Part Ds LowIncome Benefits: Theory and Reality

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Part Ds Low-Income Benefits Theory and Reality

• Marc Steinberg, Families USA
• Health Action 2006
• January 26, 2006 Washington, DC
• msteinberg_at_familiesusa.org
• [phone]

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Low-Income Provisions

• Premiums and co-payments heavily subsidized
• Enrollment automatic for dual eligibles and some
  others (in theory)
• Voluntary enrollment for others

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Dual Eligibles Medicares Neediest

• 6.2 Million Full Dual Eligibles
• Qualify for Medicare based on age or disability
• Qualify for Medicaid based on income
• Poorer and sicker than average beneficiaries
• 60 live below poverty
• Medicaid covered Rx prior to January 1, 2006

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Dual Eligibles v. Other Medicare Beneficiaries,
2002source Kaiser Family Foundation, based on
CMS data
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Dual and non-dual beneficiaries by
race/ethnicity, 2002source MedPAC, 2005
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Dual eligible coverage
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Subsidy-eligible plans

• Subsidy equal to average BASIC benefit
• Limited choice
• Florida 43 PDPs, 6 full subsidy
• Maryland/DC 47 PDPs, 15 full subsidy
• Different utilization patterns for duals may not
  be reflected in formularies

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Changes from Medicaid for dual eligibles

• Higher co-pays in about half the states indexed
  to inflation
• Co-pays not automatically waived
• Formularies with utilization management
• Duals can change plans monthly
• Some drugs not covered under Part D
• More restrictive appeals

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Automatic enrollment of dual eligibles The
Theory

• Automatically assigned to low-cost standard plan
  in region before January 1, 2006
• Random assignment for those who do not choose
• Right to change plans at any time
• Those in Medicare Advantage (MA) assigned to that
  MA-PD
• Plans should provide all current meds for 30 days
  during initial transition
• POS backup system

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Automatic enrollment of duals The Reality

• Conflict with retiree coverage
• Enrollment or subsidy info missing at pharmacy
• Transitional benefits limited or non-existent
• Little information on exceptions/appeals
• Data exchanges slow
• Plans unresponsive

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Duals transition Emergency response

• Many thousands dont get prescriptions
• Pharmacists give short-term fill
• 20 states have filled gaps
• Reimbursement of states and individuals unclear

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Non-dual Low-Income Coverage (Extra Help)
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Concerns for non-dual low-income beneficiaries

• Enrollment voluntary
• Must sign up for Extra Help
• Separate process than choosing plan
• Exception Medicare savings programs
• Get subsidy automatically
• Enrollment into plan automatic after May 15
• Major outreach needed Social Security
  Administration is lead agency

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Problems with subsidy enrollment

• Small Enrollment so far
• 1 mill/ 5.7-6.7 million eligible
• Tough population to reach
• MSP experience 60 enrollment typical
• SSA enrollment process
• Includes life insurance and in-kind income
• Slow processing
• Medicaid agencies not participating actively
• Contrary to law and expectation

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Conclusion Agenda for improvement

• Short term make it work
• Correct enrollment for all low-income
• Transitional benefits penalize plans
• Standardize exceptions and appeals
• Make states whole
• Smooth transition for future duals
• Long term fix the program
• Liberalize / drop asset test for subsidy
• Protection for duals