescribed by your doctor • Your medications may also include biologicals and insulin • Your medical supplies associated with injection of insulin such as syringes, needles, alcohol swabs and gauze • Remember: A PDP or MAPD may not cover all drugs

10. Plain Talk on what drugs are covered but not under a Part D plan • Medications while in the hospital or SNF are covered under Part A until you leave • If your drugs are currently covered under Part B, they are still covered under Part B even if you join a Part D plan

11. Plain Talk on Prescription Drugs that are not covered • Medicare does not cover drugs for cosmetic purposes, fertility, anorexia, weight loss or gain or symptomatic relief of cough and colds, prescription vitamins and mineral products • Medicare does not cover barbiturates or certain benzodiazepines • Non-prescription drugs

12. Plain Talk on Formularies • Your listing of covered medications • Your list may include generic, brand, and specialty • Your list may also have specific formulary guidelines

13. Plain Talk on Formulary Guidelines • You may need “Prior Authorization” for certain drugs • You, your doctor, or your appointed representative may need to get approval before you fill your prescription • If prior authorization is not obtained, your drug may not be covered

14. Plain Talk on Formulary Guidelines • You may have a “Quantity Limit” for certain drugs • You may be limited in the amount of the drug that is covered per prescription for a defined period of time • For example, 4 tablets of Fosamax for a 30 day supply

15. Plain Talk on Formulary Guidelines • You may require “Step Therapy” • In some cases, you may be required to first try one drug to treat your medical condition before another drug is approved • For example, if drug A and B both treat the condition, your doctor may need to prescribe drug A first • If drug A does not work, then drug B will be prescribed

16. Plain Talk on the Exception Process • You, as enrollee, can request an exception if: • You are using a drug that has been removed from the formulary • You are prescribed a non-formulary drug that is medically necessary • Your cost sharing amount of a drug you use is changing • You are prescribed a drug covered under a more expensive cost sharing because the less expensive drug is medically inappropriate

17. Plain Talk on Cost • What are your annual drug costs? Know your… • Monthly Premium • Deductible, if applicable • Copayment/Coinsurance • Coverage Gap and TrOOP calculations

18. Plain Talk on the Coverage Gap (formerly known as the “Donut Hole”) • When you go to fill your first prescription in 2008, you will be in the initial coverage limit period where you and the plan share the costs of your prescriptions. • You will reach the coverage gap after payments you and the plan make for your prescriptions reach $2,510. • For example: • You will not reach the coverage gap until your balance is zero. If your costs do not exceed $2,510.00, you will not be in the gap. $2,510.00 Initial coverage period limit • $7.00 Copayment you paid for 1st prescription • $43.00 Payment made by plan for 1st prescription $2,460.00 Left before you reach the coverage gap

19. Plain Talk on True Out Of Pocket -TrOOP Example: • Keep in mind: your deductible (if you have one) and your coverage gap do count towards TrOOP. But your monthly premiums do not. #1 Prescription Filled $50.00 total drug cost $7.00 copayment $43.00 paid by Part D plan #2 Prescription Filled $150.00 total drug cost $45.00 copayment $105.00 paid by Part D plan Total TrOOP to date $7.00 + $45.00 = $52.00 toward the $4050.00 out of pocket for catastrophic coverage

20. Plain Talk on your Part D Calculations Coverage Gap Calculation 2008 Benefit = $2,510.00 - $50.00 (= $7.00 Your Share & $43.00 Part D plan) = $2,460.00 Remaining until coverage gap TrOOP Calculation 2008 Benefit = $4,050.00 - $7.00 Copayment - $0.00 Deductible, if any - $0.00 Coverage Gap, if any =$4,043.00 TrOOP Balance to Date Remember: Each time you fill an approved prescription your plan will be making the coverage gap and TrOOP adjustments. You will be receiving an Explanation of Benefits that will provide you with the balance to date.

21. Plain Talk on Extra Help Guidelines • If your annual income is below $15,315 for an individual ($20,535 for a married couple living together), you may not have to pay monthly premiums or deductibles, and you could pay as little as $2.25 for your copayments. • To qualify, your resources must be limited to $11,710 for an individual ($23,410 for a married couple living together). These resource limits can be slightly higher (an additional $1,500 per person) if you will use your money for burial expenses. Resources include such things as bank accounts, stocks and bonds. Your house and car are not considered resources.

22. Plain Talk on our Blue MedicareRx Plans • We offer 3 plans to choose from • Standard • Value • Plus • Each plan offers you affordability, savings and flexibility

23. Blue Medicare Rx PlansAnnual out-of-pocket costs are incurred throughout the benefit year.

24. Plain Talk on Blue MedicareRx Formulary • Our Formulary • Blue MedicareRx covers more than 2,600 prescription drugs • Visit www.bcbstx.com for a complete listing

25. Plain Talk on Blue MedicareRx Pharmacies • We offer one of the largest retail networks in the country (56,500) • Retail network drug store chains • CVS, H-E-B, Walgreens • Long-term care • Home infusion • Most independent pharmacies • We have 3,900 network pharmacies in Texas • Note: Need to use the network pharmacies to obtain benefits, except for emergencies

26. Plain Talk on Preferred Network Pharmacies • Pay just two and a half months of copayments instead of three when you fill a 90-day supply of eligible prescriptions. • There are approximately 1,750 preferred network pharmacies in Texas. • Albertsons, CVS, Kmart, Kroger, Randalls, Sam’s Club, Sav-On, Target, Tom Thumb, United Supermarket Pharmacies, Wal-Mart, and Walgreens or their affiliates • Mail-order option • You can also save on copayments with our convenient mail-order service.

27. Plain Talk on which Blue MedicareRx plan is right for you • The Standard Plan may be for you… • If you have low or no prescription drug usage • And you just want protection against future prescription needs

28. Plain Talk on which Blue MedicareRx plan is right for you • The Value Plan may be right for you if… • You have moderate prescription drug usage • And do not want an annual deductible

29. Plain Talk on which Blue MedicareRx plan is right for you • The Plus Plan may be right for you if… • You have moderate to heavy prescription drug usage • You prefer to have generic coverage in the “gap”* • You do not want an annual deductible * Only coinsurance amount you pay during the gap gets counted toward TrOOP for generics

30. Blue Medicare Rx PlansAnnual out-of-pocket costs are incurred throughout the benefit year.

31. Blue Medicare Rx PlansAnnual out-of-pocket costs are incurred throughout the benefit year.

32. Blue Medicare Rx PlansAnnual out-of-pocket costs are incurred throughout the benefit year.

33. Plain Talk on Enrolling in Blue MedicareRx • Internet:You can also enroll online at www.bcbstx.com. Just click on “Medicare Products” and then “Blue MedicareRx Plans”. • Mail:Complete an enrollment form and mail in the postage-paid envelope included in the enrollment kit • Telephone: You can enroll over the phone. • Call 1-888-579-9373, 8 a.m. - 8 p.m., local time, 7 days a week • For the hearing or speech impaired, call 1-888-579-9375

34. Plain Talk on Enrolling in Blue MedicareRx • Personal Service: You can request a home or office visit with a Blue Cross and Blue Shield of Texaslicensed agent at no additional cost • Government • Call 1-800-MEDICARE (633-4227), 24 hours a day • TTY 1-877-486-2048, 24 hours a day • Go online to www.medicare.gov

35. Plain Talk on what to expect from Blue MedicareRx • You can use your benefits when your coverage is effective with CMS approval • You should receive your acknowledgement letter within 7 days of your effective date • You can use your acknowledgement letter to verify coverage until your ID card arrives • Your welcome kit will arrive within 30 days

36. Plain Talk on choosing a plan… • First, compare the savings • $0 deductible options • Low copayments • A plan option with benefits during the “gap”

37. Plain Talk on Extra $avings • At a preferred network pharmacy, you may purchase a 90-day supply of an eligible generic or brand name prescription drug and pay only two and a half months of copayments • Through the mail order option, you may purchase a 90-day supply of an eligible generic or brand name prescription drug and pay only two and a half months of copayments • Check with your doctor to see if a generic equivalent is medically appropriate

38. Second, review the formulary • Blue MedicareRx has a comprehensive formulary that covers more than 2,600 medications Finally, review the pharmacy network • Savings on copayments at preferred network pharmacies including Walgreens • Savings through mail-order program • One of the area’s largest pharmacy networks (3,900)

39. You ask, We answer You can… • Pick up an enrollment kit to take home • Leave your name and number if you want a licensed, certified agent to contact you • For individual questions, please ask a Service in the Neighborhood representative • Call us at 1-888-579-9373, 8 a.m. - 8 p.m., local time, 7 days a week. For the hearing or speech impaired, call 1-888-579-9375 or go to www.bcbstx.com

40. THANK YOU! SM Service Marks of the Blue Cross and Blue Shield Association, an Association of Independent Blue Cross and Blue Shield Plans ® Registered Service Marks of the Blue Cross and Blue Shield Association, an Association of Independent Blue Cross and Blue Shield Plans A Prescription Drug Plan offered by HCSC Insurance Services Company, an Independent Licensee of the Blue Cross and Blue Shield Association, under contract S5715 with the Centers for Medicare and Medicaid Services.