© 2005 National Mental Health Association The Medicare Drug Benefit: What Is It and What Does it Mean for Mental Health?

Today We’ll Learn About… New Medicare Drug Benefit Basics Impact on Dual Eligibles Enrolling in the New Benefit Program Extra Help for People with Low Incomes Access to Mental Health Medications Exceptions and Appeals

Medicare Drug Benefit Basics Medicare now will offer insurance to help people pay for prescription drugs This is a voluntary program – you must choose to sign-up This will be available to all people enrolled in Medicare, including: – People with Medicare and Medicaid (called dual eligibles) – Other low-income Medicare recipients – General Medicare recipients Begins January 1, 2006

Mental Illness Is Real to People on Medicare 37% of older adults show signs of depression when they visit their primary care physician Older adults have the highest rate of suicide of any age group in the country Over half of all under-65 Medicare recipients with disabilities have problems with mental functioning. 38% of dual eligibles (approximately 2.5 million people) have a mental or cognitive impairment (MedPAC, 2004).

How the New Drug Benefit Works Private insurance plans will cover prescription drugs: – Prescription Drug Plans (PDPs) only offer the Medicare drug benefit – Medicare Advantage Prescription Drug Plans (MA-PD) are managed care plans (e.g., HMOs) offering comprehensive health care services (including drug benefits) Each plan will have its own formulary (list of drugs) listing which drugs are covered At least two plans will be offered in each region.

Key Dates May-August 2005: Government Letters Sent – SSA Extra Help applications sent to individuals under 150% FPL – Extra Help Applications now accepted by mail/online. Apply Now! – CMS mailed letters to duals to inform them of the new benefit and extra help they will receive September 2005: Approved Plans Announced October 2005: Information regarding plan options available – Plan Finder available on – Letters to dual eligibles regarding auto-enrollment sent November 15, May 15, 2006 – Initial enrollment period January 1, 2006 – Medicare Rx benefit begins – Medicaid prescription drug coverage for dual eligibles ends

Cost of the Basic Benefit Costs for General Medicare Population: Estimated average $32 a month premium (in addition to Part B) $250 annual deductible 25% of drug costs between $250 and $2,250 annually 100% of drug costs between $2,250 and $5,100 (known as the “doughnut hole”) annually “Catastrophic benefit,” above $5,100 in total drug costs, greater of: – 5% of drug costs; or – $2 for generics and $5 for brand drugs

Medicare Rx Benefit and Dual Eligibles People with both Medicare and Medicaid coverage are “dual eligibles.” Duals are automatically enrolled in a prescription drug plan but may choose a different plan. As of Jan. 1, 2006, Medicare will pay for prescription drugs. Medicaid drug coverage for dual eligibles will end.

Benefit Costs for Dual Eligibles No premiums or deductibles $1-$5 co-payments No doughnut hole in coverage No co-payments for drug costs over $5,100

Enrollment for Dual Eligibles October 2005: Letters from CMS will notify duals about automatic enrollment in a plan with lowest premium in their area. Duals can sign up for plans with premiums higher than $32 per month, but must pay difference of premium. All Duals can switch plans up to once a month.

Enrollment for Everyone Else New drug benefit is voluntary October information regarding plan options will be available Initial enrollment period: Nov. 15, 2005 – May 15, 2006 Enroll by applying to private plans offering coverage in your area

Late Enrollment Penalties apply if you wait to sign up after deadline and do not have comparable drug coverage in the mean time. – Premiums increase by 1% for every month without coverage after May 15, 2006 No penalties if you have comparable drug coverage through other sources: – Former or current employers – Veteran’s, military or federal benefits – Private individual insurance

Extra Help for Low-Income People Under 135% of poverty and minimal assets: – No premiums or deductible – $2-$5 co-payments – No “doughnut hole” or gap in coverage – No co-payments for drug costs over $5,100 Under 150% of poverty and minimal assets: – Premiums on a sliding scale – $50 deductible – 15% co-payment on drug costs up to $5,100 – No “doughnut hole” or gap in coverage – $2-$5 co-payments for drug costs over $5,100

Enrollment for Low-Income People Enrollment is a two step process. 1. Apply for Extra Help through Social Security Administration or State Medicaid agency, except: If you receive full Medicaid or Medicaid assistance with Medicare premiums or co-payments, you will receive assistance automatically If you receive Supplemental Security Income (SSI), you will receive assistance automatically 2. Sign up for the drug benefit itself by applying to private plans offering coverage in your area – no later than May 15, 2006.

Access to Mental Health Medications Minimum requirement to cover two drugs per class CMS guidance states a “all or substantially all” drugs must be covered in six categories including anti-psychotics, anti-depressants, and anti-convulsants – Requirement applies through 2006 contract year. – Extended release forms not included – exception will be required for refills. – Existing prescriptions for non-formulary medications will be refilled, according to CMS, without requiring an exception step. Some drugs are excluded from coverage by statute – Benzodiazepines, barbiturates, and drugs to treat anorexia for example – State Medicaid programs may still cover these medications and receive federal matching funds.

Access to Mental Health Medications CMS requires plans to offer at least 30-day supply of existing medication for non-formulary medications. Plans may change formularies to remove drugs or change co-payments with: – 60 days notice to affected prescribers and CMS; AND – 60 days notice to affected enrollees, OR – 60-day supply of the drug Utilization management – Tiered co-pays and prior authorization may apply – Step therapy (for new patients)

Exceptions and Appeals Private plans offering new drug benefit must have process to allow exceptions to tiered cost-sharing and to lists of covered drugs (formularies) Prescribing physician must file statement supporting the exception request The plans determine criteria for granting exception and for determining medical necessity

Exceptions and Appeals Process does not start until: – consumer requests formal determination or exception regarding coverage of a drug (or co-pay) – Physician statement supporting medical necessity is received by plan Plans must respond to initial exception request within 72 hours (24 hours in emergency situation) Multiple appeals levels – No external review (outside the plan) until the 3rd level of appeal (up to 17 days after initial request) – Plans not required to provide existing drug during appeal after initial transition supply

Key Dates May-August 2005: Government Letters Sent – SSA Extra Help applications sent to individuals under 150% FPL – Extra Help Applications now accepted by mail/online. Apply Now! – CMS mailed letters to duals to inform them of the new benefit and extra help they will receive September 2005: Approved Plans Announced October 2005: Information regarding plan options available – Plan Finder available on – Letters to dual eligibles regarding auto-enrollment sent November 15, May 15, 2006 – Initial enrollment period January 1, 2006 – Medicare Rx benefit begins – Medicaid prescription drug coverage for dual eligibles ends