December 10, 2003
TO: Chapter Presidents and Legislative Coordinators
RE: Medicare Prescription Drug Plan and the Federal Employees Health Benefits
Program
SUMMARY: Legislation adding a prescription drug benefit to Medicare has been signed into law by the President. A provision in the new law prohibiting the sale of Medigap policies should have no effect on the Federal Employees Health Benefits Program (FEHBP).
As you may know, the President has now signed legislation into law adding a prescription drug benefit to Medicare. The new benefit will become effective in 2006. One of the provisions of the recently signed legislation would prohibit the sale of Medigap policies that help pay drug costs after the new Medicare drug benefit becomes available.
Many federal retirees who are eligible for Medicare benefits also maintain coverage under the FEHBP. Federal retirees often refer to their FEHBP coverage as a “Medigap policy” because it pays benefits in areas that Medicare does not. However, FEHBP is not considered a Medigap policy for purposes of the provision included in the new Medicare drug coverage legislation. Federal employees eligible for Medicare will not be prohibited from continuing to also participate in the FEHBP.
Please share this information with your fellow employees and with the retirees in your chapter who might be concerned about this issue. If you have additional questions, please call Susan Shaw in the Legislative Department at 202-572-5500, extension 7048.
Colleen M. Kelley
National President