Medicare Prescription Drug Coverage

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Medicare Prescription Drug Coverage
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Medicare Prescription Drug Coverage

• Referred to as Medicare Part D
• Available to everyone with Medicare
• Drug plans approved by Medicare
• Run by private companies
• Must be enrolled in a plan to get coverage
• Coverage provided through
• Medicare Prescription Drug Plans (PDPs)
• Medicare Advantage with Prescription Drugs
  (MA-PDs)

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Part D Eligibility Requirements

• To be eligible to join a Prescription Drug Plan
• You must have Medicare Part A and/or Part B
• To be eligible to join Medicare Advantage plan
  with drug coverage
• You must have Part A and Part B
• You must live in plans service area
• You cannot be incarcerated
• You must be enrolled in a plan

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Covered Drugs

• Prescription brand-name and generic drugs
• Approved by FDA
• Used and sold in U.S.
• Used for medically-accepted indications
• Includes drugs, biological products, and insulin
• Supplies associated with injection or inhalation

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Required Coverage

• All drugs in 6 categories must be covered
• Cancer medications
• HIV/AIDS treatments
• Antidepressants
• Antipsychotic medications
• Anticonvulsive treatments for epilepsy and other
  conditions
• Immunosuppressants

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Vaccines

• All Part D drug plans must cover
• All commercially available vaccines
• e.g., shingles vaccine
• Note Except those covered under Part B
• e.g., flu shot
• Contact drug plan for more information

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Drugs Not Covered by Part D

• Excluded by law from Medicare coverage
• Anorexia, weight loss or weight gain drugs
• Erectile dysfunction drugs
• Fertility drugs
• Drugs for cosmetic or lifestyle purposes
• e.g., hair growth
• Drugs for symptomatic relief of coughs and colds
• Prescription vitamin and mineral products
• except prenatal vitamins and fluoride
  preparations
• Non-prescription drugs
• Barbiturates and benzodiazepines
• To be covered in 2013

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Drugs Not Covered by Part D (continued)

• Medicare Part A or Part B covered drugs
• Unless you dont meet Part A or B coverage
  requirements
• Plan may choose to cover excluded drugs
• At their own cost, or
• Share the cost with members

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Access to Covered Drugs

• Plans must cover at least two drugs in each
  category
• Coverage and rules vary by plan
• Plans can manage access to drug coverage through
• Formularies (list of covered drugs)
• Prior authorization (doctor requests before
  service)
• Step therapy (type of prior authorization)
• Quantity limits (limits quantity for period of
  time)

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Formulary

• A list of prescription drugs covered by the plan
• May have tiers that cost different amounts

Example of Tiers (Plans can form tiers in different ways) Example of Tiers (Plans can form tiers in different ways) Example of Tiers (Plans can form tiers in different ways)
Tier You Pay Prescription Drugs Covered
1 Lowest copayment Most generics
2 Medium copayment Preferred, brand-name
3 Highest copayment Non-preferred, brand-name
Specialty Highest copayment or coinsurance Unique, very high-cost
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Prior Authorization

• Doctor must contact plan for prior authorization
• Before prescription will be covered
• Must show medical necessity for that particular
  drug
• Ask plan for prior authorization requirements
• Process for requests may vary by plan

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Step Therapy

• Type of prior authorization
• Person must try a similar, less-expensive drug
  that has been proven effective
• Doctor can request an exception if
• Tried similar, less expensive drug and it didnt
  work, or
• Step-therapy drug is medically necessary

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Quantity Limits

• Plans may limit the quantity of drugs they cover
• Over a certain period of time
• For reasons of safety and/or cost

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If Your Prescription Changes

• Get up-to-date information from plan
• By phone or on plans website
• Give doctor copy of plans formulary
• If the new drug is not on plans formulary
• Can request a coverage determination from plan
• May have to pay full price if plan still wont
  cover drug

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Formulary Changes

• Plans may change categories and classes
• Only at beginning of each plan year
• (Plan year is January through December)
• May make maintenance changes during year
• Plan usually must notify you 60 days before
  changes
• May be able to use your drug until end of
  calendar year
• May ask for exception if other drugs dont work
• Plans may remove drugs withdrawn from market
• By the manufacturer or the Food and Drug
  Administration, without 60 day notification

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Medicare Drug Plan

• Can be flexible in benefit design
• Must offer at least a standard level of coverage
• May offer enhanced benefits
• Benefits costs can change from year to year
• Monthly premium varies by plan
• Some plans have no premium
• Possible yearly deductible
• No more than 320 in 2012
• Copayments or coinsurance
• May depend on how much spent that year

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2012 Standard Coverage and Cost 2012 Standard Coverage and Cost 2012 Standard Coverage and Cost 2012 Standard Coverage and Cost 2012 Standard Coverage and Cost 2012 Standard Coverage and Cost
Benefit Stage Coverage Range Plan Pays Plan Pays Beneficiary Pays Beneficiary Pays
Annual Deductible 0-320 0 0 100 320
Initial Coverage 320-2930 (Next 2610) 75 1957.50 25 652.50
Coverage Gap 2930-6657.50 (Next 3727.50) 50 - Brand-name 14 - Generics 50 - Brand-name 14 - Generics 50 - Brand-name 86 - Generic 50 - Brand-name 86 - Generic
Catastrophic Coverage 6657.50 and up 95 No Maximum 5 No Maximum
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Monthly Premiums

• Starting January 1, 2011 part D monthly premiums
  may be higher based on income
• Includes PDP and MA-PD plans
• If income is above
• 85,000 filing individual tax return
• 170,000 filing a joint tax return
• Additional monthly adjustments will be charged in
  addition to part D premiums
• SSA will be contacting those who have to pay
  higher premiums in November

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True Out-of-Pocket Costs (TrOOP)

• TrOOP is the amount of money (out-of-pocket)
  that can be used to reach catastrophic coverage
• Payment sources that count
• Plan member
• Family members or other individuals
• Illinois Cares Rx payments
• SSA Extra Help (low-income subsidy)
• Charities
• Not if established/controlled by current/former
  employer or union
• Indian Health Services and AIDS Drug Assistance
  Programs
• Part D manufacturer discount for covered
  Brand-name drugs during coverage gap

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Out-of-Pocket Costs that Do Not Count

• Payment sources that do not count
• Monthly drug premium payments
• Group health plans
• Including employer or union retiree coverage
• Government-funded programs including TRICARE and
  VA
• Manufacturer Patient Assistance Programs
• Other third-party payment arrangements
• Part D plan discounts for covered drugs during
  coverage gap

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Coverage Gap Discount

• If you reach the coverage gap in 2012 you may
  receive discounts on both brand-name and generic
  drugs
• 50 discount on brand-name prescription drugs in
  2012
• 14 discount on generic drugs in 2012
• Additional savings in coverage gap each year
• Gap to be closed in 2020

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Cost Sharing for Brand-name Drugs in the Medicare
Part D Coverage Gap, 2010-2020
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Cost Sharing for Generic Drugs in the Medicare
Part D Coverage Gap, 2010-2020
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When you can Join or Switch Medicare Prescription Drug Plans When you can Join or Switch Medicare Prescription Drug Plans
Initial Coverage Election Period (IEP) 7 month period Starts 3 months before month of eligibility
Annual Open Enrollment Period (AOEP) October 15 December 7
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When You Can Join or Switch Medicare Prescription Drug Plans (continued) When You Can Join or Switch Medicare Prescription Drug Plans (continued)
Medicare Advantage Disenrollment Period (MADP) January 1February 14, you can leave an MA plan and switch to Original Medicare. If you make this change, you may also join a Medicare Prescription Drug Plan to add drug coverage. Coverage begins the first of the month after the plan gets enrollment form.
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When you can Join or Switch Medicare Prescription Drug Plans (continued) When you can Join or Switch Medicare Prescription Drug Plans (continued)
5-star Special Enrollment Period (5-star SEP) December 8, 2011 December 31, 2012 Beneficiaries will have a one-time enrollment into any 5-star plan. This will include both the Stand-alone prescription drug plan (PDP) or Medicare Advantage with drug coverage (MA-PD).
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When you can Join or Switch Medicare Prescription Drug Plans (continued) When you can Join or Switch Medicare Prescription Drug Plans (continued)
Special Enrollment Periods (SEP) You permanently move out of your plans service area You lose other creditable Rx coverage You werent adequately informed your other coverage was not creditable/was reduced and no longer creditable You enter, live in or leave a long-term care facility You have a continuous SEP if you qualify for Extra Help Or in exceptional circumstances
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Creditable Drug Coverage

• If you have other drug coverage
• It may or may not be creditable
• If creditable, it meets or exceeds Medicares
  minimum standards
• With creditable coverage
• Will not have to pay a late-enrollment penalty
• Plans inform yearly about whether creditable
• e.g. employer group plans, retiree plans, VA,
  TRICARE and FEHB

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Penalty Calculation Late Enrollment

• National base beneficiary premium
• 30.23 in 2012
• Can change each year
• Pay 1 (of 30.23 in 2012) for every month
  eligible but not enrolled
• Unless person has creditable coverage
• Penalty added to premium payment

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Extra Help with Drug Cost

• Sometimes called the Low-Income Subsidy (LIS)
• For people with lowest income and resources
• Pay no premiums or deductibles small or no
  copayments
• Those with slightly higher income and resources
• Pay reduced deductible and a little more out of
  pocket
• No coverage gap for people who qualify for LIS

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Qualifying for Extra Help

• Some will automatically qualify if they have
  Medicare and
• Get full Medicaid benefits
• Supplemental Security Income (SSI)
• Medicare Savings Program
• Medicaid help with some Medicare cost
• All others must apply with Social Security
• Online at www.socialsecurity.gov, or
• Call 1-800-772-1213 (TTY 1-800-325-0778)
• Ask for Application for Help with Medicare
  Prescription Drug Plan Costs (SSA-1020)

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Income and Resource Limits

• Income
• Below 150 Federal poverty level
• 16,335 per year for a single person or
• 22,065 per year for a married couple
• Based on family size
• Resources
• Up to 12,640 (individual)
• Up to 25,260 (married couple)
• Includes 1,500/person funeral or burial expenses
• Counts savings and stocks
• Does not count home you live in

2011 amounts
2011 amounts
Higher amounts for Alaska and Hawaii
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Auto- and Facilitated Enrollment

• CMS identifies and enrolls people each month
• Randomly assigned to plans
• Premiums at or below regional low-income premium
  subsidy amount
• May join MA plan meeting special needs
• If you are already enrolled in an MA plan
• Youll be enrolled in the same plan with Rx
  coverage (MA-PD)
• If offered by your current plan

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Medicare and Full Medicaid

• You are auto-enrolled in a plan unless
• You are already in a Part D plan
• You choose and join a plan on your own
• You call the plan or 1-800-MEDICARE to opt out
• You are covered 1st month you are covered by
• Medicaid and are entitled to Medicare
• Will get auto-enrollment letter on yellow paper
• You have a continuous Special Enrollment Period

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Others Qualified for Extra Help

• Facilitated into a plan unless
• You already are in a Part D plan
• You choose and join own plan
• Youre enrolled in employer/union plan receiving
  subsidy
• You call the plan or 1-800-MEDICARE to opt out
• Coverage is effective 2 months after CMS notifies
• Will get facilitated enrollment letter on green
  paper
• Have continuous Special Enrollment Period

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People New to Extra Help

• You can apply for Extra Help any time
• If denied, can reapply if circumstances change
• If in a Medicare drug plan and later qualify
• Plan is notified you qualify for Extra Help
• Plan refunds costs back to effective date of
  Extra Help
• Deductibles/Premiums
• Cost-sharing assistance

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Enrollment Notices

• CMS notifies people of enrollment in a PDP
• Auto-enrollment letter on yellow paper
• Facilitated enrollment letter on green paper
• Denotes either full or partial subsidy
• Includes list of area plans at/below regional
  low-income premium subsidy amount
• MA plan sends notice if enrollment in MA-PD

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Re-establishing Eligibility for People Who
Automatically Qualify

• CMS re-establishes eligibility in the Fall
• For next calendar year
• If you no longer automatically qualify
• CMS sends letter in September on gray paper
• Includes SSA application
• If you automatically qualify your copayment
  changed
• CMS sends letter In early October on orange paper

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Extra Help What You Pay
Group 1 100 FPL Group 2 100-135 FPL Group 3 135-150 FPL
Premium 0 0 Sliding scale based on income
Yearly deductible 310/year 0 0 60
Coinsurance up to 4,700 out of pocket 1.10/3.30 copay 2.60/6.50 copay Up to 15 coinsurance
Catastrophic coverage 0 0 2.60/6.50 copay
If you join a basic plan with a premium at or
below the regional low-income premium subsidy
amount.
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LI-NET

• Limited Income Newly Eligible Transition Program
  (LI-NET)
• Combined auto-enrollment and Point-of-Sale
  Facilitated Enrollment
• For full duals and SSI-only beneficiaries
• Provides Part D coverage for all uncovered
• Full duals and SSI-only beneficiaries
  retroactively
• LIS eligible beneficiaries on a current basis

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LI-NET Coverage and Enrollment

• Coverage
• Full Dual/SSI-only up to 36 months
• Partial Dual/LIS Applicants up to 30 days
• Unconfirmed up to 7 days
• Enrolled in LI NET for temporary coverage
• In Standard PDP for future coverage
• Open Formulary, No Prior Authorization, No
  Pharmacy Restrictions
• Standard PDP Rights for Enrollees, Eligibility
  Reviews for Non-Enrollees

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Access to LI-Net

• Three ways to access the LI-NET program
• Auto Enrollment by CMS
• Point of Service (POS)
• Submitting a receipt for drugs already paid
  out-of-pocket
• During eligible periods

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State Pharmacy Assistant Program (SPAP)

• In Illinois, SPAP is Illinois Cares Rx
• Two types of coverage
• Illinois Cares Rx Basic
• formerly Pharmaceutical Assistance Program
• Illinois Cares Rx Plus
• formerly SeniorCare
• Can also assist individuals not on Medicare

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Illinois Cares Rx for those on Medicare

• Will assist with some cost sharing with a
  coordinating plan
• Deductible up to 320 of total drug cost
• Initial coverage up to 2,930 of total drug cost
• Coverage gap from 2,930- 6,657.50 of total
  drug cost
• Catastrophic coverage begins at 6,657.50
  provides NO wrap coverage
• NOTE Applicants must apply for LIS through
  Social Security at least once and follow
  instructions from SSA if qualify for any portion
  of assistance

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State Pharmacy Assistance Program

• Medicare and Illinois Cares Rx
• Provides wrap-around coverage
• Must be enrolled in a coordinating PDP or MA-PD
  plan in order to get the wrap
• Pays the premium for a coordinating Part D plan,
  or
• Expands greatly the population served by the
  state of Illinois
• Costs incurred by IL Cares Rx can count toward
  out-of-pocket limit
• Applications can be filed on line at
  www.cbrx.il.gov/

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Medicare and Illinois Cares Rx

• Must meet annual income requirement of
• 21,780 for a household of 1
• 29,420 for a household of 2
• 37,060 for a household of 3
• Must follow Part D plan rules for coverage
• Must Apply for SSA Extra Help
• At least once, even if you do not meet
  requirements
• Income amounts are based on an application
  filed in 2010 using 2009 income

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Illinois Cares Rx

• For individuals who need drug assistance but are
  not on Medicare will have to
• Meet income requirements
• For Plus or Basic coverage
• Be 65yrs or older or
• Persons with disability
• Follow Illinois Cares Rx formulary list

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Illinois Cares Rx Basic

• Must be without Medicare coverage and either
• Age 65 or older, or
• A person with disabilities
• Annual income of no more than
• 21,780 for a household of 1
• 29,420 for a household of 2
• 37,060 for a household of 3

IL Cares Rx Basic Drug Coverage for 11 Disease Categories IL Cares Rx Basic Drug Coverage for 11 Disease Categories
Alzheimers Disease Arthritis
Cancer Diabetes
Glaucoma Heart and blood pressure problems
HIV/AIDS (if not eligible for Medicare) Multiple Sclerosis
Osteoporosis Parkinsons Disease
Lung Disease and smoking related illnesses Lung Disease and smoking related illnesses
Income amounts are based on an application
filed in 2010 using 2009 income
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Illinois Cares Rx Plus

• Illinois Cares Rx Plus provides coverage for
  almost all prescription drugs
• Must be a citizen or qualified non-citizen 65 or
  older without Medicare
• Annual income of no more than 21,780 (single)
  or 29,420 (married couple)
• Income amounts are based on an application
  filed in 2010 using 2009 income

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Things to Consider Before Joining a Plan

• Important questions to ask
• Do you have other current health insurance
  coverage?
• What about current prescription drug coverage?
• Is any prescription drug coverage you might have
  as good as Medicare drug coverage?
• How does your current coverage work with
  Medicare?
• Could joining a plan affect your current
  coverage?
• Could joining a plan affect a family members
  coverage?

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Annual Notice of Change

• All Part D plans send to all members by September
  30
• May arrive with Evidence of Coverage
• Will include information for upcoming year
• Summary of Benefits
• Formulary
• Changes
• New premium
• Cost sharing copayments and coinsurance
• Other

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Residents of Long-Term Care Facilities

• Get drugs from pharmacy chosen by facility
• Will have convenient access
• Can change plans at any time
• With Medicare and full Medicaid benefits
• Have no deductible and no copayments

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Coverage Determination

• Initial decision by plan
• Benefits a member is entitled to receive
• Amount member is required to pay for a benefit
• May be standard
• May be expedited
• Life or health seriously jeopardized

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Part D Exception Requests

• Two types of exceptions
• Tiers
• e.g., getting Tier 2 drug at Tier 1 cost
• Formulary
• Drug not on plans formulary or
• Access requirements
• Requests can be made only by you, your appointed
  representative, or the prescriber
• Requires supporting statement from physician

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Approved Exceptions

• Exception valid for refills for remainder of year
  if
• Person remains enrolled in the plan and
• Physician continues to prescribe drug, and
• Drug stays safe to treat persons condition
• Plan may extend coverage into new plan year
• If not, must send written notice
• At least 60 days before plan year ends

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Coverage Determination Timeframe

• Plan must notify of coverage determination
• Standard request within 72 hours
• Expedited request within 24 hours
• Exception involved
• Time clock starts when plan receives physician
  statement
• Missed timeframe
• Goes to independent review entity (IRE)
• MAXIMUS www.medicarepartdappeals.com
• Skip 1st level of appeal

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Requesting Appeals

• In general, appeal requests must be written
• Plans must accept expedited requests orally
• An appeal can be requested by
• Plan member
• Appointed representative
• 5 levels of appeals

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Resources

• Illinois Senior Health Insurance Program
• www.insurance.illinois.gov
• [phone]
• Medicare
• www.medicare.gov
• [phone]
• Medicare and You 2012 handbook
• Social Security Administration
• www.socialsecurity.gov