Medicare Part DPrescription Drug Benefit

Important Facts Consumers Needs to Know

Part 1: The Basics

2005 ushed in an era of sweeping change in public programs. Whether change is good or bad, it is imperative that we educate ourselves about the facts in order to better understand how the change will impact our daily life. Medicare Part D – The Medicare Prescription Drug Benefit is a perfect example. This article intends to answer 3 important questions:

• What is the Part D - Prescription Drug Benefit?
• How does it impact consumers with disabilities?
• What are the important deadlines you should mark on your calendars?

Medicare is the federal health insurance program for seniors (people age 65 and older) and for people with disabilities. Medicare is financed entirely by the federal government. People’s incomes are not taken into consideration in determining their eligibility for Medicare. There are approximately 40 million people enrolled in Medicare. From its creation in 1965 until passage of the MMA in 2003, Medicare did not include outpatient (pharmacy) prescription drug coverage.

Medicaid (Medi-Cal in California) is a health insurance program for low-income children, parents, seniors, and people with disabilities. Also created in 1965, Medicaid insures over 51 million Americans. Medicaid is jointly financed by states and the federal government,

and each state is responsible for administering its own Medicaid program (within rules set by the federal government). Every state’s Medicaid program includes outpatient drug coverage, although the scope of these benefits varies from state to state. Medicaid also pays for most nursing home and other “long-term care”. Consumers who receive Medi-Cal only do not appear to be affected by the Medicare Prescription Drug Benefit.

Dual Eligiblesare individuals who are covered by both Medicare and Medi-Cal. Dual eligibles will be enrolled into the Medicare Part D Prescription Plan. Medi-Cal will no longer cover dual eligibles’ prescriptions. Individuals in this category must choose a drug prescription plan under Medicare Part D. Otherwise, Medicare will assign them a drug plan to undecided consumers. There are approximately 41,298 dual eligibles in San Francisco County. 32,612 are above the age 65. Dual eligibles are greatly affected by the Medicare Part D changes.

What is the Medicare Part D - Prescription Drug Benefit?

In December of 2003 President Bush signed into law the Medicare Prescription Drug Improvement & Moderation Act. The Act is commonly called (MMA- Medicare Modernization Act). This Act was created to provide prescription coverage for Medicare consumers.

How does Medicare Part D Prescription Drug Benefit impact consumers with disabilities?

Medicare Part D- Drug Prescription Benefit startedJanuary 6, 2006; Medicare Part - D provides prescription drug coverage to Medicare consumers. First, you will be expected to choose a drug coverage plan that fits your medical needs. Several companies will offer prescription plans to Medicare consumers. You must decide upon the best prescription plan for your specific need based on the type and cost of medication necessary for your disability. These prescription plans will list types and cost of medication on a chart called a formulary. The formulary lists will fluctuate greatly. As a consumer, you should inform and educate yourself in advance on the type medication the brand and the equivalent alternative you require (i.e. generic brands).

The monthly premium will vary. Some plans may cost more. If you do not participate in the new Medicare prescription drug program, you may be charged a substantial penalty each month if you enroll late. This penalty will be permanent. Medicare enrollees will pay a $295 annual deductible in 2009. The plan is not entirely voluntary. Please be cautious when you hear the use of this term as a description of Medicare Part D.

• In general, Medicare consumers will have a monthly premium and co-pays. The premiums and co-pays will vary. The premiums and co-pays may be subsidized if you are qualified as low-income.

• After you pay the $295 deductible, Medicare will pay 75% of your medication costs and you will pay 25% until your total medication costs reach $2,700 (= 295 + 601.28). Next, you will be responsible for all of your medication cost between $2,701 to $6,153.75. This is called the “donut hole”.

• Now, once your total medication costs are above $6,153.75, 95% of your medication expenses will be covered by Medicare. You will pay $2 to $5 co-payment or 5% of your total prescription cost, whichever is more.

• Remember, only the cost of drugs covered by your plan can be credited toward your cost sharing expenses. If you purchase medication from other countries or drugs not listed in your drug plan, the cost of this medication will not be applied towards your annual share of cost.

In an effort to assist those consumers who meet specific low-income guidelines a subsidy will be provided to defray or eliminate monthly premiums. But these consumers are still expected to pay a small co-pay. This co-pay will range from $1.10 to $6. There are approximately 9 separate subsidy categories. Center for Medicare and Medicaid (CMS) Services will enroll you in the appropriate subsidy category. SSI/SSDI recipients will receive the subsidy.

The Social Security Administration (SSA) is tasked with notifying eneficiaries about the subsidy application for qualified consumers who receive SSI or SSDI. There are 3 ways to file your subsidy application. You may contact Social Security and complete a paper application at the field office, file an application electronically at www.socialsecurity.gov. or call 1 800-772 -1213.

*Information in this article was cited from California Health Advocates, Center for Healthcare Rights and Families USA.

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Part 2: Dual Eligible People

(People who have both Medical and Medicare)

Who are low income dual eligible people?

• Full Benefit Dual Eligible people are people who receive the full range of Medical and Medicare benefits. They include individuals enrolled in the Medical working disabled program, home and community-based waivers, and medically needy categories.

• Partial Benefit Dual Eligible people are enrolled in one of 3 Medicare Savings Programs that help pay premiums and costs of Medicare.

• Qualified Medicare Beneficiaries (QMB’s): all Medicare premiums and costs are covered.
• Specified Low-Income Medicare Beneficiaries (SLMB’s): Medicare Part B monthly premiums are covered.
• Qualifying Individuals 1 (QT1’s): within federal funding limits Medicare Part B monthly premiums are covered.

Income and assets vary.

What Benefits do Dual Eligible People receive?

• Full Benefit Dual Eligible:

no premiums

no annual deductible

$1.10 (generic) or $3.20 (brand name) co-pays

no co-pays after total drug costs reach $6,153.75

Co-pays will increase with the consumer price index.

If your income is over 100% of Federal Poverty Rate ($10,830 in 2009), you par $2.40-$6 co-pays.

• Partial Dual Eligible:

With income less than $14,620.50 (135% Federal Poverty Level in 2009) and assets under $6,290 for an individual :

no monthly premium

no annual deductible

$2.40-$6 co-pays up to total drug costs of $6,153.75

• Others eligible for subsidy:

With income between $14,620.50-$16,245 (135%-150% Federal Poverty Level) and assets under $10,490 for an individual:

Sliding scale monthly premium $60 annual deductible

15% of total costs to $6,153.75; then, $2.40-$6 co- pays

Challenges Facing Dual Eligible People

• Make sure you are in the correct subsidy group.
• Know the “formulary” (covered prescriptions) for different plans.

Medicare Part D may not cover the prescriptions you take currently.

• If you select a Medicare drug plan with a premium above the state average, you must pay the difference in premiums and full co-payments to receive better coverage.
• Check with ILRCSF or HICAP (546-1305) to make sure you are aware of all assistance available to you for prescriptions you need and for co-pays.

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If you receive Medical only, these changes do not affect you.

Part 3: Planning Tool

Take Control of your Drug Transition Planning

Fill out this simple worksheet.

Take it with you when you meet with a benefits counselor or planner.

This information can help you and the person you work with understand your options under the new Medicare drug plans.

Worksheet

• My Health Coverage. Find out and write down all the health coverage programs you use now.

I am enrolled in: (check all that apply)

___ Medicare Part A (hospitalization)

___ Medicare Part B (medical coverage)

___ MediGap private insurance.

Circle your plan:

A B C D E F G H I J

Medicare Advantage HMO.

Which HMO?________________________

Medicare Savings Program

I am enrolled in: (circle one):

QMB SLMB QI-1 QDWI

Medi-Cal

Do you have a share of cost with Medi-Cal? $ _________/month

Employer-sponsored health coverage, including retiree coverage.

Employer: ___________________________________

Plan provider: ________________________________

I am enrolled in a drug plan or program that pays for my drugs now.

What plan or plans?

__________________________________________

My co-pay for drugs is: $ _______________________

I pay a monthly premium of $ ___________________

Other health coverage/insurance:

_________________________________________

_________________________________________

_________________________________________

_________________________________________

My Income and Assets (optional). If you’re enrolled in Medi-Cal, skip this section.

Financial help with Medicare drug costs is available for some people. Others may qualify for Medi-Cal or other programs. You may choose to share financial information to help the people you work with figure out if you might be eligible.

Income: include all sources of earned and unearned income, including work, Social Security, disability benefits, pension, etc.

My Income

Income Source and Monthly $________________

• _____________________________________
• _____________________________________
• _____________________________________
• _____________________________________

Assets; include cash, savings and retirement accounts, etc. Leave out the home you live in and the car you drive.

My Assets

Asset and Value ($)

• _______________________________________
• _______________________________________
• _______________________________________
• _______________________________________

• My Medicines. Find out and write down the names of all the prescription drugs you take now. Each Medicare Prescription Drug Plan has a list of drugs it covers, often called a formulary. Having a list of the drugs you need makes it easier to figure out which plans might suit your needs. Any information you can provide will be helpful. The first line is just an example. Attach an extra sheet if necessary.

Generic Name Atorvastatin

Dosage Amount 80 mg

How Often Taken Daily

Cost Per Prescription $102

Your Cost per prescription $3

How Often refilled Monthly

Doctor’s substitute Drug? Lovastatin

• Brand name _________________________

Dosage Amount___________________________

How Often Taken __________________________

Cost Per Prescription ______________________

Your Cost per prescription __________________

How Often refilled _________________________

Doctor’s substitute Drug? __________________

* Thank you to World Institute on Disability/ Disability Benefits 101 for this worksheet.

Call ILRCSF or contact our Information Manager at 543-6222 or info@ilrcsf.org with your questions or requests for assistance. He will direct you to the right person.

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