Small Accounts Health Insurance Options from

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Medicare Part D Overview
Richard White Regional Vice President Product
Management Anthem Blue Cross and Blue Shield
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Medicare Part DOverview

• All individuals entitled to Medicare Part A or
  enrolled in Part B are eligible
• Medicare enrollees on Medicaid (Dual eligibles
  now receive most of their drug benefit from Part
  D
• Some drugs not covered by Part D are still
  provided by Medicaid
• Enrollees pay a premium equal to approximately
  25 of the average cost
• Reduced premiums and enhanced benefits are
  available for eligible low-income/asset
  individuals
• Covered drugs vary by company and must meet CMS
  formulary requirements
• Annual open enrollment period

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Medicare Part DThe Standard Benefit 2006 to 2007

• 2007 Annual deductible is 265
• Coinsurance of 25, up to initial coverage limit
  of 2,400 in 2007
• Enrollee responsible for 100 of costs between
  ICL and TrOOP
• TrOOP is 3,850 which results in catastrophic
  coverage for the Standard benefit starting at
  5,451.25
• Catastrophic coverage The enrollee pays the
  greater of 5 or 2.15 for generic or 5.35 for
  brand

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Medicare Part DActuarial Equivalent (AE) designs

• Law allowed for AE designs that on average pay
  out the same amounts during the initial coverage
  limit
• All plans must offer either the standard benefit
  or one actuarially equivalent plan
• The government pays the premium or applicable
  percentage for plans who bid below the LIS amount
  for a given state. If the person enrolls in a
  different plan they would have to pay the entire
  difference in cost
• Law also allowed Plans to offer enhanced AE
  designs in addition to AE

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Medicare Part DActuarial Equivalent (AE) designs

• Deductibles Some plans do not require a
  deductible
• Generic co-pay typically 5 to 10
• Tier 2 brand co-pay typically 20 to 30
• Tier 3 brand co-pay if offered, typically
  ranges from 50 or 60 or co-insurance
• Injectibles and specialty drugs can be
  covered on a separate co-insurance tier _at_ 25 to
  33
• Coverage gap begins when persons drug cost reach
  2,400

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Medicare Part D2006 Product Offerings - Virginia

• 60 of the Plans offered in VA filled the
  deductible
• Preferred option among non-subsidy enrollees
• Only 4 of 17 companies offered the Standard
  plan
• The rest of the 37 plan designs offered had
  co-pays and two or three tier designs for
  non-injectibles
• Over 2/3s of the plans covered injectibles with
  a co-insurance ranging from 25 to 33
• 5 companies offered a plan with coverage in the
  donut hole
• Formulary breadth and tier placement varied
• Prices ranged from 8.81 to 68.61

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Medicare Part DLow Income Assistance

• In addition to the Standard Benefits, individuals
  eligible for low income assistance have an
  enhanced benefit design that offers additional
  coverage. Three kinds of Medicare beneficiaries
  are eligible for low income assistance
• Full-benefit dual eligible beneficiaries (those
  eligible for both Medicare and Medicaid) whose
  incomes are equal to or less than 100 of the
  Federal poverty level (FPL)
• Beneficiaries who have incomes lower than 135 of
  the FPL and who have liquid assets up to 6,000
  individually or 9,000 as a couple (2007 asset
  levels have not been announced).
• Beneficiaries who have incomes over 135 of the
  FPL but less than 150 of the FPL and who have
  liquid assets up to 10,000 individually or
  20,000 as a couple

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Low Income Benefits
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Medicare Part D2007 Timeline

• Companies submitted product designs and bids on
  June 5, 2006
• Companies can begin marketing on October 1, 2006
• CMS will publish information concerning 2007
  products on October 12, 2006
• Enrollment runs from November 15 to December 31,
  2006
• During this annual enrollment window,
  beneficiaries can enroll in Part D if they
  previously chose to delay enrollment, or they can
  switch PDPs. Also Medicare Advantage options
• Persons with special enrollment periods (SEPs)
  can enroll at other times
• Dual eligibles have a monthly SEP

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Medicare Part DLow-Income

• As of July 144,580 persons in Virginia had
  applied to SSA for LIS Assistance
• 121,467 decisions had been made
• 60,749 were approved
• Additional 20,709 did not need a decision
• Nationally 57 of denials are related to asset
  test