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Medicare Part D Overview John Coburn, Attorney Health & Disability Advocateswww.hdadvocates.org March 2005
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
Medicare Part D Implementation Important Timelines • 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 • June 1, 2006 (or maybe before!)---All other “extra help” individuals enrolled into Prescription Drug Plan
MMA: IT DOES NOT APPLY TO EVERYBODY!!!!!!!!! Remember: This new drug coverage does not apply to everybody. SSI/Medicaid individuals still receive drug coverage from Medicaid.
Well, Who Does It Apply To? • Must be eligible for Medicare Part A and/or enrolled in Medicare Part B (red, white and blue card) • In general Medicare is a federal health insurance program for: • People 65 years old and over • 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
“No Thank You….I don’t want/need Part D” • Medicaid • Retiree/Employer Health Insurance • State Pharmaceutical Assistance Programs (SeniorCare) • AIDS Drug Assistance Programs • Drug Company Patient Assistance Programs • Private Company Drug Discount Programs • Veterans’ Benefits
BASIC Medicare Part D Benefit • Monthly Premium Averaging $32 • Pay first $250 of drug costs per year • Pay 25% of drug costs between $250 and $2250 (Individual pays $500, Medicare pays $1500) • Pay all drug costs above $2250 until total TRUE OUT OF POCKET (“TROOP”) drug spending for year is $3600. • After $3600, small co-payments or 5%.
What? Say that Again? • Starting when they sign up, a person goes in for their meds. • Before the benefit begins, they will pay the first $250 of drug costs. • Then, they will pay a portion of the drug cost, and Medicare will pay a portion. (SO YOU SAVE SOME $) • Once they reach $2250 in drug costs paid by almost ANYBODY, their coverage STOPS! • Coverage picks back up again when their True Out of Pocket Costs reach $3600.
What is Counts Toward True Out Of Pocket? • Anything you, a friend, or a relative pays on your behalf. • If SeniorCare or something like it started again, anything they pay. • Patient Assistance Program money, but legal troubles! • Charity such as SeniorPharmassist.
Basic Medicare Part D: What are the Plans Actually Doing? • Premiums range. • Most plans tier drugs during first phase of insurance: generic, preferred brand, non-preferred brand, or specialty. • Some cover the doughnut hole for generics only. At least one plan covers non-generics. • Catastrophic is basically the same.
“Well, I cannot afford that. What do I do?” • Some individuals qualify for extra help. • Status “extra help”: based on qualification for another program • Income/Asset “extra help”
Categories of Coverage Under Federal Medicare Part D • Basic, No “extra help” • Partial “extra help” • Full “extra help” • QMB, SLIB, QI-1, SSI without Medicaid Auto-Enrollees • Dual Eligible Auto Enrollees
Medicare Part D:“extra 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.
Part D Full Benefit Eligibles—Auto-Enrollment • Certain “categories” of individuals should have been or 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) or SSI without Medicaid.
Reminder: What is a “Dual Eligible” Individual? • Defined as enrolled in Medicare and Medicaid • Includes individuals who are: • Eligible for Medicaid and Enroll with No Deductible • Eligible for Medicaid and Enroll with Deductible and meeting deductible in second half of 2005 or now. • Does NOT include individuals who are: • Not eligible for Medicaid due to resources; • Eligible for Medicaid with a deductible and not meeting the deductible; • Not enrolled in Medicaid at all (deductible too high)
Reminder: What is QMB, SLIB, QI-1? • Known by different names in NC. • This is the program where NC Medicaid pays the premium for Medicare • In Medicare, they are know as the “deemed eligibles” now.
Medicare Part D: Full Subsidy & Must Apply • Individuals with incomes up to 135% of the federal poverty level and not on a Medicaid or cost sharing program (“Income Eligible”) • Individuals with countable resources of $6000 for an individual and $9000 for a couple • Individuals must enroll in Medicare Part D plan and enroll in low-income subsidy program (2 step process) • Same cost sharing as “deemed eligibles”
Medicare Part D: Partial Subsidy • Individuals with incomes up to 150% of the federal poverty level • Individuals with countable resources of $10,000 for an individual and $20,000 for a couple.
Medicare Part D extra help---Application Required No extra help Full extra help Partial extra help • Income – 150% & Above FPL Income- Up to 135% FPL Assets -$6000/individual $9000/couple • Income – 135 -149% FPL • Assets - $10,000/individual • $20,000/couple • Sliding scale premium assistance • $50 deductible • No Doughnut Hole • 15% Co-Insurance up to $3,600 OOP ($2/5 co-pay above) • Application required Not Eligible for extra help • Premium assistance • No deductible • No doughnut hole • $2/5 co-pay – up to $3,600 OOP • Application required
Extra help – How to Apply • Social Security responsible for enrolling in the “extra help” program • Letter sent to those that are expected to be eligible beginning in June. • Many ways to enroll – written application, on-line, phone • Look for places/events to assist people to enroll and case managers should assist people in enrolling • State Medicaid 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
Income: Who counts and whose income counts? • Federal Poverty Levels Used • Count individual and spouse (if residing with individual) income. • Count individual, spouse (if residing with individual) and anyone related by blood, marriage or adoption who is living with individual and is dependent for at least one-half of support. • Not all income counts. There are deductions for all income and large deductions for employment income.
Final Rules — Subsidy Eligibility: Resources • Follow SSI Resource Rules • Includes all Liquid Assets • Excludes Real Estate in Which a Person Resides and utilizes most other SSI exclusions • Does not consider transfer of resources rule • $1500 burial exclusion if individual alleges that he/she will use resources toward burial
General Subsidy Rules: Changing Categories • Dual Eligible status should last for all of 2006. • Changes in income will only change eligibility determination the following year. • Cannot switch from partial to full or visa versa during the year. • Can apply for extra help at any time so could qualify mid-year for this.
Final Rules ― Low Income Subsidies: 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
What Does this Mean for Medicare Consumers? • 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 consumers. Some may not see changes in what is covered, just how.
What Does this Mean for Medicare Consumers? 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. • Should have received yellow letter in November assigning them to a plan. • Will need to choose drug plan that best fits their needs.
What does this mean for Medicare Savings Program participants? • They are automatically eligible for extra help. • They can pick a plan now. • If they don’t pick a plan, they will be enrolled into a plan in June.
What Does this Mean for Medicare Consumers? Incomes Under 150 FPL • If not eligible for Medicaid or Medicare Savings Programs (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. • If they don’t pick a plan but have applied for and been determined eligible for “extra help”, they will be put into a plan in June.
What Does it Mean for Medicare Consumers? Above 150 FPL • They will have a lot of cost sharing. • They may be uninterested in signing up for this. But, there could be a penalty if they don’t (discussed later). • Some of the programs they have relied on will go away.
Medicare Part D: Basics • There is a penalty if you don’t enroll when first eligible • for most existing Medicare consumers sign up is between Nov 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.
Drug Plans and Their Formularies • Formularies released October 15, 2005 and finalized November 15, 2005. • PDPs are required to carry at least two drugs for each of the 209 drug therapy categories. • Should carry all or substantially all 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 and QMB, SLIB,QI-1s can change their PDPs every 30 days.) • Some drugs are Medicare Part D excluded, but some are still showing up on plans with 100% cost share.
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 • Step Therapy
Medicare Part D: Drug Formularies and the Six Categories • PDPs must allow individuals who are successfully taking medications within these six categories to continue taking these drugs (without requiring prior approval or step therapy). • All and substantially all includes all drugs approved and available as of January 1, 2006. • HIV drugs have more protection.
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
Part D Coverage: What are the Plans Doing? • Prior authorization • Step Therapy (details unclear) • Limits on Amount Distributed • Tiering the Drugs: generic, preferred brand, non-preferred brand, speciality • Listing Medicare Part D excluded drugs with 100% co-pay or discounted price • Vast Coverage Differences.
Negotiating Coverage: A Newer Concept for Consumers • Environment is much different with several plans and a lot of different levels of coverage. • Consumers need to take several factors into account. • Plan may have gaps. Consumers have to know how to fill these gaps through processes.
Categorize Individuals Again to Guide them in Deciding on New Plans • Depending on level of extra help and “extra help” category, there will be much different considerations in choosing a plan. • Those without full extra help must take financial issues into account. • Those with full extra help must look at formulary issues.
Picking a Plan: Dual Eligibles, Deemed Eligibles and Full Extra Help Applicants • Are all of my drugs on the formulary? • What benefit management tools are attached to my drugs? • Do I want to consider a higher priced premium plan with better coverage? • Is my pharmacy included or is this even important to me?
Picking a Plan: Everybody Else • Are all the drugs on the formulary? • What are the benefits management tools? • What premium am I willing to pay? • What is the deductible? • What are the co-payments attached to my drugs? • Is my pharmacy coordinating with the plan or is this important to me? • Am I qualified for my state’s SPAP and are the coordinating with the plan?
Picking a Plan: Tools for Assistance • www.medicare.gov • 1-800-Medicare • SHIP • Plan websites. • Call the plans to confirm!
Resolving Coverage Issues: Dual Eligibles and Medicare Savings Enrollees • Can change plans every month! • Upset with plan: Change! Consumers may need info on how to enroll and pick another plan. • Or, if no other plan will work, may have to file an exception.
Resolving Coverage Issues if Cannot Change Plans: The Exceptions Process • Each plan is required to have exception process. • Plans have specific “grounds” for granting exceptions. • One exception per drug and must be renewed every year. • Standard and Expedited Process
Exceptions Process Overview • Exceptions Process starts at the pharmacy. • Very important to have the doctor involved IMMEDIATELY. • Legal Aid has special project to help with exceptions
Challenges of Implementation and Emerging Issues---Dual Eligibles • Transition of 6.2 Million individuals from Medicaid to Medicare has its rough spots! • CMS has taken several steps and implemented several procedures. • Several States have implemented emergency Medicaid coverage for duals.
Duals Charged Wrong Prices: Identifying where it went “wrong” • State must give name to federal. • Federal must give name to plan. • Plans must share information if people switch. • Identifying the breakdown is key. • Proof of Medicaid coverage should be enough to override wrong cost sharing amounts. • Will be a big issue for people transitioning to Medicare or becoming Medicaid eligible at some point in the future.
Duals Not Assigned to Plan • Wellpoint is the fall back plan. • Pharmacies should be able to enroll duals without a plan immediately into Wellpoint. • Dual will stay in Wellpoint regular plan unless he/she chooses another plan.
Other Protections • Every Plan is required to fill current prescriptions for 30 days (transition period) even if not on formulary. • Government has asked plans to extend this to March 31. • If a person pays wrong cost share or is later determined eligible for “extra help” back to date of application, can request refund from the plan. • Tap into resources in your area and what is happening through SHIP, Aging Agencies, etc. This stuff changes by the minute!
Questions? John Coburn Health & Disability Advocates 312-218-0941 email@example.com