Medicare Part D Drastic Threats to Rx for Low Income Elderly and Disabled Pathways to Justice Conference San Francisco June 2005 Jeanne Finberg National

Medicare Part D

Drastic Threats to Rx for Low Income Elderly and Disabled

Pathways to Justice ConferenceSan Francisco June 2005

Jeanne FinbergNational Senior Citizens Law Center

Medicare Prescription Drug, Improvement and

Modernization Act of 2003 (MMA)

Biggest Change in Government Health Care Programs in 40 years

NSCLC copyright 20053


Medicaid coverage ends on January 1, 2006 for virtually all prescription drugs for elderly and disabled

Medicare Part D replaces Medi-Cal for all dual eligibles

NO EXCEPTIONS

NO EXTENSIONS


Who is affected?

• 43 Million Medicare beneficiaries Nationally

• 6.8 Million Dual Eligibles

• More than 1 million in CA– 937,000 Fee for Service– 137,000 Managed Care


Who is Eligible

• All Medicare Beneficiaries Nation-wide

• Elderly and Disabled people

• Entitled to Part A and/or Enrolled in Part B

• Any Income level

• Any resource level


Dual Eligibles: a vulnerable group

• Duals are more than twice as likely to be in fair or poor condition as other Medicare beneficiaries

• More than 50% are limited in activities of daily living

• Almost 4 in 10 have mental or cognitive impairments


• Need multiple prescriptions

• Nearly 25% are in LTC

• Are likely to need assistance

Duals: a vulnerable population


Auto enrollment of Duals

• Part D Health Plan• Low Income Subsidy• Numerous barriers

– Confusion– Random assignment– Obtaining Information– Restrictions on Drugs– Lack of Continuity– Gaps in coverage


Key Dates

• July 1, 2005 Subsidy applications

• October 2005 Part D Plans known Dual eligibles auto-

enrolled

• November 15, 2005 Part D Enrollment

• January 1, 2006 Part D benefit begins

• January 1, 2006 Medi-Cal drug coverage ends


Part D Plans -- PDPs

• CA State-wide region

• CMS will initially approve formularies– Must be choice of at least 2 drugs within

certain categories– Change with 60 day notice

• PDP will make the determination of what is medically necessary


MULTIPLE AGENCIES

• Centers for Medicare and Medicaid Services (CMS)– Medicare Part D

• Social Security Administration (SSA)– LIS application, processing

• State of CA (DHS)– IDs duals– Enroll in LIS -- reluctantly


Key Differences between Medicare Part D and Medi-Cal

• Medicare Part D plans will be private plans• Plans will likely be more restrictive –

– Plans have greater flexibility in designing and changing formularies

– Utilization tools – prior authorization, limits– May have tiers – preferred drugs– Network Pharmacies

• Duals will have co-payments for each prescription (probably of $1 to $3) which cannot automatically be waived

• May need to pay a premium for any plan above the “benchmark” plan


Medicare Part D Generally

• Costs: premiums, deductibles, cost sharing thresholds will increase annually

• Plans may vary considerably – alter amts, etc, so long as basic benefit same or better


Example of Standard Prescription Drug Coverage

• $37 monthly premium

• $250 deductible

• Coinsurance of 25% of drug costs from $250 to $2,250 – Medicare pays 75%

• 100% of drug costs from $2,250 to $5,100

• After $3,600 in out-of-pocket costs, Medicare pays approximately 95%

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Medicare Standard Drug Benefit 2006

Coverage Annual Drug Costs:

Part D Plan Pays:

Beneficiary Pays:

Premiums none About $37/mo

Deductible $0 - $250 $0 $250

Initial Limit to Coverage

$251 - $2,250 75% ($1,500) 25% ($500)

Coverage Gap (Donut Hole)

$2,251 - $5,100 $0 100% ($2,850)

Coverage Resumes

Over $5,100 95% of remaining costs

Up to 5% of remaining costs


Part D Enrollment period

• This year: 11/15/05 to 5/15/06

• Future years: 11/15 to 12/31

• Lock in for year for most beneficiaries

• Duals may change every month

• Others: very limited opportunity to disenroll– Move out of service area– LTC enter, leave or reside in– Loss of creditable coverage


Voluntary?

• Dual Eligibles – Lose Medi-CalNo other coverage

• Others may enroll or not, but penalty for postponed enrollment unless creditable coverage

• 1% of base premium for each month delay


AUTO ENROLLMENT

• Duals auto-enrolled into PDP or MA-PDP in October 2005, effective 1/1/06

• May change plans prior to 1/1/06

• May change each month

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LOW INCOME SUBSIDY

• Group 1– Full-benefit dual eligibles with incomes at or below

100% Federal poverty level (FPL)

• Group 2– Full-benefit dual eligibles above 100% of FPL; QMB,

SLMB, QI, SSI-only, or non-dual eligible beneficiaries with incomes below 135% FPL and limited resources ($6,000 per individual and $9,000 married couple)

• Group 3– Beneficiaries with incomes below 150% FPL and

limited resources ($10,000 individual and $20,000 married couple)

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LOW INCOME SUBSIDY

Group 1 Group 2 Group 3

Premium $37/month

$0 $0 Sliding scale based on income

Deductible $250/year

$0 $0 $50

Coinsurance up to $3,600 out of pocket

$1/$3 copay $2/$5 copay 15% coinsurance

Catastrophic 5% or $2/$5 copay

$0 $0 $2/$5 copay


Low Income Subsidy

• Applications at SSA or County

• Income up to 150% FPL– $19,245 Couple– $14,355 Individual

• Assets– $10,000 Individual– $20,000 Couple


Auto-enrolled into LIS

• Dual Eligibles

• SSI Beneficiaries

• MSPs: QMBs, SLMBs, QI-1

• Notices out this month from CMS telling them that they are enrolled, don’t need to apply

• All others must apply to LIS (and Part D)


LIS Income and Resources

• Use SSI Rules

• Income: Higher levels, but count applicant and spouse; deductions and exemptions, in kind income rules the same.

• Assets: Exempt assets include the home, small amounts for life insurance policies, burial accounts


LOW INCOME SUBSIDY

• SSA notice and application

• Mailing to 20 million potential eligibles

• Duals auto-enrolled

• July 1, 2005, applications processed

• English and Spanish, language assistance

• Scannable


LOW INCOME SUBSIDY

• Does it matter where you apply?• State

– State/county duty to screen and enroll– MSP programs are undersubscribed– MSP people are deemed eligible for LIS

• SSA – application, outreach, funding incentives– No duty to screen and enroll, forward info– Appeal rights are different


How to Enroll

• Enrolling in a Plan– Directly with PDP– Assistance of others– Authorized Representative under state law

• Enrolling in LIS– Beneficiary– Personal representative– Assistant


Exceptions and Appeals

To obtain drug or lower cost sharing rate:• File Exception Request

– 24 hours Emergency; otherwise 72

• 5 level appeal– Redetermination by plan– Reconsideration – Independent Review Entity– ALJ Hearing– Medicare Appeals Council– Federal District Court


Long Term Care

• No Co-pays

• Special rules for participating pharmacies

• All residents

• Packaging and on call service

• Guidance re emergency

• Transition


Client Concerns

• Limited English Proficient• Cognitive Impairments• Physical Disabilities• Confusion• Need for individual assistance• Mistakes, computer glitches• Reduced coverage; reduced health status• Transition, emergency supply


State Implementation Issues

• Part D excluded drugs – benzodiazepines, barbiturates, over the counter meds

• Emergency and transition coverage• Co-payment and premium assistance• Processing the Low Income Subsidy

applications• Assistance with choosing plan• Outreach and education• Trouble shooting/problem solving• State regulation of Part D plans


TROOP: True Out of Pocket Expenses

• Includes:• Expenses Paid by Medicare Beneficiary• Friend, Family Member, Charity

• Excludes:• Most 3rd party payments –e.g. employers• Drugs not on Plan’s formulary• Over the counter drugs• Drugs purchased from Canada, Mexico

Total for 2006 $3,600


Citations, Reference

• Medicare Part D Statute and Regs– 42 USC § 1395, Tit. XVIII.– 70 Fed. Reg. 4194 (January 28, 2005).– 42 CFR Parts 400,403,411,417 and 423.

• www.cms.gov• Low Income Subsidy

– 70 Fed Reg 10558 (March 4, 2005).– 20 CFR Part 418.– POMS Section HI 03001.000 et seq

http://www.cms.gov/


Consumer information

• www.Medicare.gov– TTY users 1977-486-2048

• www.cms.gov

• 1 800 Medicare

• Medicare and You 2006 Handbook

• HICAPs

• Legal Services Programs -- HCAs

http://www.medicare.gov/

http://www.cms.gov/


Questions?

Call with questions, problems, send client stories

Jeanne FinbergNational Senior Citizens Law Center405 14th Street Suite 1400Oakland, CA 94610510 [email protected]

Copyright 2005 by the National Senior Citizens Law Center. All rights reserved. Permission to copy will be granted to non profit entities with appropriate acknowledgment of credit.

Documents

Medicare Part D Drastic Threats to Rx for Low Income Elderly and Disabled Pathways to Justice Conference San Francisco June 2005 Jeanne Finberg National