Medicare Prescription Drug Coverage: Only the Basics for Now

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Medicare Prescription Drug CoverageOnly the
Basics for Now

• Kathy Greenlee
• State Long-Term Care Ombudsman

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Lets Start With What We Already Know

• Medicare
• Medicaid
• Private Insurance
• Long Term Care Insurance
• Medicare Supplement (Medigap)
• Retiree Health Insurance
• Our Own Money

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Coverage for LTC Costs and Prescription Drug Costs

• Medicare Limited LTC, no drugs
• Medicaid LTC, drugs
• Private Insurance
• Long Term Care Insurance LTC, no drugs
• Medicare Supplement no LTC, limited drugs
• Retiree Health Insurance no LTC, drugs
• Our Own Money - LTC and drugs until you run
  out of

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Options to Pay For LTC

• Medicare skilled care, limited days
• Medicaid ongoing if eligible
• LTC Insurance until benefit maximum
• Private Money until exhausted

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Options to Pay for Prescription Drugs

• Medicaid If eligible
• Medicare Supplement limited
• Retiree Health Insurance
• Private Money until exhausted

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Medicare Prescription Drug Plan Impacts All of
These

• Medicare
• Medicaid
• Private Insurance
• Long Term Care Insurance
• Medicare Supplement (Medigap)
• Retiree Health Insurance
• Our Own Money

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Medicare

• Most people with Medicare may voluntarily enroll
  in a PDP.
  
• People with Medicare and Medicaid will be
  automatically enrolled.
  
• Medicare will begin paying prescription drugs for
  people who are dually eligible for Medicare
  Medicaid.
  
• PDP is offered through private insurers
• This is a public/private partnership.

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Medicaid

• Beginning 1/1/06, Medicaid will no longer pay for
  prescription drugs of people on Medicare and
  Medicaid.
  
• This is a significant change.
• Drug coverage is being switched from Medicaid to
  Medicare.
  
• This will impact NH residents.

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Private Insurance

• Long Term Care Insurance
• No impact from the new drug benefit.
• Medicare Supplement Insurance
• Old plans with drug benefit no longer sold.
• New limited drug benefit plans.
• Retiree Health Insurance
• May or may not be equivalent to the new
  prescription drug plan.
  
• Retirees will be told if they are equivalent.

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Your Own Money

• If a consumer does not voluntarily enroll,
  nothing changes. They still use private to
  pay for drugs.
  
• Consumers who enroll in a PDP will have to pay a
  premium, co-pay, deductible and coverage gap.

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Review PDP Impacts All of These

• Medicare
• Medicaid
• Private Insurance
• Long Term Care Insurance
• Medicare Supplement (Medigap)
• Retiree Health Insurance
• Our Own Money

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Now The Details

• The PDP Benefit
• Financial Assistance
• Dual Eligibles

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Prescription Drug Benefit

• Coverage begins January 1, 2006
• Available for all people with Medicare
• Provided through
• Prescription drug plans (PDPs)
• Medicare Advantage Plans (MA-PDs)

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Prescription Drug Plans

• At least 2 offered in Kansas
• Must offer a basic drug benefit (standard
  benefit)
  
• May offer supplemental benefits(enhanced
  benefits)
  
• Flexibility in design of plan

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Example of Standard Prescription Drug Coverage

• Generally less than 37 monthly premium
• 250 deductible
• Coinsurance of 25 of drug costs from 250 to
  2,250
  
• Medicare pays 75
• 100 of drug costs from 2,250 to 5,100
• After 3,600 in out-of-pocket costs, Medicare
  pays approximately 95

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Medicare Part D Drug Benefit
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Formulary

• PDPs will most likely have a formulary
• Tier 1 is lowest cost sharing
• Other tiers have higher costs
• Plan must have exceptions process for tiered
  formulary.
  
• Most include 2 drugs for every class of drugs.

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Enrollment in Part D

• Enrollment voluntary for most people with
  Medicare.
  
• Nov. 15, 2005 to May 15, 2006
• Must enroll in a plan to get coverage
• Enroll directly with PDP
• Retiree coverage may be comparable.
• Enrolling when you are first eligible means you
  pay a lower premium
  

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Postponing Enrollment

• Higher premiums for people who wait
• Exception for those with drug coverage at least
  as good as a Medicare prescription drug plan
  
• Assessed 1 of base premium for every month
  delay
  
• Eligible to enroll in a Medicare prescription
  drug plan but not enrolled
  
• No drug coverage as good as a Medicare
  prescription drug coverage for 63 consecutive
  days or longer

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Financial Assistance

• People with limited resources may apply for
  financial assistance to help with the cost of the
  prescription drug plan.
  
• Social Security Administration is processing
  those applications.
  
• They are being mailed beginning this month.
• Enrollment begins July 1, 2005.

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Low Income Two Step Process

• Apply for financial assistance with SSA between
  now and next fall.
  
• Next fall, enroll in a Prescription Drug Plan.

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Dual Eligibles

• People who live in nursing homes who receive
  Medicare Medicaid will be automatically
  enrolled in and assigned to a PDP.
  
• Enroll is random.
• Resident will be notified in mid-October of
  assigned plan.
  
• Resident may select a different plan at any time.

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Auto Enrollment

• This is a safety net for nursing home residents.
• But, assigned plan does not guarantee best plan
  for the resident.
  
• Residents can decide to change plans.
• Who will help them make that decision?

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Formulary Transition Issues

• Dual eligible residents will be switched from the
  current Medicaid formulary to the formulary of
  the new PDP.
  
• People are guaranteed to receive the same class
  of drugs, but not the exact same drug.
  
• Concern for people with multiple prescriptions.
• Some provisions for temporarily filling old
  prescriptions.

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Appeals Process

• There will be an appeal process to help if
• Exact drug is not covered under new plan and
  similar drugs wont work.
  
• Drug is covered but in an expensive tier of the
  formulary (not a Medicaid issue, impacts others
  who private pay).

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What is your role?

• Learn what you can.
• We will provide more training at volunteer
  meetings in the fall.
  
• Reassure Medicaid people that there is a safety
  net.
  
• Tell low income that there is help.
• Everyone else, this is voluntary.

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It Takes Everyone

• SRS is training staff
• KDOA is training staff
• Senior Health Insurance Counseling for Kansans
  (SHICK)
  
• Training advocates of all kinds
• LTC Facilities are training staff
• We are training staff

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Timeline

• Low Income Applications Now
• Medicare You book, October
• Dual Eligible notification of assigned plan,
  October
  
• Voluntary enrollment, November to May
• CMS Outreach Campaign, next fall