This is the time of year when we like to thank you for your membership and inform you of new plan changes for the upcoming year. If you do not want to change your coverage under UPREHS, you don’t need to do anything – you will automatically be reenrolled in the UPREHS Medicare Plans. Remember, if you cancel your UPREHS prescription coverage, you will also automatically cancel all other Medicare coverage under UPREHS. Beginning January 1, 2008, there will be some changes to your UPREHS Prime Medicare Plan prescription drug plan benefits that affect all Medicare prescription drug plans. Your Medicare HCPP and UPREHS Medicare Secondary Plan will remain the same. The following information is described in this letter:

• How will my monthly premium change for 2008?
  NO CHANGE to your UPREHS monthly premium of $210 per month that you pay for both UPREHS Medicare Plans.
• How will my prescription drug coverage and cost-sharing change for 2008?
  Medicare has made some changes to your prescription benefit cost sharing. See below and your Summary of Benefits.
• What if my drug is no longer on the formulary or is in a more expensive Tier in 2008?
  UPREHS includes ALL Part D drugs on our formulary. You will receive a new Formulary Book in a separate mailing. See your Benefit Guide to request a Tier exception.
• What do I need to know if I’m receiving extra help from Medicare to pay for my prescription drugs?
  See: What do I need to know if I’m receiving extra help from Medicare to pay for my prescription drugs?
• When can I change from one Medicare health plan to another?
  Rest assured that you will continue to be a member of the UPREHS Medicare Plans if you do nothing to change your Medicare coverage. Remember, if you leave UPREHS Medicare Plans, you may not have another opportunity to join.
• Where can I get more information?
  Telephone numbers for Medicare and UPREHS are listed in this notice.

However, you will continue to pay your Medicare Part B monthly premium as a separate cost in addition to your UPREHS premium. Most people will pay the standard Part B premium. For more information on Part B premiums based on income, call Social Security at 1-800-772-1213. TTY users should call 1-800-325-0778.

Note:  If you qualify for extra help, please refer to: What do I need to know if I’m receiving extra help from Medicare to pay for my prescription drugs?

How will my prescription drug coverage change for 2008?
UPREHS provides up to $765 for 2008 as an Enhanced Benefit amount to you in addition to your Medicare Part D Benefits. We pay your 2008 Part D deductible amount of $275. You are required to obtain your maintenance drugs (prescriptions taken longer than 30 days) from the preferred UPREHS Mail Order Pharmacy. You may obtain a one-time-fill or emergency prescription at our national chain of participating nonpreferred retail pharmacies.

• Your Initial Coverage Limit is $3,000 NOT $2,510 – UPREHS expands your Medicare standard benefit amount from $2,510 to $3,000 as an Enhanced Benefit.
• You do NOT pay the Part D deductible of $275 – UPREHS pays your $275 deductible for you as an Enhanced Benefit.
• Your copayments and drug costs at the UPREHS Mail Order Pharmacy are much less – Our costs are much higher for your drugs from the participating nonpreferred retail pharmacies.
• Your prescription drug copayments remain the same for 2008 as shown in the enclosed 2008 UPREHS Prime Medicare Plan Summary of Benefits.
• Your UPREHS pharmacy benefits are again expanded –UPREHS pays for the cost of some mental health drugs not covered by Medicare Part D and you pay the applicable Tier copay and/or the cost of these drugs once your Enhanced Benefit is used. These drugs are not applied to your Part D benefits or cost sharing. Drug examples are: Alprazolam, Diazepam, Lorazepam, Phenobarbital, Temazepam, etc.

Medicare has made changes to the Part D program, mostly with your cost sharing. There could be mid-year formulary changes made by Medicare, which generally are limited to changes that decrease cost or increase safety. We have enclosed a 2008 Summary of Benefits for both your UPREHS Prime Medicare Plan and your UPREHS Medicare Secondary Plan showing your basic benefits that will be effective January 1, 2008. We will be sending you a copy of your Formulary Book for 2008 in a separate mailing very soon. The UPREHS formulary includes all Medicare Part D drugs. Medicare has reviewed and approved the covered drugs listed in the formulary. If the Medicare Part D drug is not listed in our Formulary Book as a preferred drug under Tier 1, 2 or 4, then it is a nonpreferred drug in Tier 3. For a list of nonpreferred Tier 3 drugs, you may contact our Customer Services.

All drugs require the applicable copayment amount. Please review the formulary to see if the Part D drug you currently take is still covered.

The Formulary will also be found on our www.uphealth.com website after January 1, 2008. You can call UPREHS Customer Services at 1-800-547-0421 from 7:30 am to 3:30 pm, Monday through Friday, Mountain Time if you need any assistance locating a particular drug.

If you received approval for a formulary or tiering exception request during the 2007 plan year, coverage for the drug approved under the exception will end on December 31, 2007 and the 2008 formulary will be in effect.

• UPREHS pays your Medicare Part A and Part B Deductibles for 2008.
• UPREHS pays amounts approved but not paid by Medicare Parts A & B for most benefits.

When can I change from one Medicare health plan to another?
If you do not want to change your coverage, you don’t need to do anything – you will automatically be reenrolled in the UPREHS Medicare Plans. Your membership in the UPREHS Medicare Plans is unique and dependent on your railroad retirement and/or previous membership in UPREHS. Our plans are not open to the public like other Medicare plans. If you join another plan, CMS (the Centers for Medicare and Medicaid Services) will automatically disenroll you from the UPREHS Medicare Plans. Once you are disenrolled from UPREHS, you may not have another opportunity to join.

Every year, from November 15 through December 31 (during the Annual Election Period – AEP) everyone with Medicare will have an opportunity to switch from one way of getting Medicare to another for the following year. During this AEP, you have the opportunity to choose the plan that is best for you. All changes begin January 1, 2008 and will be in effect through December 31, 2008. If you do not want to change your coverage, you don’t need to do anything – you will automatically be reenrolled in the UPREHS Medicare Plans.

Outside of these time periods, you generally can’t make any other changes during the year unless you meet special exceptions, such as if you have Medicaid coverage, or if you get extra help in paying for your drugs.

If you join another Medicare plan, including a Medicare Prescription Drug Plan, you will be disenrolled from the UPREHS HCPP and Medicare Secondary Plan and the UPREHS Prime Medicare Plan when your enrollment in the new plan begins. Once you are disenrolled from UPREHS, you may not have another opportunity to join. If you leave the UPREHS plans and do not join a plan that offers Medicare prescription drug coverage or a Medicare Prescription Drug Plan, and you do not have prescription drug coverage that is at least as good as the Medicare standard prescription drug benefit, you may have to pay a late enrollment penalty if you decide to join later. This means your monthly premium will be higher.

• How we control the use of services and costs;
• The number of appeals and grievances filed by our members;
• A summary description of how we pay our doctors; or
• A description of our financial condition, including a summary of our most recent audit statement.

You can also get information about the Medicare Program and Medicare health plans by visiting www.medicare.gov on the web or by calling 1-800-MEDICARE (1-800-633-4227). TTY/TDD users should call 1-877-486-2048. Medicare customer service representatives are available 24 hours a day, seven days a week, to answer questions about Medicare.

Thank you for your membership in Union Pacific Railroad Employes Health Systems. We look forward to serving you now and in the future.

Your Friends at the Union Pacific Railroad Employes Health Systems

If you qualify for extra help, you pay a reduced UPREHS monthly premium. If you continue to qualify for the same amount of extra help next year, the table below tells how much your will pay for a monthly premium. (This does not include any Medicare Part B premium you may have to pay.)

You may receive (or have already received) a letter from Medicare, the Railroad Retirement Board, or the Social Security Administration (SSA) about your eligibility for extra help in 2008. Read this important information carefully. If you don’t know what level of extra help you qualify for, you can call 1-800-MEDICARE (1-800-633-4227) for this information. TTY/TDD users should call 1-877-486-2048. They are available 24 hours a day, 7 days a week. UPREHS does not make this determination and we receive the information from Medicare.

As an enhanced benefit, UPREHS offers additional coverage on some prescription drugs not normally covered in a Medicare Prescription Drug Plan. If you receive extra help from Medicare in paying for your drugs, you will NOT receive this extra help for these particular drugs. Please refer to the formulary being sent to you by separate mailing to see which drugs are covered by the enhanced benefit. Your copayment amounts for these drugs are dependent on the formulary Tier they are assigned and do not apply to your Part D benefits or cost sharing.

Benefits, formulary, pharmacy network, premiums and/or copayments may change on January 1, 2009. You may contact UPREHS for details.

Last Updated: 04/04/2008