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

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Presentation on theme: "Medicare Part D Drastic Threats to Rx for Low Income Elderly and Disabled Pathways to Justice Conference San Francisco June 2005 Jeanne Finberg National."— Presentation transcript:

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

2 Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) Biggest Change in Government Health Care Programs in 40 years

3 NSCLC copyright

4 4 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

5 NSCLC copyright 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

6 NSCLC copyright 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

7 NSCLC copyright 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

8 NSCLC copyright Need multiple prescriptions Nearly 25% are in LTC Are likely to need assistance Duals: a vulnerable population

9 NSCLC copyright 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

10 NSCLC copyright 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

11 NSCLC copyright 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

12 NSCLC copyright 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

13 NSCLC copyright 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

14 NSCLC copyright 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

15 NSCLC copyright 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%

16 16 Medicare Standard Drug Benefit 2006 CoverageAnnual Drug Costs: Part D Plan Pays: Beneficiary Pays: PremiumsnoneAbout $37/mo Deductible$0 - $250$0$250 Initial Limit to Coverage $251 - $2,25075% ($1,500)25% ($500) Coverage Gap (Donut Hole) $2,251 - $5,100$0100% ($2,850) Coverage Resumes Over $5,10095% of remaining costs Up to 5% of remaining costs

17 NSCLC copyright 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

18 NSCLC copyright Voluntary? Dual Eligibles – Lose Medi-Cal No other coverage Others may enroll or not, but penalty for postponed enrollment unless creditable coverage 1% of base premium for each month delay

19 NSCLC copyright 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

20 20 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)

21 21 LOW INCOME SUBSIDY Group 1Group 2Group 3 Premium $37/month $0 Sliding scale based on income Deductible $250/year $0 $50 Coinsurance up to $3,600 out of pocket $1/$3 copay$2/$5 copay15% coinsurance Catastrophic 5% or $2/$5 copay $0 $2/$5 copay

22 NSCLC copyright 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

23 NSCLC copyright 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)

24 NSCLC copyright 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

25 NSCLC copyright 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

26 NSCLC copyright 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

27 NSCLC copyright 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

28 NSCLC copyright 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

29 NSCLC copyright Long Term Care No Co-pays Special rules for participating pharmacies All residents Packaging and on call service Guidance re emergency Transition

30 NSCLC copyright 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

31 NSCLC copyright 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

32 NSCLC copyright TROOP: True Out of Pocket Expenses Includes: Expenses Paid by Medicare Beneficiary Friend, Family Member, Charity Excludes: Most 3 rd 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

33 NSCLC copyright Citations, Reference Medicare Part D Statute and Regs –42 USC § 1395, Tit. XVIII. –70 Fed. Reg (January 28, 2005). –42 CFR Parts 400,403,411,417 and Low Income Subsidy –70 Fed Reg (March 4, 2005). –20 CFR Part 418. –POMS Section HI et seq

34 NSCLC copyright Consumer information –TTY users Medicare Medicare and You 2006 Handbook HICAPs Legal Services Programs -- HCAs

35 NSCLC copyright Questions? Call with questions, problems, send client stories Jeanne Finberg National Senior Citizens Law Center th Street Suite 1400 Oakland, CA 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.


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