Medicare Prescription Drug Benefit: Part D

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Medicare Prescription Drug Benefit Part D

• John Coburn
• Health Disability Advocates
• www.hdadvocates.org
• www.makemedicarework.org

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What is Medicare?

• A federal health insurance program for
• People over 65 years old
• Some people with disabilities (receiving SSDI for
  ?24 months)
• People with end-stage renal disease (ESRD)
• People with amyotrophic lateral sclerosis (ALS),
  a.k.a. Lou Gehrig's Disease
• Administered by Centers for Medicare and Medicaid
  Services (CMS) within HHS
• Covers 41 million people - 35 million older
  adults and 6 million under age 65
• Benefit decisions controlled by the U.S. Congress
• Social Security Administration or Railroad
  Retirement Benefits handles enrollment

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Original Medicare has 2 Parts

• Part A
• Hospital Insurance
• Hospital, skilled nursing facility, home health,
  hospice
• Part B
• Medical Insurance
• Doctors, outpatient services, preventive
  services, lab tests, ambulance services,
  equipment and supplies

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Medicare Modernization Act (MMA) of 2003

• Signed into law December 8, 2003 (Public Law
  108-173)
• Largest expansion of Medicare since 1965
• Includes new options for prescription drug
  coverage and other changes

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Drug Options for Medicare Consumers in 2006

• Three ways for Medicare Consumers to get
  Prescription Drugs
• Employer-sponsored retiree health plans.
• 88 billion in incentives for employers to keep
  providing benefits.
• Medicare Part D Prescription Drug Plans (PDP).
• Medicare Advantage plans with drug coverage.

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Medicare Part D Drug Coverage Basics

• Starting in January of 2006, many Medicare
  Consumers will get their drugs through the Part D
  Prescription Drug Benefit.
• Medicare Consumers must identify, select and
  enroll in a private Prescription Drug Plan (PDP)
  before January of 2006.
• Plans contract with Medicare to provide drug
  benefit by regions (must be at least state-wide).
• Each plan negotiates its own prices and decides
  which drugs will be offered.
• Many low-income consumers on Medicaid will be
  auto-enrolled if they do not select a plan.

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Medicare Part D Basics

• There is a penalty if you dont enroll when first
  eligible
• For most existing Medicare consumers sign up is
  between November 15, 2005 and May 15, 2006.
• Exception if beneficiary has coverage that is
  creditable at least equivalent to Part D
  (retiree plans offered by employers or unions) or
  covered by their employer if still working.
• Plans must send enrollees notice of whether their
  plan is creditable.

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Medicare Part DDrug Plans and Their Formularies

• Formularies will be released October 15, 2005
• PDPs are required to carry at least two drugs for
  each of the 209 drug therapy categories.
• Should carry majority of six classes of drugs
  antidepressants, anti-psychotics,
  anticonvulsants, HIV/AIDS, anti-neoplastics,
  immuno suppressants.
• Can change drug formulary at any time with 60
  days written notice to enrollees. (Dual eligibles
  can change their PDPs every 30 days.)
• Some pain killers will not be provided by any PDP
  including Benzodiazepines, Valium, Xanax.

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Medicare Part D PDP Benefit Management Tools

• Plans can control costs by using various tools to
  steer enrollees to less costly formulary drugs
• Tiered co-payments
• Different cost-sharing for brand vs. generics
• Can require enrollee to pay 100 of cost
• Generic substitutions
• Prior approval/Prior authorization

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Medicare Part D Formulary Exceptions

• Process for PDP to pay for non-formulary drug
• Prescribing doctor determines that any formulary
  drug not as effective, adverse affects, or both
• Process to get prescribed drug at lower tier with
  lower co-pay
• Prescribing doctor determines lower-tiered drug
  not as effective, adverse affects or both
• ONLY ALLOWED ONE EXCEPTION PER DRUG

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PART D---BASIC COVERAGE

• Individual pays first 250 of drug costs
  (deductible)
• Individual pays 25 of costs between 250 and
  2250 (500)
• Individual pays 100 of costs between 2250-5100
  (2850) the doughnut hole
• Individual pays 5 of costs over 5100.
• To get to this catastrophic coverage limit,
  individual must spend 3600 of his/her own money.
• State Pharmacy programs and Patient Assistance
  Programs can help pay for costs and those
  payments will count towards the individuals
  true out of pocket costs to meet catastrophic
  limit.

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Medicare Part Dextra help

• Designed to help pay for cost sharing of basic
  benefit. Also called the Low-Income Subsidy.
• Full extra help Partial extra help
• Full extra help Pays for everything except small
  co-pay
• Partial extra help Pays for some of the cost
  sharing
• Some consumers will automatically get extra help
  others will need to apply depending upon income
  level and eligibility for Medicaid or the
  Medicare Savings Programs.

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Part D Full Benefit EligiblesAuto-Enrollment

• Certain categories of individuals will be
  automatically enrolled in the full extra help
  program.
• These individuals include those enrolled in
  Medicaid or a Medicare Savings Program (QMB,
  SLIB, QI-1).
• Although auto-enrolled for extra help, these
  individuals will still need to sign up for a PDP
  or they will be assigned to a PDP if on Medicaid
  or have enrollment facilitated if only on a
  Medicare Savings Program.

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Medicare Part D extra help---Application Required
Full extra help
Partial extra help
No extra help
Income- Up to 135 FPL Assets -6000/individual
9000/couple
Income 135 -149 FPL Assets -
10,000/individual 20,000/couple
Income 150 FPL Above

• Sliding scale premium assistance
• 50 deductible
• No Doughnut Hole
• 15 Co-Insurance up to 3,600 OOP (2/5 co-pay
  above)
• Application required

• Premium assistance
• No deductible
• No doughnut hole
• 2/5 co-pay up to 3,600 OOP
• Application required

Not Eligible for extra help
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Extra Help How to Apply

• Social Security responsible for enrolling in the
  extra help program
• Will send letters to those that are expected to
  be eligible beginning in June
• Many ways to enroll written application,
  on-line, phone
• Scheduled events posted at www.makemedicarework.or
  g
• Looking for places/events to assist people to
  enroll
• State DHS offices must also accept extra help
  applications and process them if requested
• CMS responsible for helping people enroll in Part
  D plans
• As well as handling auto-enrollment for extra
  help and in Part D for dual eligibles

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Proposed Rules ? extra help Appeals Process

• Initial Determination (60 days to appeal)
• Hearing Conducted by phone unless applicant does
  not want phone conference and then case review
  only (can present evidence and be represented -
  60 days to appeal)
• Appeal to Federal District Court
• State Medicaid agencies will determine own due
  process for apps filed with state agency

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STATE WRAP AROUND PROGRAMS What Happens to
SeniorCare Circuit Breaker?

• New legislation created Illinois Cares Rx Basic
  and Plus.
• All current enrollees will be enrolled in new
  program.
• Costs will stay almost the same.
• Formularies will be different.
• Non-Medicare beneficiaries will have no change in
  benefits.

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What is the State Wrap Around?

• Helps to pay for Medicare Part D for individuals
  over age 65 or under age 65 and disabled and
  under 225 FPL.
• Pays cost-sharing if person is not eligible for
  extra help or if extra help does not cover all
  expenses.
• Plus plan pays for PDP drugs only and Basic plan
  pays for 10 classes of PDP drugs only
  (cardiovascular and diabetes drugs are included.)

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Illinois Cares Rx Basic and Plus Specifics

• State pays for basic premium deductible 25
  co-insurance between 250-1750 5 of
  co-insurance between 1750-2250 80 of costs
  between 2250-5100.
• Only for drugs covered in PDP and in state plan.
• State will coordinate coverage with PDPs.

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Medicare Part D Implementation Important
Timelines

• May to August 2005 Extra help applications will
  be sent to potentially eligible individuals by
  the Social Security Administration.
• June 2005 Notices will be mailed to dual
  eligibles and individuals in MSPs to inform them
  they are eligible for extra help and will be
  automatically enrolled.
• October 15th All Medicare recipients will
  receive information on drug plans available in
  their area.
• November 15th Medicare recipients can enroll in
  a PDP.
• January 1, 2006 Part D Begins and Dual
  Eligibles automatically enrolled.
• May 15, 2006 Last Day to Enroll without Penalty.

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What Does this Mean for Medicare Consumers living
with HIV?

• Nothing changes for those receiving SSI only and
  Medicaid. Medicaid still covers their drugs.
• There may be changes in prescription drug
  benefits for your Medicare clients. Some may not
  see changes in what is covered, just how.

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What Does this Mean for Medicare Consumers living
with HIV? Dual Eligibles

• Individuals who are enrolled in both Medicare and
  Medicaid are in the dual eligible category.
• These individuals can no longer use Medicaid
  medical card to get prescriptions filled.
• Should receive letter from CMS deeming them
  eligible.
• Will need to choose drug plan that best fits
  their needs.

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What Does this Mean for Medicare Consumers living
with HIV? MSP Eligible

• Clients should apply for and become eligible for
  QMB, SLIB, Q-1, if they are eligible.
• They will then be deemed eligible for extra
  help.
• Will receive letter from CMS to confirm deemed
  eligible status.
• Need to choose a drug plan.

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What Does this Mean for Medicare Consumers Living
with HIV? Incomes Under 150 FPL

• If not eligible for QMB, SLIB, or QI-1, may be
  eligible to APPLY for extra help.
• Must apply for extra help to assure no donut
  hole, etc.
• Must pick a drug plan that meets their needs.

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What Does it Mean for Medicare Consumers living
with HIV? Above 150 FPL

• Check to see if enrolling in Medicaid with
  spenddown and meeting spenddown will help---they
  could be dual eligibles
• Health Benefits for Workers with
  Disabilities---Working and becoming dual
  eligible
• Otherwise, they pick a plan and have a donut
  hole..but wait, what about ADAP?

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What Does this Mean for Medicare Beneficiaries
Living with HIV? ADAP

• ADAP is the payer of last resort. Will Medicare
  Part D count as a payer? Seems to be a state by
  state decision.
• ADAP could decide to pay premiums, deductibles,
  co-insurance and co-pays.
• ADAP does not count toward OOP expenses, so it
  cannot get you out of the donut hole

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Need help deciding or applying?

• Progress Center for Independent Living ---
  708-209-1500
• HealthCare Choices Resource Center (Suburban Area
  Agency on Aging) --- 1-800-789-0003
• SHIP counselors --- 1-800-548-9034