2009 Updates to Medicare Part D

By Carly J. Paoli, MPH13 March 2009Managed Care RotationPro Pharma

Objectives

Review Medicare as a health plan How does Part D fit in? What does(n’t) Part D cover? Who are dual eligibles? What is LIS?

Explain the Updates Predict the impact of the changes

What is Medicare?

A public health insurance program administered by the US government

Eligible participants: US citizens or permanent legal residents (≥5

continuous years in the US) 65 years or older (or those who are disabled) Who receive social security

Parts to Medicare

Part A Hospital care No additional fees

Part B Medical care Optional coverage Premium taken out of SS check

Part C Gap care (e.g Medicare

Advantage) Optional coverage Additional fees according to

the plan selected

Part D Prescription drug

coverage Optional coverage Fees vary according

to the plan

Part D

Enacted as part of the Medicare Prescription Drug, Improvement and Modernization Act (MMA) in 2003 Went into effect on 1/1/2006

Paid for by the US government but administered by private plans through subsidies

Patients ca choose either: A stand alone prescription drug plan (PDP) OR A Medicare Advantage prescription drug (MA-PD)

plan that would package their Part D benefits into their pre-existing Medicare Advantage plan (Part C)

Part D

Covers prescription medications according to each plan’s formulary Part D has some excluded drugs that no

plan will be reimbursed for Part D does not cover drugs that are

already covered by Part B Some vaccines (e.g influenza &

pneumoccocal) Home infusion drugs (e.g. morphine & anti-

biotic infusions)

Timeline

October 1, 2008 Medicare Part D prescription drug plan marketing

activities can begin November 15 to December 31, 2008:

Annual Coordinated Election Period January 1, 2009:

2009 Medicare Part D plan becomes effective January 1 to March 31, 2009

Coordinating Special Enrollment Period (or SEP) This special period is available for those people who

enrolled into a Medicare Advantage Plan with Prescription Drug coverage (MA-PDs) and now wish to disenroll back to original Medicare coverage and a Prescription Drug Plan

5%95% Catastrophic Benefit

100%

75%25%

$295 Deductible

Monthly Premium

$2,700.01 - $6,153.75

$295.01 - $2,700

$.01 - $295

Over $6,153.75

Drug Costs

Beneficiary CostsPart D Plan

Part D Standard BenefitNo Extra Help (LIS)

2006 2007 2008 2009

Deductible $250 $265 $275 $295

Initial Coverage Limit $2250 $2400 $2510 $2700

Total Covered Part D Drug Out-of-Pocket Spending including the Coverage Gap $5100 $5451 $5726 $6153 

Out-of-Pocket Threshold $3600 $3850 $4050 $4350

Catastrophic Coverage Benefit:    Generic/Preferred Multi-Source Drug $2.00 $2.15 $2.25 $2.40 Other Drugs $5.00 $5.35 $5.60 $6.00

Part D Standard Benefit Design Parameters

Dual Eligibles

Part D Full Benefit Dual Eligible Parameters: 2006 2007 2008 2009

Copayments for Institutionalized Beneficiaries $0.00 $0.00 $0.00 $0.00

Maximum Copayments for Non-Institutionalized Beneficiaries

    Up to or at 100% FPL:

        Up to Out-of-Pocket Threshold

            Generic/Preferred Multi-Source Drug $1.00 $1.00 $1.05 $1.10

            Other $3.00 $3.10 $3.10 $3.20

        Above Out-of-Pocket Threshold $0.00 $0.00 $0.00 $0.00

    Over 100% FPL:

        Up to Out-of-Pocket Threshold

            Generic/Preferred Multi-Source Drug $2.00 $2.15 $2.25 $2.40

            Other $5.00 $5.35 $5.60 $6.00

        Above Out-of-Pocket Threshold $0.00 $0.00 $0.00 $0.00

Low Income Subsidy (LIS)

Part D Non-Full Benefit Dual Eligible Full Subsidy Parameters:

2006 2007 2008 2009

Resources < $6,290 (individuals) or < $9,440 (couples)

    Maximum Copayments up to Out-of-Pocket Threshold

        Generic/Preferred Multi-Source Drug $2.00 $2.15 $2.25 $2.40

        Other $5.00 $5.35 $5.60 $6.00

    Maximum Copay above Out-of-Pocket Threshold $0.00 $0.00 $0.00 $0.00

Resources between $6,290-$10,490 (individuals) or $9,440-$20,970 (couples)

    Deductible $50 $53 $56 $60

    Coinsurance up to Out-of-Pocket Threshold 15% 15% 15% 15%

    Maximum Copayments above Out-of-Pocket Threshold

        Generic/Preferred Multi-Source Drug $2.00 $2.15 $2.25 $2.40

        Other $5.00 $5.35 $5.60 $6.00

Catastrophic BenefitCo-Pays

15% 85%

$60 Deductible

Sliding Scale Premiums

$60.01- $6,153.75

$.01 -$60

Over $6,153.75

Drug Costs

Beneficiary Costs

Part D Plan

Part D Partial Extra Help (LIS)•Lower Premiums•Lower Deductible

•Lower Coinsurance•No Doughnut Hole

will vary

Facilities with Exceptions

Patients who are covered under the VA, Indian Health Services and other state programs should not to switch to Medicare Part D It is usually best for the patient to keep

these benefits as long as he/she still qualifies b/c the coverage is typically better

It is possible to have both benefits at the same time

If that patient ever needs Medicare Part D in the future, he/she will not be penalized if signing up late

Compliance

As part of the MMA, all Part D plans are mandated to provide Medication Therapy Management (MTM) programs

MTM services do not have to be offered to all members but do have to offered to those members who have: Multiple chronic diseases Multiple covered Part D medications Likelihood of incurring annual costs

exceeding $4,000 for covered part D drugs

2009 Updates

Dual eligibles have fewer choices of plans in which premiums are fully subsidized Down from nine plans in 2008 to six in 2009

Many plans have raised their monthly premiums 80% of beneficiaries in standalone PDPs Whereas 94% of beneficiaries in gap plans will see no

change or a decrease in premiums Beneficiaries whose income or assets are just

above the limit for the LIS will likely face high out-of-pocket prescription costs in relation to their income Because they have to pay the regular fee structure

2009 Updates MIPPA (Medicare Improvements for Patients and

Providers Act) 2008 Delays implementation of AMP until 9/09 Prohibits and limits certain sales and marketing

activities by Part C & D plans Prohibits an increase in monthly premiums for LIS

beneficiaries due to late enrollment Medicare Enrollment Assistance Permits coverage of barbiturates and

benzodiazepines for treatment of epilepsy, cancer, or chronic mental health disorder as of 1/1/13

Impact

We have yet to see the impact of the increasing costs of Medicare Part D this year but as many have forecasted there may be an undue burden upon beneficiaries who do not meet LIS cut-offs

Despite increasing costs, a Harris Interactive Poll recently found that 87% of seniors were happy with their plans in 2008 Up from 75% in 2007

References

1) http://www.medicare-partd.com/PartD-The-2009-Medicare-Part-D-Outlook.php#M6CC9BD6CD06945999559DF5AF3438C35

2) www.medicare.gov3) www.medicare.com4) www.cms.gov5) http://209.85.173.132/search?

q=cache:7nyHyThfDKEJ:www.dhs.state.mn.us/main/idcplg%3FIdcService%3DGET_FILE%26RevisionSelectionMethod%3DLatestReleased%26Rendition%3DPrimary%26allowInterrupt%3D1%26dDocName%3Ddhs16_143247+medicare+part+d+2009+updates&cd=2&hl=en&ct=clnk&gl=us

6) http://www.pharmacist.com/AM/Template.cfm?Section=Issues&CONTENTID=16988&TEMPLATE=/CM/ContentDisplay.cfm

7) http://www.avalerehealth.net/wm/show.php?c=1&id=7968) http://www.piperreport.com/archives/2007/07/

pharmaceutical_pricing_new_federal_rules_on_average_manufacturer_price_and.html

9) http://www.sbsun.com/pointofview/ci_11890564

Questions?