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Medicare Part D Impact and Considerations

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  1. Medicare Part D Impact and Considerations Christine A. Rivera, Director Uninsured Care Programs New York State Department of Health 518.459.1641 car05@health.state.ny.us Empire Station, PO BOX 2052 Albany NY 12220-0052 March 2006

  2. Insurance Cash ADAP Enrollees Medicaid Recipients Low Income Subsidy <135% FPL Medicaid / Medicare Eligible SPAP Spend down Access to HIV Drugs ContinuumChallenging Environments PAP Medicare Part D Drug Benefit Higher Income Individuals Lower Income Individuals

  3. Medicare Medicare Part D Drug Benefit • Available to Medicare eligible beneficiaries • More comprehensive pharmacy benefits for low income and senior participants • Varying benefit levels based on income • Change in the way drugs are accessed • Will impact approximately 10-15% of ADAP / Medicaid participants Medicare

  4. Medicare Medicare Part D Drug Benefit (Cont.) • More complicated decision making process for patients and participants – people need to apply for the Low Income Subsidy and pick a Prescription Drug Plan (PDP) • There are cost sharing requirements for individuals • Enrollment in Part D is optional • Delayed enrollment = Higher premium costs, increase by 1% per month every month after 5/2006 Medicare

  5. Medicare Part D OverviewStandard Benefit • Voluntary Enrollment – anyone who is eligible for Medicare Parts A or B • Individuals need to apply for coverage, enroll in a PDP • Beneficiary Expenses • Monthly Premium, est. $400 per year (2006) • $250 deductible • 25% of the next $2,000 • 100% of the next $2,850 – “donut hole” • 5% above $5,100 – total or $3,600 Out of Pocket Expenses - Catastrophic Coverage

  6. Out of Pocket Spending Part D Coverage Medicare Out-of-Pocket Spending For Higher Income Medicare Beneficiaries Catastrophic Coverage 5% $5,100 = to $3,600 Out-of-Pocket (OOP) Spending No Medicare Coverage / Donut Hole $2,850 Gap 100% OOP $2,250 Partial Coverage up to $2,250 25% Deductible $250

  7. Medicare Part D OverviewLow-Income Subsidies • Individuals with incomes between 135% and 150% of FPL ($14,355) • Individuals need to apply for Part D and “extra help” separately • Asset Test $10,000 (Individual) and $20,000 (Couple) • Premium $0 - $400 per year depending on income • Deductible $50 • No donut-hole • Co-payment 15% until catastrophic coverage and $2/$5 co-payments for the rest of the year

  8. Out of Pocket Spending Part D Coverage Medicare Low Income Subsidy Out of Pocket Spending >135% - 150% of FPL Co-payments $2 generic and $5 brand Catastrophic Coverage Full Coverage Co-payments Only Co-payments $2 generic and $5 brand Partial Coverage up to $5,100 in total drug costs 15% Deductible $50

  9. Medicare Part D OverviewLow-Income Subsidies • Individuals with incomes below 135% of Federal Poverty ($12,920) • Individuals need to apply for Part D and “extra help” separately • Asset test $6,000 (individual) and $11,000 (couple) • No premium or deductible • No donut-hole • Co-payment: $2 (generics) $5 (brands) until catastrophic coverage then $0 co-payments for the rest of the year

  10. Out of Pocket Spending Part D Coverage Medicare Low Income Subsidy Out of Pocket Spending <135% FPL Catastrophic Coverage No Co-payments Medicare Coverage Coverage up to $5,100 in total drug costs Co-payments $2 generic and $5 brand No Deductible No Premium

  11. Medicare Part D OverviewDual Eligible, Medicare and Medicaid Coverage • On January 1, 2006 Medicare replaces Medicaid drug coverage for “full” duals • Dual Eligible Beneficiaries will be automatically enrolled in Medicare Part D and automatically assigned to a Prescription Drug Plan this fall and can change plans each month • Dual Eligible People will have • No premiums • No deductibles • No donut hole • Lower co-payments: • below 100% FPL pay $1/$3, • 100% - 135% of FPL pay $2/$5 • $0 Co-payments when drug costs reach Catastrophic Coverage

  12. Out of Pocket Spending Part D Coverage Medicare Dual Eligible, Medicare and Medicaid Coverage Catastrophic Coverage - $5,100 in total drug costs No Co-payments Co-payments $1 generic and $3 brand No Deductible No Premium

  13. Spend down Medicaid Spend-down and Medicare Part D Medicaid Spend-down or surplus is for people who make too much money for Medicaid. If they can show they spent that “extra” or “surplus” income on health care costs – they will be eligible for Medicaid. • Medicare will consider anyone who meets their Spend-down: • During the Fall of 2005 • Or during their first benefit month of 2006 • Dually eligible (Medicaid/Medicare) for the full year • ADAPs need to evaluate the cost effectiveness of continuing to cover spend-down participants on an individual basis

  14. ADAP and Medicare Part D • Federal Ryan White dollars can be used to meet cost sharing requirements. ADAP can help pay the cost of premiums, deductibles and co-payments • Enrollment in a Part D plan is “required” for people also enrolled in ADAP, unless the participant has “creditable” insurance coverage. Medicare ADAP

  15. Insurance Medicare Part D and Insurance Coverage • People with private coverage will get information from their insurance company about whether the plan they have is “creditable” • Coverage is “creditable” if it is as good as Medicare D – if coverage is “creditable” then people can delay enrollment in Part D without having a penalty. • Retirees may have to enroll with a Part D plan so that their coverage can wrap around Medicare D

  16. SPAP SPAP – State Pharmaceutical Assistance Program • SPAP, a program that is eligible to assist enrollees in meeting out of pocket costs associated with participation in Part D. • ADAP’s should review the criteria for enrollment in SPAPs and work to coordinate with their SPAPs if appropriate. • Additional SPAPs can be created – provided they are created through a discreet state funded administrative process and the cost of coverage through the SPAP is not counted toward the Title 2 maintenance of effort requirements.

  17. Medicare Part D - Issues and Challenges For ADAP’s • Assessment What are benefits of coordinating with Medicare Part D? Will participants have access to broader drug coverage? Is the administrative structure in place to determine eligible participants, coordinate benefits and assess impact? • Affordability What is the potential cost/savings? Can ADAP afford the cost of developing the administrative infrastructure? • Access to information: What do we need to Coordinate Benefits (COB) with Medicare? How is this information made available? Where can I go for help? • Adaptation: How do we implement the systems to make COB with Medicare a benefit for ADAP and participants?

  18. Medicare Drug Coverage – Formularies and Drug Plans • Formulary Review is conducted by CMS – no plan (PDP) is allowed to participate in Part D whose formulary would deter someone with a particular illness from enrolling in that plan. • CMS requires that “all or substantially all” drugs in the antidepressant, antipsychotic, anticonvulsant, anticancer, HIV/AIDS and immunosuppressant categories be included on plan formularies. • Plans can implement all cost containment tools used by commercial insurance, prior approval, tiered drug coverage, formularies etc. HOWEVER, plans cannot use prior authorization or step therapy for HIV/AIDS medications, except for Fuzeon

  19. Medicare Part D Prescription Plans – Advice for Participants • Is there a relationship with the pharmacist? Look at Plans that the Pharmacy participates with. • Look for a plan that covers the Medications the individual needs. • Look at the costs associated with the plan – Premium, Deductible, and Co-payments and select the plan with the lowest cost. Who can help with these costs? • Call 1-800-MEDICARE (1-800-633-4227) for information. • Use the Medicare Prescription Drug Plan Finder on the internet at www.medicare.gov

  20. Medicare Drug Coverage – Formularies and Drug Plans • Plans must provide an override and appeals process for drugs denied to participants. • If a plan refuses to provide covered drugs notify CMS at 1-800-Medicare, ask to speak to the regional office. • Pharmacists can call 1-866-835-7595

  21. Help for the costs of enrolling in Medicare Part D • Apply for “Extra Help” through the Social Security Administration. • ADAP may help with the co-payments and deductibles if a drug is covered by both ADAP and Medicare Part D. • If eligible apply for another State Pharmaceutical Assistance Program (SPAP) for help with the cost sharing.

  22. Medicare – New Language Emerges • MMA = Medicare Modernization Act • SSA = Social Security Administration • CMS = Centers For Medicare & Medicaid Services • Part D = the section of the Act that establishes a Medicare Drug benefit • Full “Duals” = People who are eligible for both Medicare AND Medicaid • Low Income Subsidies (LIS)= those individuals who are not Medicaid eligible but have income less than 135% of Federal Poverty Level

  23. Medicare – New Language Emerges (Continued) • SPAP = State Pharmaceutical Assistance Program = a program that is eligible to assist enrollees in meeting TrOOP’s and other out of pocket costs. • PDP’s = Prescription Drug Plan • MA-PD’s = Medicare Advantage (managed care plans – these plans also cover primary care services) who also cover drugs through Part D

  24. Medicare – New Language Emerges (continued) • Low Income Subsidies Coverage = lower cost fairly comprehensive coverage for drugs through Medicare / Extra Help • Standard Benefit = available to higher income individuals with higher cost sharing • OOP = Out of Pocket expenditures, these are the costs the person will have to pay to access the Medicare Drug Benefit • TrOOP = True Out of Pocket expenditures = costs paid by the individual that count toward costs necessary to reach catastrophic coverage

  25. Medicare resources and networks. For information on Medicare Part D call: 1-800-MEDICARE (TTY 1-877-486-2048) To enroll in “extra help” call Social Security: 1-800-772-1213 (TTY)1-800-325-0778

  26. Medicare Resources • Social Security Administration • socialsecurity.gov • Center for Medicare and Medicaid Services (CMS) • www.medicare.gov • http://www.cms.hhs.gov/medicare/ • Medicare Rights Center • www.medicarerights.org • Health Resources and Services Administration (HRSA) • www.hrsa.gov/medicare/HIV/about.htm • Kaiser Family Foundation • www.kff.org/medicare • Center for Medicare Advocacy • www.medicareadvocacy.org

  27. Medicare resources and networks (cont’d) • Treatment Action Network • TAN@projectinform.org • Families USA • www.familiesusa.org • New York AIDS Coalition • www.nyaidscoalition.org • HIV Medicine Association • www.hivma.org