QUESTION: My grandpa lives in a nursing home. We signed him up for a Medicare drug plan earlier this year. We just learned that the nursing home uses a pharmacy that is not covered by his Medicare drug plan. What should we do?ANSWER: Many nursing homes contract with one pharmacy to provide medications for all residents of the facility. This means that an important consideration for nursing home residents is finding a Medicare drug plan that includes the pharmacy in its network. If your grandfather's Medicare drug plan does not contract with the pharmacy used by his nursing home, it would probably be a good idea to switch to another plan. Otherwise, your grandfather will likely have to pay more for using an out-of-network pharmacy to fill his prescriptions. And, this could be quite costly.Your grandfather might want to enroll in a plan that includes the pharmacy used by his nursing home to avoid these extra costs. You may want to ask the nursing home staff for a list of Medicare drug plans in the area that work with the pharmacy the facility uses.Once you have identified other Medicare drug plans that include the pharmacy, they can switch plans only once before May 15 and are then locked into their plan for the remainder of the year.

QUESTION: My wife and I have drug coverage through my former employer. With the start of the Medicare drug benefit, can my former employer eliminate drug coverage for us? Are there any federal laws preventing this from happening?ANSWER: Today, about one in three seniors relies on employer-sponsored retiree health benefits to supplement Medicare. Retiree health plans typically cover prescription drug and other valuable benefits, and the drug coverage offered by employers tends to be more generous than the standard Medicare drug benefit offered by Medicare prescription drug plans.Employers are not generally required to provide health benefits to workers or retirees, unless these benefits are protected under contract. As a result, employers generally have the option to terminate retiree health benefits at their discretion, including prescription drug coverage. You may want to do some research to see if your company-sponsored benefits are legally protected under a contract, and if so, for how long.During the debate over the Medicare drug law in 2003, lawmakers were concerned that employers would terminate coverage as the new drug benefit went into effect. The share of employers offering retiree health coverage has already declined quite a bit over the past 15 to 20 years.To discourage further terminations, the law included a subsidy for employers that continue to provide prescription drug coverage to their Medicare-eligible retirees.There is some good news, at least for 2006. According to recent surveys and government statistics, most employers are maintaining prescription drug coverage for their Medicare-eligible retirees. Over the longer term, it is less clear whether employers will maintain benefits for their retirees or choose to supplement the new Medicare drug benefit.You are right to stay on top of this issue. Each year, employers are likely to revisit the question of whether to maintain, modify, or drop retiree health benefits, and it is important to understand how you will be affected by these decisions.

QUESTION: I'm on Medicare and get my four medications free from a pharmaceutical company assistance program. I am afraid that I won't be able to afford my medicines if I have to give up this program and sign up for a Medicare drug plan. Can't I just stick with what I have?ANSWER: There have been many news stories about seniors who are worried about losing the help they get from programs sponsored by pharmaceutical companies. The concern arises because Medicare does not allow drug company programs to coordinate directly with the private Medicare drug plans. This means if someone signs up for a Medicare drug plan, they may no longer be able to get free or low-cost medications from one of these programs.For seniors who have been helped by one or more of these assistance programs, this can create quite a dilemma. On one hand, it might be tempting to stick with the programs to get help with relatively high-cost medications, particularly given uncertainties about the new Medicare drug plans. On the other hand, it is not clear whether the pharmaceutical assistance programs will be available to seniors in the future. Even if they continue, seniors could face a late enrollment penalty if they fail to sign up for a Medicare drug plan when they are first eligible.One option, at least in the short term, would be to continue to take advantage of these programs. But during this period, it would be a good idea to do some research so you are ready to sign up for a Medicare drug plan by May 15.In addition, if your income is below about $20,000 and you have resources below $11,500, you may qualify for the extra help in paying for prescriptions through the Medicare drug benefit. The extra help eliminates or significantly reduces the premium and deductible you would otherwise be required to pay and lowers your copayments to no more than $5 per prescription.

This column was prepared by the Kaiser Family Foundation, an independent, nonprofit private foundation based in Menlo Park, Calif., not affiliated with the Kaiser Permanente health plan. Send questions about the new Medicare drug benefit to Medicare Q & A, The Kaiser Family Foundation, 1330 G St., NW, Washington, DC 20005 or MedicareQ@kff.org.