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Medicare
Part D
Prescription Drug Benefit
Who is
eligible? Individuals
who are enrolled in Medicare Part A and/or Part B, and live in the
service area of a Medicare Part D prescription drug plan, may enroll.
What are the
Medicare Part D prescription drug plans? The new Medicare retirees
before examining Medicare Part D plans need to consider whether their
current drug coverage is creditable coverage -- as good as or better
than Medicare’s coverage. If the advice letter from your current
prescription drug plan states that it is creditable coverage, the
individual may remain in the plan and will not receive a penalty if
he/she later enrolls in Medicare prescription drug insurance. This penalty will be 1% of the
national monthly average benchmark for the year you join ($27.35 in
2007). This holds for every
month of delay after enrollment eligibility (after a period of 63 days
or more without creditable drug coverage). The penalty amounts to $1.91 per
month- $27.35 x 1% =.2725 x 7 months (penalty period 5/16/06-12/31/06)
= $1.91
If the reply regarding creditability
is negative, look for information as to whether your plans (i.e. your
own or spouse’s employment or retiree health pan) will work as
supplemental to Medicare Part D.
If you are a current Medicare Part
D-enrolled person, look for your Plan’s Annual Notice of Change
for changes in 2008 in premiums, drug tiers, drug lists (formularies)
etc. The letter is expected by
October 31, 2007. By October 2,
people whose 2007 plan terminates in 2008 should receive notices from
those plans. You will have the
opportunity to switch plans (described below in Enrollment Procedure).
Medicare prescription drug insurance
is basically a choice of two types of plans.
There is a stand-alone plan (PDP) that
covers only drugs to add to your Medicare Part A and/or Part B
insurance (a small percentage of card holders have only Part A or Part
B). The traditional Medicare
Part A and B care holder will also probably have a coordinated Medicare
supplement policy.
Alternatively, the Medicare
beneficiary may enroll in a Medicare Advantage (MA) plan, such as an
HMO or PPO. He/she must have
Part A and Part B to enroll. The
HMO or PPO includes medical coverage and often offers prescription drug
coverage. Combining coverage for
doctors and hospital care with a prescription drug plan results in an
MA-PD (second of 2 plans).
People enrolled in an MA plan that offers a prescription drug
plan must enroll in it. If you
are a member of an MA that does not offer prescription drug coverage,
you may still have recourse. You
have creditable coverage to substitute for Medicare Part D, to avoid
future penalty, if you are a member of a State Pharmaceutical
Assistance Program (SPAP) such as EPIC in New York State.
Even though NYS Law as of July 1,
2007, requires Epic members to be enrolled in Medicare Part D
prescription drug plans, the above described MA member may be an
exception. One of the limited
exceptions is enrollees in a Medicare Advantage plan without
prescription drug coverage, who would receive reduced medical benefits
by enrolling in an MA with prescription drug coverage. So check out your SPAP.
Every Medicare beneficiary must have
access to at least two different Part D plans, one of which must be a
PDP.
What is the
premium? “CMS
anticipates that the actual average premium paid by beneficiaries for
standard Part D coverage will be roughly $25 in 2008. This is lower than previous
projections but higher than the $22 national average premium for
2007.” In New York State,
as of October 2007, for instance, 23 organizations are offering 55
stand alone PDP plans for 2008 -- 4 less than $20.00, 14 between $20.00
and $25.00, 15 between $25 and $35 and 22 between $35 and $108. These plans may also offer coverage
that goes beyond the standard Medicare benefit (for example, through a
smaller deductible or with additional coverage).
What is the
Enrollment Procedure? If you
currently have Medicare or will be eligible for Medicare in January
2008, the Annual Coordinated Election Period (ACEP) for Part D will be
between November 15, 2007 and December 31, 2007.
During the Open Enrollment Period
(OEP) between January 1, 2008 and March 31, 2008 Medicare beneficiaries
who have already enrolled in a plan have
one more opportunity to switch to a different plan –- to
an MA-PD, if it is open for enrollment.
They cannot add or drop prescription drug coverage, or transfer
from one PDP to another, as explained below:
Beneficiaries in an MA-PD can switch to another MA-PD or
traditional Medicare and a PDP, but cannot switch to an MA only plan.
Beneficiaries in an MA only plan can choose another MA plan but
cannot switch to an MA-PD plan.
They can enroll in original Medicare but cannot enroll in a PDP.
Beneficiaries in traditional Medicare and a PDP cannot switch to
a different PDP or to an MA plan, but they can enroll in an MA-PD.
You will then be locked in until the
next year’s ACEP of 11/15/08 to 12/31/08. Therefore, you may want to avail
yourself of the above open enrollment switching opportunity.
Standard Medicare Part D Prescription Drug
Benefit: 2008
Coverage Cost
First $275 (rx) Deductible Beneficiary pays $275
$276-$2510 (rx) ($2235) 25% Co-pay Beneficiary pays $558.75
$2511-$5726.25 (rx) ($3216.25) Deductible Beneficiary pays $3216.25
The coverage gap ends when your total
out-of-pocket costs for covered drugs reach $4050. After you reach this catastrophic
coverage limit, you will pay either $2.25 for generic drugs and $5.60
for brand-name drugs, or 5% of the prescription cost, whichever is
greater.
The Medicare Prescription Drug
Improvement and Modernization Act of 2003 (MMA) established the basic
benefit as indicated above.
However, a plan may offer a different benefit that is equal or
actuarially equivalent to this basic coverage. Individual plans may vary. Many plans will cost less or provide
more generous coverage than the standard benefit. They will charge different
deductibles and some plans will eliminate the deductible. Beneficiaries can be required to make
co-payments for prescriptions instead of paying a percentage of the
cost; and drugs may be assigned to specific price tiers in which
different drugs have different co-pays.
Plans also choose the drugs to
include on the “formulary” list for which they make
payment, but they are required to cover at least two drugs in each
major medication category. Also,
they must give 60 day’ notice to affected parties before taking
the prescription drug off the list.
But on April 26, 2006 (New York
Times 4/27/06), “The Bush Administration issued a new policy on
Wednesday that protects Medicare beneficiaries against the sudden loss
of coverage for drugs they are taking under the prescription drug
program. Under the policy
insurers can still change their lists of covered drugs, known as
formularies. But if they drop
any drugs or impose new restrictions, they must exempt beneficiaries
who are now taking those drugs.”
Only payment for formulary drugs
count towards the yearly (2008) $4050 out-of-pocket limit. They may be paid for by the
beneficiary, a family member or other person acting on her behalf, or
by a state pharmacy assistance program.
Medicare’ payments for Part D’s Low Income Subsidy
will also count towards the out-of-pocket limit.
Medicare Part D Low-Income Subsidies
Extra
Help in Paying for Prescription Drugs in 2008
Individuals who were entitled to the
Medicare Savings Program (MSP) and Medicare/Full Medicaid were deemed
eligible for extra help in paying for prescription drugs. Their original entitlement was made
by the state Medicaid agency.
Therefore, that agency will be responsible for redeeming eligibility
for the group in 2008. Each
state will send to CMS in July 2007 a file of persons deemed eligible
for extra help. Additionally,
the above group also includes those who receive SSI but are not
eligible for Medicaid, and CMS will rely on SSA files for those
individuals.
The Centers for Medicare and Medicaid
searched state files submitted in July 2007 to ascertain whether above
entitled individuals have not retained their eligibility. CMS sent (Gray) letters to these
beneficiaries in September 2007 advising them that they will not continue
to receive their prescription drug assistance in 2008. If you believe that you still
qualify, contact your State Medicaid office.
No notification will be sent to the
redeemed, but separate letters will follow if the person’s plan
either leaves the Medicare program (Blue October Letter), no longer is
at or below the low-income regional benchmark (Blue October Letter) or
income has changed, affecting co-payments (Orange October Letter). Medicare will also advise recipients
of the Blue Letters (their plans leaving Medicare) that Medicare will
reassign the individual to a new plan effective January 1, 2008, unless
they join a new plan on their own by December 31, 2007. Medicare will do the same
reassignment for holders of plans that are no longer at or below the
low-income regional benchmark, but only if Medicare enrolled them into
the plan in 2007. The above
letters will also be sent to the SSA redeemed applicants.
CMS will continue to review submitted
files each month from August to December 2007. Individuals who appear eligible for
the first time will be deemed eligible for prescription drug help in
2008. CMS will send notices on a
monthly basis to those beneficiaries to let them know that they will
get extra help without needing to apply.
CMS mails monthly deemed (Purple
Letter) notices to the following people who will automatically get
extra help: persons with Medicare and Medicaid, in Medicare Savings
Program and who receive SSI benefits.
Persons in the above (Purple Letter)
group, who are with Original Medicare Plan, will also receive from CMS
facilitated (Green Letter) enrollment notices explaining that Medicare
will enroll them in a drug plan if they don’t enroll themselves
or decline coverage.
CMS will also mail monthly
auto-enrollment (Yellow Letter) notices to Medicare beneficiaries who
qualify for full Medicaid, are covered through Original Medicare and
have not enrolled in a Medicare drug plan. This notice explains that Medicare
will enroll them in a drug plan if they don’t enroll themselves
or decline coverage.
Other low-income beneficiaries
received their eligibility through the Social Security Administration
(SSA); and SSA conducted in August 2007 a new cyclical redeeming of a
portion of the beneficiaries, who became eligible for extra help from
May 2006 to April 2007. The
sample of people received a form (SSA 1026), based on standards used
for examining new applicants.
The completed Income and Resources Summary must be returned in
30 days, but beneficiaries may call SSA for an extension. Beneficiaries who received and did
not respond to the letter will lose Extra Help in 2008.
Also, in August SSA chose from the
above 5/06-4/07 group select cases where there are signs of a
disqualification. They received
the form “Social Security Administration Review of Your Eligibility
for Extra Help,” which must be completed and returned within 30
days.
CMS/SSA sent (Gray) letters to
rejected beneficiaries in September 2007 advising them that they will
not continue to receive their prescription drug assistance.
Successful applicants for extra help
through SSA will be notified by CMS.
Additionally, those with the Original Medicare Plan will receive
from CMS facilitated (Green Letter) enrollment notices, explaining that
Medicare will enroll them in a drug plan if they don’t enroll themselves
or decline coverage.
As a result of the redeeming
procedure, some beneficiaries may lose their prescription drug
assistance. You may have a basis
for an appeal. Also, if you have
lost full Medicaid, you may be eligible for the Medicare Savings
Program (QMB, SLMB QI) – thus retaining your prescription drug
assistance. This will be at a
slightly lower level, but you will be acquiring an additional benefit
– no payment of the Medicare Part B premium. And if you were declared ineligible
by the Social Security Administration because your assets were
excessive, your state may have a Medicare Savings Program with no asset
requirements.
The extra help will consists of, in
the main, full (no gaps) Medicare prescription drug coverage with very
small co-payments, no deductibles or insurance premiums. All low-income individuals (except
those who are 135-150%above poverty) receive a premium subsidy equal to
the benchmark (weighted average of all prescription drug plans in the
region (2008 NY $24.18). Those,
who enroll in a plan higher than the benchmark, are required to pay the
difference.
On the Other hand, plans to which
beneficiaries were automatically assigned in 2007 may no longer qualify
as benchmark plans, if the 2008 premiums were raised to more than $1
($2 in 2007) above the regional benchmark. Medicare will reassign them to a new
plan effective January 1, 2008, unless they join a new plan on their
own, or remain in the 2007 plan and pay the difference in premium.
Medicare/full Medicaid, MSP, SSI and
SSA eligible persons will be able to change their Part D plans at any
time.
You can request Part D low-income
subsidy applications from SSA at 1-800-772-1213 or contact your State
Social Services Department for information regarding Medicaid and MSP
benefits and eligibility. I
refer New York State residents to Medicaid
segments 03 and 04
for Medicaid and Medicare Savings Program enrollment and benefit
information.
Medicare Part D Help for Following Groups
Of Low Income Beneficiaries
2008
Income and Resources Eligible Levels
(The 2008 financial guidelines will be
effective
January 23, 2008 for the rest of the year and
for
the early months of 2009)
Group 1 Group 2 Group 3 Group 4 Group 5
Full Medicaid Medicare Social Security approved
applicants
(3) Savings (4)
Program
Income Single $725 $726-$1170 $867-$1170 $867-$1170 $1170-$1300
Per Month Married $1067 $1068-$1575 $1167-$1575 $1167-$1575 $1575-$1750
(1) New York State Residents
Resources Single $4350 $4000 $6290 $6290-$10490 $10490
Married $6400 $6000 $9440 $9440-$20970 $20970
(1) New York State Residents
Drug Full (no gap) Full (no gap) Full (no gap) Full (no gap) Full (no
Coverage
gap)
Monthly $0 $0 $0 $0 Reduced
Premium
based on
income
Annual $0 $0 $0 $56 $56
Deductible
Co-payment $1.05generic
$2.25/generic
$2.25/generic 15%
co-ins 15% co-ins
$3.10/brand $5.60/brand $5.60/brand note (2)
(0 in nursing
home)
No co-pays $0 $0 $0 $2.25 $2.25/gener
after $5726
$5.60
$5.60/brand
total costs
Note (1) Refer to Medicaid segment 03
of this web site for details regarding 2008 income and resources
eligibility for full Medicaid and Medicare Savings Programs QMB, SLMB
and QI-1 in New York State. One
program has no asset limits and applicants for the other two programs
can attest to their assets.
Note (2) Co-insurance will be paid
until the beneficiary’s total costs amount to $5726.25.
Note (3) New York State SSI
recipients automatically receive full Medicaid; therefore they are
included in Group 1. In some
states, SSI recipients do not have full Medicaid so they would be
included in Group 2.
Note (4) Adjustments to resources and
income for Social Security applicants:
(a) Burial account of $1500 for
single and 2x$1500 for couple may be allowed in addition to the above resources
levels.
(b) $20 unearned income exemption per
individual or couple.
© $65 earned income exemption for
individual or couple.
(d) ½ of remaining earned income of
individual or couple is exempt.
(e)Multiply $3600 for each additional
dependent family member (applicant or spouse provide at least 50% of
support) by applicable percentage of poverty (135% or 150%), divide the
result by12 and add the amount to calculate the new income level for
the larger family unit.
How Do You Choose One Part D Prescription Drug Plan over
Another?
You need to look at this question, as if you are new to the
prescription drug program. Your
2007 plan may have made changes to their benefits package for
2008. And the competition
“picture” has probably also changed. On October 1, plans began sending
marketing materials for 2008 – start immediately – you may
need “all of the available time” to sort out the many
plans.
First and foremost, important in
choosing any health insurance coverage is access to the appropriate
service or product that fits each individual’s needs. And in the case of Medicare Part D,
it means examining formularies of the available plans for specific
drugs in strengths, dosages and price, and whether the beneficiary’s
customary pharmacies are included in the favorable pricing. Also, it is important to note
quantity limits – on number of prescriptions in a month and
number of pills in a prescription.
But most importantly, in the case of Medicare Advantage-PD
Plans, do not allow the “tail” (prescription drug coverage)
“wag the dog” (hospital and medical care).
There is another important factor
– making certain the access to health care (in this case,
prescription drugs) is as stress-free and pressure-free as
possible. It is a theme that
runs through my web site and plays a large part in my counseling. This factor comes to the forefront in
regard to Medicare Part D because beneficiaries may not automatically
get all the drugs their doctors prescribe. In that regard, we need to carefully
examine management tools used by an otherwise favorable-appearing plan.
It is possible that any one of the
following management tools can affect negatively your ready access to
prescription as well as raising your “anxiety level.”
1.
Your doctor is required to get prior authorization for obtaining
certain medications.
2.
Step therapy – requirement that the beneficiary try a
particular medication before the one prescribed by the doctor.
3.
Formulation substitution includes switching from a costly to a
less expensive therapeutically (bio) equivalent drug – usually
from a brand name to a generic drug.
This is acceptable practice because the drug products have
identical ingredients and are expected to have the same clinical effect
and safety profile. However,
there are some exceptions where the substitutions can cause side
effects.
There is an additional consideration
for choosing one Part D plan over another – the transition
process in place for temporarily providing drugs that are not covered
by the plan. A key question to be
answered is “How long is temporary?”
All of the above factors need to be
checked out carefully for they will be the basis for your choice of a
plan. The “Plan
Finder” on medicare.gov is designed to make a comparative cost
analysis of specific types of plans, as well as indicating which drugs
are covered (and not covered) by the plans. If you are not computer literate,
call 1-800-Medicare (1-800-633-4227), submit the current drugs you use
(with strength and dosage) and request such an analysis; or reach out
to friends, relatives and neighbors for internet help. You will probably not get all the
answers on the site regarding all of the above management tools that
could be used by the plans. So
“inspect” the plans’ printed material for the
answers, and if you can’t find them, follow up directly with the
plan.
There are Exceptions and Appeals procedures if your drug is not covered by your
prescription drug plan:
a.
Enrollees can use an Exceptions process to persuade the plan to
cover a particular non-formulary drug as medically necessary, and the
doctor needs to show at minimum that no other drugs offered by the plan
will be as effective. The
statement by the physician will be the “key” to the
non-formulary drug Exception.
Therefore, the doctor and the beneficiary must make certain that
the statement submitted by the doctor is in accordance with the
plan’s requirements. Since
each drug plan may develop its own procedure and evidence requirements
for an Exception request, the doctor will need the time to navigate
multiple plans with different requirements. The plan must give your doctor the
decision (Coverage Determination) within 72 hours after the patient and
doctor asks the plan for an exception.
The doctor may request an “Expedited Coverage Determination”
if the patient needs the drug within 24 hours. It is important to note that the time
under which the Part D Plan must provide a decision is calculated from
receipt of a statement by the doctor.
The Exceptions process will also be used in the above Items 2
and 3 situations.
b.
Appeals procedure-If you and your doctor disagree with the
“Coverage Determination” response to your request for an
exception, or if the plan has not given approval to the doctor’s
request for Prior Authorization, you can appeal.
*The appeal may be a
multi-stage process starting with asking the plan for a
“Redetermination” within 60 days of getting the Coverage
Determination in above item a.
You and your doctor will give the plan more information, and an
expert in the plan who was not involved in the first coverage
determination reviews your case.
The plan usually has seven days to make another decision, but
you can ask for a faster one.
The plan must act on a requested Expedited Redetermination
within 72 hours. A written
request to appeal must include the following: Your name, address, the
health insurance claim (HIC) number shown on your Medicare card, the
name of the prescription you want your plan to cover, reason why you
are appealing, any supporting documentation that you believe may help
your case, and your signature or your signature of your appointed
representative.
*If the plan decides against
you, ask for “Reconsideration,” which will be done by an
Independent Review Entity (IRE).
The plan should have sent you a “Request for
Reconsideration” form. If
you don’t get this form, call your plan and ask for it. You or your appointed representative
must make a standard or expedited request in writing within sixty
calendar days from the date of the plan’s redetermination
decision. A Reconsideration
decision will be rendered within 7 days and a requested Expedited
Reconsideration within 72 hours.
*If the plan decides against
you on the Reconsideration, and you still disagree, you may be able to
appeal to an Administrative Law Judge and then the Medicare Appeals
Council. To get an ALJ hearing,
the projected value of your denied coverage must meet a minimum dollar
amount (you may combine claims to meet the minimum dollar amount). The IRE’s decision will include
this amount. You must make the
request for an AJL hearing in writing within 60 calendar days from the
date of the IRE’s decision letter. You must send your request to the
location listed in the IRE’s decision letter.
*If you disagree with the
ALJ’s decision, you can request a review by the Medicare Appeals
Council (MAC). You must make the
request to the MAC in writing within 60 calendar days from the date of
the ALJ’s decision letter.
You must send your request to the location listed in the
ALJ’s decision letter.
*If you disagree with the
MAC’s decision, you or your representative can request a review
by a Federal court. You must
make the request, in writing, within 60 calendar days from the date of
the MAC’s decision notice.
You must send your request to the location specified in the
MAC’s decision notice. To
receive a review by a Federal court, the projected value of your denied
coverage must meet a minimum dollar amount. The MAC’s decision will include
the amount.
*Description of the above
appeals procedure is based on “How to
Request an Exception and to File an
Appeal” issued by the Health Assistant Partnership in September
2005 and CMS Publication NO. 11112-“Medicare Prescription Drug
Coverage: How to File a Grievance, Request a Coverage Determination, or
File an Appeal” Revised July 2007.
A final note --- no matter who asks
for an exception, the doctor who prescribed the medicine will have a
major part in the exception procedure and appeals procedure, as well as
the prior authorization procedure – time consuming, for sure.
Continue to the next segment for more information about the
Medicare Part D Prescription Drug Benefit
Updated:
January 11, 2008
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