Medicare Part D:

What your patients need to know

On January 1, 2006 the Medicare prescription drug benefit, or Medicare Part D, begins. Here’s what your patients need to know now.

Dual Eligibles

“Dual Eligibles” are those who have both Medicare (part A and/or B) and MassHealth. They will:

• lose their MassHealth drug coverage as of January 1, 2006, except for benzodiazepines, barbiturates and certain over-the-counter drugs not covered by Medicare Part D.
• have until January 1, 2006 to select a Medicare prescription drug plan or they will be randomly assigned to one.
• Those with regular fee-for-service Medicare can choose any plan offered in the area, but if they choose one with a premium above the benchmark they will need to pay the difference. This group has the right to change plans as often as monthly- with coverage for the new plan beginning the first day of the following month.
• Those enrolled in a “Medicare Advantage” plan (a Medicare HMO) will be enrolled in the plan offered by that organization.

Currently, dual eligibles have drug coverage under MassHealth, and by law, providers are not allowed to refuse to dispense their medications if they are unable to pay their copays. The same is not true for Part D, so as of January 1 st, when a dual eligible goes to a pharmacy, he or she must have his/her copay to receive medications.

Medicare members who are enrolled in Medicare Savings Plans (QMB, SLMB, QI) who have not enrolled in Part D plan by May 15, 2006 will also be automatically enrolled in a plan to begin June 1, 2006.

Beneficiary Options

Medicare part D choices open to members are:

• Private Prescription Drug Plan (PDP)
• Medicare Advantage Plan with prescription drug coverage (MA-PD). Each MAP (HMO) must offer a prescription drug benefit as an option in a plan in each of its service areas
• Medigap plan with prescription drug coverage if already enrolled. Note that these plans cannot enroll new members after 1/1/06.
• Retiree benefit (employer subsidy available)
• Don’t participate (see note below about penalties for late enrollment)

Initial Enrollment Period

• Nov 15, 2005, to May 15, 2006, for people who are currently eligible or will become eligible in November or December 2005, or January 2006
• For everyone else, the Initial Enrollment Period is similar to the Initial Enrollment Period for Part B, i.e., a 7-month enrollment period that includes
  • 3 months before eligibility
  • The month of eligibility and
  • 3 months after eligibility

Higher Premiums for Postponed Enrollment

• Higher premiums will be levied for people who wait to enroll unless they have prescription drug coverage at least as good as a Medicare prescription drug plan.
• Assessed 1% of base premium for every month that one was eligible to enroll in a Medicare prescription drug plan, but not enrolled, unless had drug coverage as good as a Medicare prescription drug coverage without a lapse of 63 consecutive days or longer.

Low-Income Subsidy

Medicare will provide extra assistance with premium and cost sharing amounts under the new drug benefit for low-income people. Applying for the Low-Income Subsidy (LIS) is a separate process than joining a plan.

These folks will automatically get the LIS, and will NOT have to apply for it:

• Full-benefit dual eligibles,
• SSI recipients,
• Medicare Savings Program enrollees (QMB, SLMB and QI enrollees) – Note: this group will not be automatically enrolled until May, so to get most benefit from program should enroll earlier.

Others who may be eligible for LIS need to apply for it. Eligibility criteria include income at or below 150%, and asset limits (see “Low Income Subsidy Groups and Costs” handout).

Formularies

This is one area that members should research before choosing a program. Once in a plan though, members do have appeal rights. Beneficiaries can request an exception for a drug not included in the formulary or the cost-sharing tier in which drug is placed.

Also all formularies must meet a “Nondiscriminatory” criteria. A plan can’t exclude a class of drugs commonly used for HIV for example.

Actuarial Equivalence

We have reported in this space what the standard benefits will be, including premiums, deductibles, and coinsurance levels (see accompanying handout as well). Plans have the option though to use an alternative benefit table as long as it is actuarially equivalent to the standard benefit . So plans may differ in premiums, deductibles, coinsurance and catastrophic limits, but these must be expected to “even out” to be essentially the same.

Prescription Advantage (PA) & Medicare Part D

The Massachusetts FY ‘06 budget includes funding for a cost sharing wrap for PA members enrolled in Part D. For the 3,000 PA members without Medicare, the current PA benefit will continue after January 1, 2006.

For Medicare beneficiaries after January 1, 2006 PA will:

• require all Medicare members to enroll in a Part D Plan (and are currently seeking CMS authorization to auto-enroll members in Part D)
• become a secondary payor to Medicare Part D
• require Medicare low-income members to apply for Low-Income Subsidy

The details of this cost-sharing wrap still being designed. It will likely be done through individual claims rather than by lump-sum payments to PDPs. Prescription Advantage will provide enrollment assistance to members, including analysis of their drug utilization to determine which Part D plans will be appropriate for them.

Those eligible for the Medicare D LIS should apply. They should end up paying less using the Medicare D LIS than they would under PA

Important dates

Some dual eligibles may have already received a mailing giving them notice of the upcoming changes.

September, 2005 - CMS approves Part D plans

October, 2005 –

• Part D plans begin marketing
• Info on Part D plans on www.medicare.gov
• Dual Eligibles auto-enrolled into a plan

Nov. 15, 2005 - Initial Enrollment Period begins

December 2005 - Mailing- information about wrap details, Pick a Plan, list of resources

January 1, 2006- Earliest effective date for Part D plan

May, 2006 -Facilitated enrollment for MSP members who have not joined a plan

May 15, 2006 -Initial enrollment period ends

-Adapted from presentation “The Impact Of The Medicare Prescription Drug Benefit On State Programs” By Molly Maginnis, Executive Office of Elder Affiars, SHINE Training and Outreach Coordianator;. “Medicare Prescription Drug Coverage” presentation to MGH and BWH staff by Tom Devins, Associate Regional Administrator, Medicare Operations, CMS Region I (New England); MassHealth Eligibility Letter 136, July 1, 2005, and e-mail from Kim Simonian, MassHealth Defense group meeting notes.

07/2005