Medicare Drug Benefit (Part D) Update

The Medicare Modernization Act, enacted on December 8, 2003, provides for a new, mostly voluntary,. Medicare outpatient drug benefit. An overview has been provided previously in this space (see www.mghsocialwork.org > staff access > community resource center > basic needs > health care coverage > Medicare. See especially “The Medicare Reform Bill” - MGH Community News, November, 2003 and “New Analysis of Medicare Part D Regulations Online” – MGH Community News, March 2005). However, some more recent clarifications and issues are noted below.

Applications for Low-Income Subsidies

The federal government began sending out millions of applications this month to Medicare beneficiaries who may qualify for extra help next year paying for prescription drugs. But the neediest and most vulnerable senior citizens may be scared away by the six-page application, because it requires details on their finances and warns that anyone who gives false information could go to prison, advocacy groups say. Under the prescription drug benefit that begins January 1, 2006, low-income Medicare beneficiaries get an additional subsidy to help them pay their deductibles, monthly premiums, and other expenses. The additional help is for those whose incomes are at 150 percent of the poverty level and below, about $1,200 a month for an individual or $1,600 a month for a couple. Officials estimate the low-income subsidy will average $2,300 per recipient.

Officials estimate that 15 million people are eligible for the subsidy, and about half will be automatically enrolled because of their participation in other government programs. But that leaves 7 million to 7.5 million people who will have to apply for the benefit. Many of them also were eligible for a $600 credit on the current Medicare Discount Card. Yet, of the 7.5 million people eligible for the credit, federal officials say, only about 1.8 million enrolled.

Dual-Eligibles

Those who have both Medicaid (MassHealth in Massachusetts) and Medicare are called “dual-eligibles”. As of January 1, 2006 the federally-funded Medicaid drug benefit for dual-eligibles will be eliminated and this group of roughly 187,000 will receive drug coverage through Medicare Part D. Those eligible for MassHealth only (i.e., not dual-eligible) will not be affected.

Dual-eligibles will be automatically enrolled in Medicare Part D. Theywill receive a letter in October 2005 notifying them of the Part D drug plan to which they have been randomly assigned. They have the option to enroll in a different plan of their own choice, but if they do not make another choice by December 31, 2005, they will automatically be enrolled in the plan selected for them effective January 1, 2006. Unlike most Medicare beneficiaries, duals may change plans at any time. They and otherlow income Medicare beneficiaries below 150% FPL (including some Prescription Advantage enrollees) will be eligible for “Low-Income Subsidies (LIS)”. They will receive a letter from CMS in mid-May 2005 letting them know that they are deemed eligible for the LIS. See attachments for the implications of LIS status to member cost-sharing.

All other, non-dual-eligible, LIS individuals (Medicare Buy-ins, SSI, those who have already applied for and are eligible for LIS) will have a “facilitated enrollment” in Medicare Part D. They’ll receive a letter in the Spring of 2006 notifying them of the Part D drug plan to which they have been randomly assigned. They have the option to enroll in a different plan of their own choice, but if they do not make another choice by May 15, 2006, they will automatically be enrolled in the plan selected for them, effective June 1, 2006. They will have a Special Election Period for the remainder of 2006 during which they may change plans at any time.

- Adapted from: “Medicare to send out drug help application some fear form will deter seniors”, By Kevin Freking, Associated Press May 25, 2005 and fFrom: “ Medicare Prescription Drug, Improvement, and Modernization Act of 2003: Title I - Part D Prescription Drug Benefit” Massachusetts Office of Medicaid MassHealth Technical Forum, April 2005

For further information, social service staff should feel free to contact Ellen Forman, Coordinator, Community Resource Center.