Medicare Prescription Drug Benefit: Part D

1
Medicare Prescription Drug Benefit Part D

• Health Disability Advocates
• www.hdadvocates.org
• www.makemedicarework.org

2
Drug Options for Medicare Consumers

• Three ways for Medicare Consumers to get
  Prescription Drugs
• Employer-sponsored retiree health plans.
• 88 billion in incentives for employers to keep
  providing benefits.
• Medicare Part D Prescription Drug Plans (PDP).
• Medicare Advantage plans with drug coverage.

3
Medicare Part D Drug Coverage Basics

• Starting in January of 2006, many Medicare
  Consumers began getting their drugs through the
  Part D Prescription Drug Benefit.
• Medicare Consumers identify, select and enroll in
  a private Prescription Drug Plan (PDP).
• Plans contract with Medicare to provide drug
  benefit by regions (must be at least state-wide).
• Each plan negotiates its own prices and decides
  which drugs will be offered.
• Many low-income consumers on Medicaid will be
  auto-enrolled if they do not select a plan.

4
Medicare Part D Basics

• There is a penalty if you dont enroll when first
  eligible
• Medicares enrollment period is the 3 months
  prior to an individuals 65th birthday, the month
  of their birthday, and the 3 months following
  their birthday.
• 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.

5
Medicare Part DDrug Plans Their Formularies

• PDPs are required to carry at least two drugs for
  each of the 209 drug therapy categories.
• Should carry majority of six classes of drugs
  antidepressants, anti-psychotics,
  anticonvulsants, HIV/AIDS, anti-neoplastics,
  immunosuppressants.
• Can change drug formulary at any time with 60
  days written notice to enrollees. (Dual eligibles
  can change their PDPs every 30 days.)
• Some pain killers will not be provided by any PDP
  including Benzodiazepines, Valium, Xanax.

6
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

7
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

8
PART D---BASIC COVERAGE

• Individual pays first 265 of drug costs
  (deductible).
• Individual pays 25 of costs between 265 and
  2400 (533.75).
• Individual pays 100 of costs between
  2401-5451.25 (3050.25) the doughnut hole.
• Individual pays 5 of costs over 5451.25.
• To get to this catastrophic coverage limit,
  individual must spend 3850 of his/her own money.
• State Pharmacy programs and Patient Assistance
  Programs can help pay for costs and those
  payments will count towards the individuals
  true out of pocket costs to meet catastrophic
  limit.

9
Medicare Part Dextra 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.

10
Part D Full Benefit EligiblesAuto-Enrollment

• Certain categories of individuals 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).
• Although auto-enrolled for extra help, these
  individuals will still need to sign up for a PDP
  or they will be assigned to a PDP if on Medicaid
  or have enrollment facilitated if only on a
  Medicare Savings Program.

11
Medicare Part D extra help---Application Required
Full extra help
Partial extra help
No extra help
Income- Up to 135 FPL Assets -7620/individual
12,190/couple
Income 135 -149 FPL Assets -
11,710/individual 23,410/couple
Income 150 FPL Above

• Sliding scale premium assistance
• 53 deductible
• No Doughnut Hole
• 15 Co-Insurance up to 3,850 OOP (2.15/5.35
  co-pay above)
• Application required

• Premium assistance
• No deductible
• No doughnut hole
• 2.15/5.35 co-pay up to 3,850 OOP
• Application required

Not Eligible for extra help
12
Extra Help How to Apply

• Social Security responsible for enrolling in the
  extra help program
• Many ways to enroll written application,
  on-line, phone
• Scheduled events posted at www.makemedicarework.or
  g
• Looking for places/events to assist people to
  enroll
• State DHS 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

13
Proposed Rules ? extra help 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

14
STATE WRAP AROUND PROGRAMS What Happens to
SeniorCare and Circuit Breaker?

• New legislation created Illinois Cares Rx Basic
  and Plus.
• All current enrollees will be enrolled in new
  program.
• Costs will stay almost the same.
• Formularies will be different.
• Non-Medicare beneficiaries will have no change in
  benefits.

15
What is the State Wrap Around?

• Helps to pay for Medicare Part D for individuals
  over age 65 or under age 65 and disabled and
  under 225 FPL.
• Pays cost-sharing if person is not eligible for
  extra help or if extra help does not cover all
  expenses.
• Plus plan pays for PDP drugs only and Basic plan
  pays for 10 classes of PDP drugs only
  (cardiovascular and diabetes drugs are included.)

16
Illinois Cares Rx Basic and Plus Specifics

• State pays for basic premium.
• You pay 2.15 co-pays for generic drugs, 5.35
  co-pays for preferred brand name drugs, 15 for
  specialty and non-preferred brand name drugs, and
  20 plus co-pays once 1750 in drug benefits are
  paid on your behalf.
• Only applies to drugs covered in PDP and in state
  plan.
• State will coordinate coverage with PDPs.