Medicare Part D

Nari Wang

Health Law Unit

199 Water Street

New York, NY 10038

212-577-3315Center for Independence of the Disabled, NY February 23, 2010

Medicare Part D – an overview

I. What is Medicare Part D?

II. What does Part D cover?

III. How much does it co$t?

IV. How do I enroll?

V. How does Part D work with other drug coverage?

Other Parts of Medicare

Part A – covers hospital, skilled nursing facility, home health, and hospice care

Part B – covers medically necessary doctor visits, outpatient services, durable medical equipment, preventative care, lab tests, x-rays, mental health, and some home health and ambulance services

Part C – plans that offer Part A , Part B, and Part D services, also known as a Medicare Advantage plans

Part D – prescription drug plan

Other Parts of Medicare

Part A – covers hospital, skilled nursing facility, home health, and hospice care

Part B – covers medically necessary doctor visits, outpatient services, durable medical equipment, preventative care, lab tests, x-rays, mental health, and some home health and ambulance services

Part C – plans that offer Part A , Part B, and Part D services, also known as a Medicare Advantage plans

Part D – prescription drug plan

Medicare Part D – an overview

I. What is Medicare Part D?

II. What does Part D cover?

III. How much does it co$t?

IV. How do I enroll?

V. How does Part D work with other drug coverage?

I. What is Medicare Part D

Since January 1, 2006, Medicare prescription drug coverage has been available to everyone with Medicare. Known as Part D, this benefit provides outpatient prescription drug coverage.

Private companies provide the drug coverage. Beneficiaries choose the drug plan and pay a monthly premium. Like other insurance, if a beneficiary decides not to enroll in a drug plan when they are first eligible, they may pay a penalty if they choose to join later.

Medicare Advantage Plans (MA-PD)

These are health plans offered by private companies that provide Medicare Part A and B services as well as the Part D drug benefit

Also known as Part C

Stand-alone Prescription Drug Plans (PDP)

These plans only offer the Part

D drug benefit

Two Types of Coverage

Medicare Part D – an overview

I. What is Medicare Part D?

II. What does Part D cover?

III. How much does it co$t?

IV. How do I enroll?

V. How does Part D work with other drug coverage?

II. What does Part D Cover?Each drug plan has a Formulary, a list of all drugs covered by that plan. Formularies must include “all or substantially all” drugs in 6 classes of clinical concern Antidepressants Antipsychotics Anticonvulsants Antineoplastic (cancer) Immunosuppressant (for organ and tissue transplant patients) Antiretroviral (for treatment of HIV/AIDS)

*Formularies can change but notice is given prior to change.

Excluded drugs are not included in any basic Medicare Part D plan. Some examples of this are “off label” drugs, OTC drugs, prescription vitamins and minerals, and benzodiazepines

Utilization Management – A Plan’s restrictions on how certain drugs will be covered

prior authorization- where the prescribing MD must request permission from the plan

step therapy – where the plan will not cover the drug until beneficiary shows they tried alternative drugs and they didn’t work

quantity limits – where the plan will only cover a limited number of pills per month

Exceptions and Appeals – when you disagree with a plan’s decision

When a plan requires utilization management for your drug

Your doctor prescribes a medically necessary drug but its not on the plan’s formulary

Your drug is removed from the plan’s formulary mid year

Medicare Part D – an overview

I. What is Medicare Part D?

II. What does Part D cover?

III. How much does it co$t?

IV. How do I enroll?

V. How does Part D work with other drug coverage?

III. The Co$ts of Part D All PDPs have a monthly premium

In 2010, premiums range from $19.50/month to $117.50/month

Some PDPs have an annual deductible The maximum deductible in 2010 is $310

In the Initial Coverage period, beneficiaries are responsible for co-payments or coinsurance Co-payment is a fixed dollar amount for the drug and coinsurance is a percentage of the drug cost that the beneficiary pays

Full cost of drugs while in Coverage gap/ Donut Hole

Coverage Gap/Donut Hole

All plans have a coverage gap, also known as the donut hole. Once a beneficiary reaches the gap, she must pay for 100% of the drug costs until she reaches catastrophic coverage. After reaching catastrophic coverage, the beneficiary would be responsible for approximately 5% of the drug cost.

The Donut Hole – an illustration

Coverage gap

Deductible

Initial Coverage Period Catastrophic Coverage

Low Income Subsidy/ Extra Help

A federal subsidy that helps low income Medicare beneficiaries pay for costs related to Part D coverage. Extra Help reduces or eliminates Part D related costs such as the monthly premiums, annual deductible, co-payments, and the costs incurred during the coverage gap/donut mentioned earlier.

Low Income Subsidy/Extra Help

FULL Extra Help

Premium – will pay premium up to a certain amount, called a “benchmark”, in 2010 is $33.32. In 2010, there are 10 plans within the benchmark.

Deductible – no deductible! Co-payments – copays range from $0 - $6.30 No coverage gap/donut hole!

Low Income Subsidy/Extra Help

PARTIAL Extra Help

Premium – will pay 25% to 75% of plan’s premium based on an income based sliding scale

Deductible – $63 or lower Co-payments – 15% of drug cost No coverage gap/donut hole!

3 Ways of Getting Extra Help

Extra Help

Having Medicaidwhich makes you

a Dual Eligible

Having a Medicare Savings Program

(MSP)

Applying for it Through the Social

Security Administration(SSA)

Medicare Savings Program (MSP)

All three have different eligibility levels and offer various cost saving benefits for other Medicare costs, including Part A and Part B costs.

QMB – Qualified Medicare Beneficiary SLMB – Specified Low Income Medicare

Beneficiary QI-1 – Qualifying Individual Program

Medicare Part D – an overview

I. What is Medicare Part D?

II. What does Part D cover?

III. How much does it co$t?

IV. How do I enroll?

V. How does Part D work with other drug coverage?

IV. How to Enroll with Part D

Initial Enrollment Period – A 7 month period to enroll in a drug plan. Begins 3 months before and ends 3 months after the month of a) beneficiary’s 65th birthday or b) the month of getting Medicare due to disability

Annual Coordinated Election Period – November 15 – December 31, effective January 1 –you can enroll or change the drug plan

Special Enrollment Periods – many different situations can give a beneficiary a SEP. Example: having Extra Help you have a SEP that allows you to change your plan every month. Another common example is when you lose your previous drug coverage plan that was creditable

* Take care* Penalties can be placed if you enroll too late after losing creditable drug coverage

Part D Automatic Enrollment

All Dual Eligibles (Medicare and Medicaid) must join a Part D plan. A Dual Eligible will be automatically enrolled in a plan if they don’t choose a plan in time.

Those with an MSP or Extra Help will also be automatically enrolled if they don’t choose a plan in time. The plan is randomly chosen, so its best for you to choose the plan so you can make sure all your drugs are covered.

Medicare Part D – an overview

I. What is Medicare Part D?

II. What does Part D cover?

III. How much does it co$t?

IV. How do I enroll?

V. How does Part D work with other drug coverage?

V. Part D with Other Types of Drug Coverage

Medicaid (dual eligible) EPIC New York Prescription Saver Card Medigap Patient Assistance Program Veterans health care

Part D and Medicaid- Dual EligiblesMedicaid acts as the secondary payer, Part D plan will be primary except as noted below.

Will pay for Part D excluded drugs, as mentioned earlier - “off label” drugs, certain OTC drugs, prescription vitamins and minerals, and benzodiazepines were a few examples.

Medicaid will wrap around 4 classes of drugs Antidepressants Antipsychotics Immunosuppressant (for organ and tissue transplant patients) Antiretroviral (for treatment of HIV/AIDS)

Since these classes are all within the 6 classes of clinical concern mentioned earlier in a plan’s Formulary, this Medicaid wrap is not usually needed

Part D and EPIC – EPIC is NYS drug program for seniors (65+) with income under $35k for singles, $50k for couples

If a drug is covered by both Part D and EPIC, Part D is primary payer and EPIC is secondary

As of July 1, 2007, most EPIC enrollees had to join a Part D plan

EPIC covers excluded drugs, as long as its on EPIC formulary EPIC will also cover drugs not on your plan’s formulary

(EPIC Wrap) As of October 1, 2008, EPIC started encouraging use of

generic drugs for their members who have EPIC as a primary payer

EPIC Co-payment chart

<$15 $3

$15-$35 $7

$36-$55 $15

>$55 $20

Total drug cost EPIC co-pay

Part D and New York Prescription Saver Card a prescription discount card

Who can join – New York State residents are eligible if they are not already receiving Medicaid and are: Either age 50 up to 65, or persons with a disability who

have been determined disabled by the Social Security Administration; AND

Have annual household income less than $35,000 (single) or $50,000 (married).

Part D and New York Prescription Saver Card

You can’t use Part D plan card and your NYPS at the same time. When can you use it?

1. To buy drugs that are not on your plan’s formulary or are excluded from all Part D plans.

2. When you’re in your Deductible or Coverage gap - but if you want the money you spend to count towards TROOP (the running total amount you and others have paid for drugs thus far), you need to save receipts and submit them to your plan.

Questions

Contact: Health Law HelplineOpen Tuesdays212-577-3575