Medicare Modernization Act:

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• Medicare Modernization Act
• What you need to know
• now for 2004!
• Senior Health Insurance Information Program
• Sponsored by the Indiana Department of Insurance
  and funded by the Centers for Medicare Medicaid
  Services

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New Medicare Benefits Under The Medicare
Prescription Drug, Improvement, andModernization
Act of 2003 (MMA)Public Law 108-173 signed into
law by President George W. Bush on December 8,
2003

• Overview
• Medicare-Approved Drug Discount Card (2004)
• New Preventive Benefits (2005)
• Prescription Drug Benefit-Part D (2006)
• Medicare Advantage Programs (2006)

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MEDICARE-APPROVEDDRUG DISCOUNT CARD

• Estimated savings of 10-25 on many drugs for
  persons entitled to Parts A or B of Medicare
• Available June 2004
• This is a temporary program
• June 1, 2004 - December 31, 2005

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Background . . .

• Enrollment is VOLUNTARY.
• It will not be a Medicare cardbut a Medicare
  approved card
• Two elements
• Basic discount card
• 600 transitional assistance program
• program for income at or below
• 12,569 for single (2004)
• 16,862 for married (2004)
• This card is NOT intended to be a drug benefit.

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How Do These Programs Work?A card is provided
by a private company that offers discounts on
certain drugs. People with Medicare can present
the card at the pharmacy and get
discounts Very Simplified Example Retail /
AWP Card 1 Card 2Drug A 105.00
99.00 90.64Drug B 40.00
35.00 38.70TOTAL 145 134
129.34The savings from discount card is
estimated to be in the range of 10-15 on total
drug spending with discounts of up to 25 or more
on individual prescriptions.
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Who is eligible?

• Beneficiaries who are entitled under
• Part A and/or B of Medicare
• Individuals with
• outpatient prescription
• drug coverage from
• Medicaid are not eligible
• for a discount card

Enrollment Fees can be no more than 30 per year
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About Card Sponsors . . .

• Approximately 40 companies in Indiana.
• Types of companies Pharmacy Benefit Management
  Companies, insurers, wholesalers, Medicare
  Choice.
• Companies must meet Medicare standards
  problems? Call 1-800-MEDICARE.
• Each company will offer their own prices and
  program
• Companies may provide a mail order option, but
  may not require members to use mail order

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Covered Drugs?

• Many companies may use formularies to get better
  prices
• -The company must offer discounts on drugs
  commonly needed in more than 200 classes of
  drugs. Generic drugs must also be offered in
  most classes where generics are available.
• -Even if a drug is not on a companys formulary,
  the 600 can still be used to purchase the
  prescription drug.
• Companies will obtain rebates and discounts on
  drugs and a share of these rebates will be passed
  through to enrollees

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More on covered drugs . . .

• Syringes and medical supplies associated with
  insulin are included
• Over the counter (non prescription drugs) may
  also be discounted but cannot be used on the 600
  benefit
• Prices can change weekly (Medicare will monitor
  for bait and switch tactics)

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Price Comparison?

• Medicare will make available price comparisons
  using data on all drug card programs/prices and
  state prescription programs on www.medicare.gov.
  PDAP (Prescription Drug and Other Assistance
  Programs) uses a series of questions to produce
  personalized search results.
• Any one can use the website directly
• Or call the 1-800-MEDICARE line for assistance.
  Operators will use the website and send you a
  hard copy comparison (mailed out within 5 days)
• Or talk to a SHIIP volunteer counselor

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More on price comparison . . .

• Prices displayed will be a drugs maximum price
  for an approved companys service area
• People with Medicare must determine which company
  offers the best combination of drugs and prices
• It may be challenging for beneficiaries to sort
  through the programs and pricing information.

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Important points
Participants can have only one Medicare-approved
card at a time. They may not change cards except
during the annual Enrollment Period (November 15
through December 31, 2004). To enroll,
beneficiaries will fill out an enrollment form,
sign, and mail it to the company they have
chosen. No one will be offering the cards
door-to-door or calling you about the
cards. Beneficiaries can have other drug discount
cards.
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What is transitional assistance? 600

• Medicare will provide people with Medicare 600
  in 2004 and up to 600 in 2005 if their income is
  not more than 135 of poverty, and they do not
  have drug coverage from other sources
• 12,569 for single (2004)
• 16,862 for married (2004)
• Funds are provided through their Medicare
  approved discount card
• They cannot qualify for 600 if they get
  outpatient drug coverage through Medicaid,
  TRICARE, individual coverage, employer group
  health insurance, or FEHBP.

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More on the 600 credit . . .

• Coinsurance 5 or 10 depending on income
• Medicare will pay the enrollment fee for people
  that qualify for the 600 each year
• In 2004, beneficiaries can enroll any time and
  get the full 600. Any remaining funds will
  rollover into 2005.
• In 2005, the 600 benefit will be prorated based
  on when they enroll. The amount will be reduced
  by 150 in every quarter starting in April 2005.

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Enrollment Process for the 600 credit?

• Beneficiaries will self certify income, family
  size, and drug coverage
• Submit enrollment form to Card company
• Medicare will verify the enrollment information
  with Medicaid, SSA, or IRS
• If they are eligible, they can begin receiving
  discounts and using your 600 as early as the
  first day of the following month
• They are eligible for the 19 months
• Individuals found to be ineligible can request a
  reconsideration

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What about Managed Care and Hoosier Rx?
Medicare managed care plans may offer
exclusive card programs that limit enrollment to
their own members. Only Wellborn in Southwest
Indiana has offered a Medicare-approved Drug
Discount Card.
People with Medicare can have a
Medicare-Approved Discount Card and still qualify
for Hoosier Rx. Starting June1, they could
receive up to 1200 in benefits from Hoosier Rx
based on the time they apply. There is a 25
co-pay. Net Monthly Income Guidelines for
2004 Single or widowed 1,068 Married
1,426 !
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What about people with Medicare who have a
Medicaid Spend-down?

• Once a beneficiary has the 600 credit, CMS will
  not take it away because of Medicaid eligibility.
  It is available for both 2004 and 2005 as long
  as he or she does not change Card Sponsors.
• CMS recommends that beneficiaries apply for the
  600 credit before they apply for Medicaid or
  Medicaid with a spend-down.
• Once a beneficiary has Medicaid with a
  spend-down, only the 5 or 10 co-pay will count
  toward the spend-down..

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Steps for your Clients . . .

• Decide if she wants a Discount Card
• Make a list of the prescriptions currently taken
• Find out which Cards are available in her area
  and allow her to use the pharmacy she wants. If
  she travels, she should consider a national card.
• Get information on each one and compare which
  offers the best prices on your prescriptions
• Choose the one that best meets her needs
• Fill out and send application to the company
• Get information about her (or his) current drug
  coverage

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Conclusion

• The drug card is an interim step
• It will provide savings of 10-25
• It will provide 600 to low income people with
  Medicare
• Beneficiaries will be able to compare actual
  dollar prices across different cards and programs
  at www.medicare.gov or by calling
  1-800-MEDICARE or call SHIIP at 1-800-452-4800,
  Ext. 4

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More in conclusion . . .

• In some instances, the best program for a given
  set of circumstances might not be the Medicare
  approved discount card.
• If your client is eligible for the 600 credit,
  he or she may also be eligible for other
  assistance such as the Medicare Savings Program
  (QMB, SLMB, or QI-1), Hoosier Rx, Food Stamps,
  other prescription programs, etc.
• The Medicare Prescription Drug Plan (Part D)
  starts in 2006