Starting January 1, 2006, Medicare prescription drug coverage will be available to all people with Medicare, regardless of income, health status, or current health care coverage.

Up to now, Medicare has provided health insurance coverage for hospital costs and physician visits, but it has not provided coverage for prescription drugs. Now all people with Medicare will have the option to sign up for prescription drug coverage.

The new drug coverage will be available through Medicare Prescription Drug plans. There will be a lot of information in the mail, on the radio, and on television urging people with Medicare to sign up for a Medicare prescription drug plan. Medicare will also work with employers and unions to ensure that people who currently receive drug coverage through their former employer or union can continue to do so. For more information, see If You Have Existing Coverage.

Three things you should know:

1. This is an optional benefit for most individuals
   Individuals who already have retiree prescription drug coverage from a former employer or union, may not need or want to join a Medicare Drug Plan, especially if it would affect their current retiree prescription drug coverage. If you currently have existing drug coverage, please see If You Have Existing Coverage for important information.
2. Enrollment is not automatic
   If you want to join a Medicare Prescription Drug Plan you must enroll between November 15, 2005 and May 15, 2006. See Important dates for more information.
3. You may pay penalties later if you do not enroll
   If you currently do not have existing drug coverage that is at least as good as the Medicare prescription drug coverage, you will pay a penalty if you decide to enroll at a later time.

If you don't use a lot of prescription drugs now, you still should consider joining. As they age, most people need prescription drugs to stay healthy. If you think you might want the drug coverage at any time in the future, you should enroll between November 15, 2005 and May 15, 2006. Like Medicare Part B, if you do not join when you first become eligible, you may pay a higher premium when you join later. The new prescription drug coverage does not affect your current Medicare Part A and B. It is a new option.

If you would like to learn more about the Medicare Prescription Drug Coverage either for yourself, or to help friends or family members, please read on for more information.

For Lilly employees and retirees who are Medicare eligible, please contact HR Direct if you have questions.

These materials were prepared in March 2005 by the Centers for Medicare & Medicaid Services. They are intended for training purposes only and are not legal documents.