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Joint Informational Hearing. The Federal Medicare Prescription Drug Act: State Readiness, Implementation, and Consumer Issues. Bonnie Burns, Training and Policy Specialist. Key Decisions Required.

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joint informational hearing

Joint Informational Hearing

The Federal Medicare Prescription Drug Act: State Readiness, Implementation, and Consumer Issues

Bonnie Burns, Training and Policy Specialist

key decisions required
Key DecisionsRequired
  • Unlike Medicare Parts A and B, the new Medicare Part D prescription drug benefit will require people to take independent action and apply for benefits.
  • Unlike other Medicare benefits, people with Medicare need to select a benefit package for prescription drugs from a universe of offerings, and sign up with the provider of a benefit package that comes closest to meeting their needs.
    • Original Medicare and a PDP (designs and benefits vary), a Medicare Advantage HMO and PD, a MA-Private Fee for Service Plan with or without PD benefits.
impact on consumers
Impact on Consumers
  • Decision #1
    • Enroll in Part D, or not
      • May depend on their existing coverage
        • Retiree benefits and employer decision determine enrollment in Part D
        • Medigap and Rx benefits compared to Part D
        • Duals are automatically enrolled
        • Low income must enroll for premium subsidy
      • Notices from employers and Medigap insurers due in September
  • Decision #2
    • Choose a Part D plan
      • Basic or enhanced plan, PDP, MA-PD, or other
      • Information not available until October
    • Duals automatically assigned to a plan
      • Can switch to a more suitable plan
        • Subsidy may not cover cost of all available plans
choosing a pdp or ma pd
Choosing a PDP or MA-PD
  • Inventory current medications
    • Name of drug, strength, quantity, brand or generic
  • Comparison and selection
    • Compare each Part D Plan (PDP and MA-PD)
        • Basic or enhanced benefits offered
        • Formulary (Rx on or off), multiple tiers for brand and generic
        • Pre-authorization rules
        • Cost sharing, deductible, co-pays
        • Network requirements preferred, non-preferred providers
        • Premium
      • Select a PDP or MA-PD and enroll
    • HICAP can help
      • Call 1-800-434-0222 for appointment
  • Auto enrolled in Part D premium subsidy (July)
    • May not comprehend switch from MediCal
    • CMS may not know of other coverage
      • Employer sponsored coverage
        • Dependent or retiree
  • Auto assigned to a Part D Rx plan (October)
    • Can switch to another plan
      • Not all premiums will be equal to the federal subsidy
    • May not understand new coverage
    • May not know how to use new system
    • Rx plan may not include every drug needed by enrollee
low income
Low Income
  • Need to enroll in Part D
    • Can do so through
      • SSA, public Social Services office, online, or mail in official application
  • Must choose a Part D plan
    • Free standing PDP or MA-PD
      • Choose plan with premium equal to federal subsidy
      • Understand how to use new system
      • Understand and pay co-payments based on income
  • Duals and low income in nursing homes
    • Have special needs for enrolling in Part D and choosing an appropriate Part D Rx plan
    • Duals will not have any co-pay requirements
medigap in 2006
Medigap in 2006
  • Must choose between Medigap and Medicare Rx
    • Medigap notice September 2005
      • IF Medigap Rx benefits are at least as good as Part D benefits can keep Medigap Rx and no late enrollment for Part D will apply
      • Otherwise enroll in Part D
        • Keep same plan without Rx or choose another Medigap
          • Premiums will probably not go down
      • Any Rx benefits received in 2006
        • Will NOT count towards Part D costs
        • Will delay eligibility for catastrophic limit
        • Are grounds for expulsion from MA-PD
  • No Medigap Rx benefits can be sold on or after 1/1/06
    • Two new Medigap plans can be sold in addition to existing 10 plans plus 2 riders
retiree plans
Retiree Plans
  • Employers* can receive 28% federal subsidy, tax free, for enrollees NOT enrolled in Part D
    • To offset their costs for Rx benefits as good as, or better than Medicare’s
      • Retirees can delay enrollment in Part D without penalty
      • Employers must notify retirees by September 2005
  • Employer options without subsidy
    • Supplement basic Medicare benefit
    • Contract with PDP or MA-PD for Medicare and retiree benefits
    • Contract with Medicare as a PDP

*Including CalPERS, although no tax benefit applies

conflicting messages
Conflicting Messages
  • Multiple agencies (SSA, CMS, DHHS)
    • Encourage enrollment in Medicare Part D
      • Multiple staggered mailings
      • Print and electronic media
    • Emphasize benefits and penalty for delay
  • Employers accepting the subsidy
    • Likely to notify retirees once
      • Not to enroll in Part D
        • Retirees that sign up for Part D when the employer has signed up for the federal premium subsidy could lose all medical benefits, not just Rx.
potential for changes
Potential for Changes
  • Benefit changes may occur during a year
    • Network changes (in, out, preferred and non-preferred)
    • Formulary changes
      • Drug changes tiers (co-pay changes)
      • Brand name converts to generic only
      • Drug added, substituted or dropped from formulary
    • Prior authorization added or changed
  • Duals
    • Co-payments not paid
      • Pharmacy refuses to dispense Rx
    • Change to the wrong plan
      • Premium higher than subsidy
    • Join a MA-PD plan
      • Providers not in the network

Demand for Services and the Impact on HICAP

1) States begin to notify dually eligible of change to Medicare and Part D subsidy

2) SSA low-income subsidy application available online

3) SSA begins making eligibility decisions on low-income applications

1) Employers notify retirees about choices and Part D

2) Medigap companies notify about choices and Part D

3) State agencies notify dually eligible of loss of MediCal Rx

1) SSA begins monthly mailing

to newly eligible beneficiaries

2) CMS mailing to all dually eligible beneficiaries

1. Part D Plan information available to compare

2. CMS assigns dually eligible to a Part D plan

SSA test mailing to 2,000 low-income beneficiaries

Enrollment in Part D plans begins

Medi-Cal benefits end for dual eligible

SSA begins mailing notice of eligibility for Part D premium subsidy and an application form to 2,000,000 low -income beneficiaries

Impact on Local HICAP Projects and Counselors

1) More individualized counseling sessions required

2) Counseling sessions likely to take longer

3) Additional counseling sessions likely to be needed

4) Complexity of issues likely to be greater

5) Fewer resources available for other topics

CMS Education Campaign for Part D

state leadership options
State Leadership Options
  • Expand an enhance HICAP capability
    • Staffing and in-house internet capability
      • Staff to recruit, train and supervise volunteers and assist with appeals for Part D problems
      • Internet single source of comparison information on Rx plans
  • Leverage and coordinate resources at the state level
    • Local SSA, CMS and DHHS offices coordinate with local HICAP offices on community outreach efforts
  • Statewide advertising campaign
    • HICAP availability
  • Wrap around Medicare for duals and low income
    • Cover co-payments and drugs not on formularies
    • Provide premium support for better coverage