Medicare Part D Pat MacClarence, AM, LCSW University of Chicago Medical Center Outpatient Senior Center Ethnogeriatrics and US Healthcare System MEDC Course Co-Director

Goals 1. Understand the relevance of poverty in senior population 2. Understand the basics of Medicare D 3. Be able to describe Medicare Part D to your grandmother

What is Poverty? Poverty: state of one who lacks a usual or socially acceptable amount of material possessions or money. 1 Poverty: state of one who lacks a usual or socially acceptable amount of material possessions or money. 1 Absolute poverty Absolute poverty Relative poverty Relative poverty 2009: 13.3% of Americans; 43.6 million people lived in poverty : 13.3% of Americans; 43.6 million people lived in poverty 2 1 Zweig, Michael (2004) What's Class Got to do With It, American Society in the Twenty-first Century. ILR Press. War on Poverty definition 2 US Census Bureau

Poverty Guidelines What is a poverty guideline? What is a poverty guideline? Numbers generated by DHHS Why do poverty guidelines exist? Why do poverty guidelines exist? Used to determine program eligibility for federal and state programs Examples: AIDS Drug Assistance Program AIDS Drug Assistance Program Community Care for Seniors (homemaker service, adult day care) Community Care for Seniors (homemaker service, adult day care) Head Start Head Start Legal Services for the Poor Legal Services for the Poor Low Income Heating and Energy Assistance Program (LIHEAP) Low Income Heating and Energy Assistance Program (LIHEAP)

Medicare Part D: Background Medicare Prescription Drug, Improvement and Modernization Act [signed by George W. Bush December 2003, effective January 1, 2005] was the legislation that created Part D Who is eligible: Every person eligible for Medicare is eligible for Medicare D Every person eligible for Medicare is eligible for Medicare D Basic idea : Voluntary program designed to provide significant relief from the often prohibitive costs of medication How did they execute this? Initial bumps in the road! -

Medicare Part D: Signing Up How it works Insurance Companies: create Medicare D plans to include at least 2 drugs in each major category Insurance Companies: create Medicare D plans to include at least 2 drugs in each major category Patients: pick a plan based on their personal drug profile Patients: pick a plan based on their personal drug profile Cost comparison - Annual deductible, monthly premium, individual drug co- pays Cost comparison - Annual deductible, monthly premium, individual drug co- paysIssues Can you identify issues that may have arisen? Can you identify issues that may have arisen?

Medicare Part D: Social Security Extra Help Purpose Additional assistance with med costs to seniors with limited income. Additional assistance with med costs to seniors with limited income.Covers Annual deductible Annual deductible Monthly premiums Monthly premiums Lower set costs of medication co-pays Lower set costs of medication co-paysIssues/barriers Another application Another application Suspicion Suspicion Toss or ignore the mail Toss or ignore the mail Completely directed to seniors – junk mail, illiteracy, dementia… Completely directed to seniors – junk mail, illiteracy, dementia…

Medicare D Chart Annual deductible Initial coverage The Donut Hole Catastrophic coverage

More about the Donut Hole… Extra assistance: For dual-eligible patients Illinois Cares Rx program Recent and anticipated changes due to Affordable Health Care Act: 2011 change: 50% subsidy name brand and 7% subsidy generic drugs 2012 change: up to 14% subsidy of generic drugs 2020: constant coverage, no periods of non-coverage

Coverage Stages Coverage Ranges Medicare/ Plan Pays [% and $] Person with Medicare Pays Annual Deductible $0 to $320 0%$0100%$320 Initial Coverage $320 to $2,930 75%$2,29025%$ Coverage Gap $2, to $6, %$0100%$3, Total (TrOOP) a $2,290 b $4,700 c Catastrophic Coverage $6, & up 95% No Maximum 5% or small co-pay No Maximum Standard Medicare Prescription Drug Coverage & Costs [Medicare Prescription Drug Improvement and Modernization Act (signed December 2003, effective January ) ] a TrOOP: True out of pocket expense or $4,700 in 2012 b The amount Medicare drug coverage pays before the catastrophic coverage = $2,290 c $320 (deductible) + (($2930-$320)*25%) (initial coverage) + (($ $2930)*100%) (coverage gap) = $4,700 Max OOP pre catastrophic coverage

Mr. Washington’s Medicine expenses by month for 2012 with AARP MedicareRx Preferred Medicare D Plan Annual Deductible: 0-$320 Annual Deductible: 0-$320 Mr. Washington’s Deductible: $0 Mr. Washington’s Deductible: $0 Monthly Premium: 0-$48/month Monthly Premium: 0-$48/month Mr. Washington’s monthly Premium: $34.20 Mr. Washington’s monthly Premium: $34.20 Monthly Medication cost $168 Monthly Medication cost $168 Annual cost for Mr. Washington: $2, medication + $ premiums TL $3, Annual cost for Mr. Washington: $2, medication + $ premiums TL $3, Donut Hole begins at $2,930 Donut Hole begins at $2, JanFebMarAprilMayJuneJulyAugSeptOctNovDec Drug Costs $168$168$168$168$377.24$ $375.45$375.45$226.80$41.12$41.12 Premium$34.20$34.20$34.20$34.20$34.20$34.20$34.20$34.20$34.20$34.20$34.20$34.20