For example, while the prescription drug discount cards will be offered to Medicare enrollees, they are not required to buy them. These cards are for those who have no prescription drug coverage and must wait for the new drug benefit to start in 2006.

"Be careful what you read, simply because it may be addressed to an entirely different audience than public retirees," cautions Association Counsel Bill Rehrey. "You will likely receive mailings from insurance companies and others about the drug program, that doesn't necessarily make it crystal clear as to who can really be helped by the new program. As we stressed before, stick with your current coverage."

Despite our assurances in the January Voice, we have received calls from our members who remain concerned that the new law will impact - possibly eliminate - their current Medicare supplement insurance. Nothing can be farther from the truth since state law mandates that the state, cities and towns provide a Medicare supplement plan.

Also, members are worried that they will be forced to take the new coverage, even though it is voluntary, because they had to transfer into Medicare when they turned 65. "Under the state law that made you enroll in Medicare Parts A and B, you can't be forced to pay for Part D which is the new drug program," comments Rehrey.

Since the federal drug program became law, we've taken additional time to once again review the details and determine whether members should even contemplate enrolling in it as an add-on (safety precaution) to their current coverage. And we've reached the same conclusion - don't enroll in Part D come '06.

"If one considers an annual $420 premium and $250 deductible, plus a 25% co-payment on drug purchases over $251 and up to $2,250, then the new drug program will not benefit most members whatsoever," states Rehrey. "Don't spend your money foolishly on Part D."

Another interesting aspect to the new federal law is the $88 billion that has been earmarked as financial incentives for employers, both private and public, not to drop their retiree health coverage and continue to offer their insurance. While the state and municipalities cannot drop insurance coverage for retirees, they may still be eligible for the incentives.

Under the incentive package - the details of which have yet to be finalized, the federal government will essentially be reimbursing public and private employers for 28% of their total drug costs for Medicare retirees if they offer equivalent or better drug benefits than the new Part D.

Since it's a fair assumption that in 2006 the state, cities and towns will continue to offer a better drug benefit program than will be provided by Medicare, they may be eligible for the 28% reimbursement. For the state insurance program alone, this could result in millions being reimbursed to it from the federal government.

According to the state's Group Insurance Commission (GIC), there were 38,663 in the GIC's Optional Medicare Extension plan who spent over $250 on prescription drugs during Fiscal '03. In that group, over $81.4 million was spent on drug costs (from $251 to $5,000 depending upon each person's situation) for this group of retirees and dependents.

Assuming there are similar numbers and costs in 2006, then the state could be receiving an estimated $22.8 million (or 28% of $81.4 million) from the feds. While experiencing relatively smaller costs, cities and towns would also be receiving reimbursement, possibly in the millions, toward the prescription drug costs of their retirees and employees.

"Obviously, we're taking about a program that will be implemented some two years from now, yet it deserves watching until then," according to the Association's Shawn Duhamel. "We must ensure that if federal funds are helping to defray these costs for state and local governments, then their retirees will also benefit from this."