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With information trickling in slowly, providers, patients and others have questions on the new Medicare Prescription Drug Coverage and specifically what they should do. For the first time, Medicare will now subsidize payments for outpatient brand name and generic prescription drugs for 43 million Medicare beneficiaries under the Medicare Modernization Act (MMA) of 2003. It will pay for about half of drug costs and protect against having very high drug expenses.
Medicare is a federal health insurance program. Individuals 65 years of age and older, disabled individuals under 65 years of age, and individuals with end-stage renal disease are eligible for Medicare. The Medicare program includes Medicare Part A, which pays for hospitalization, and Medicare Part B, which pays for physician visits and other outpatient services, certain home health services, durable medical equipment and other items. Medicare covers prescription drugs administered during hospitalization and physician visits, but outpatient prescription drugs have never been covered to date.
Individuals who have Medicare Part A and/or who are enrolled in Medicare Part B are eligible to enroll in the new Medicare outpatient prescription drug benefit through traditional fee-for-service stand alone “prescription drug plans (PDPs),” or through Medicare Advantage-Prescription Drug (MA-PD) plans. The MA-PD plans can use their efficiencies in providing coordinated-care benefits to offer supplemental prescription drug coverage for no or a reduced supplemental premium, as part of a single comprehensive plan of all health care services. The MA-PDs include Medicare’s coordinated care programs, such as Heath Maintenance Organizations (HMOs), local Preferred Provider Organizations (PPOs), and a new option available in 2006, regional PPO plans.
Under the standard cost-sharing benefit structure, beneficiaries (who are not low-income) must pay a monthly premium and out-of-pocket costs ($250 deductible, and coinsurance or co-payment) that vary across different Medicare approved plans (PDPs and MA-PDs). The out of pocket costs include $250 deductible each year and a 25 percent coinsurance on the next $2,000 worth of covered drugs. After this, there is a gap in coverage in which the individual must pay all drug costs until they have paid an additional $2,850 out-of-pocket.
When the beneficiary has paid $3,600 as out-of-pocket costs, Medicare will pay about 95 percent of the cost of covered drugs (known as the catastrophic coverage) until the end of the calendar year. Almost one-third of persons with Medicare will qualify for extra help in paying for their prescription drug coverage through low-income subsidies to them. These include those with Medicare receiving Medicaid, or a Medicare Savings program, or Supplemental Security Income (SSI), who automatically qualify. Others with incomes below 150 percent of the Federal Poverty Level and limited resources need to apply to Social Security administration to qualify for extra help.
Depending on their annual income (below $14,355 if single or $19,245 if married and living with spouse) and resources (valued under $11,500 if single or $23,000 if married and living with spouse) persons with Medicare would qualify. Low-income beneficiaries will pay nothing (if living in nursing homes) or low co-payments and no monthly premium or deductible if they are below 135 percent of the Federal Poverty Level for plans providing basic drug coverage. If beneficiaries choose to enroll in an enhanced alternative plan, they would pay some cost toward the premium for this plan.
In Nebraska, Medicare beneficiaries can choose from about 17 organizations offering PDPs, and four organizations offering MA-PD plans while dual eligibles (on Medicare and Medicaid) can choose from about 11 organizations offering PDPs. Since it is voluntary for beneficiaries to enroll into the new prescription drug coverage, they need to be informed to make educated decisions on their choice. Some information is provided below for this purpose.
The Nov. 1 videoconference at UNMC’s Eppley Science Hall Amphitheater is expected to educate providers, professional partners, organizations and volunteers on the new Medicare prescription drug benefit, available plans in Nebraska and step-by-step enrollment guidance. Participants will have an opportunity to discuss and collaborate on ways to help educate and assist their community’s Medicare beneficiaries.
What to tell patients to help them make informed decisions?
Step 1: Collect personal information – Social Security number, Medicare claim number, last name, date of birth, effective date for Medicare Part A or Medicare Part B, and ZIP code.
Step 2: Call Social Security for applying for extra help to pay for prescription drug coverage.
Step 3: Review whether the current drug coverage is creditable (equivalent/better than the new plans) based on communication from existing plan or contact benefits administrator by Nov 15.
Step 4: List the drugs (and strength) taken and pharmacy where prescriptions are usually filled.
Step 5: Compare plans (on www.medicare.gov) based on drug coverage, cost, and convenience of pharmacy access, and choose the type of plan to enroll
a. Find a plan that covers ALL the beneficiary’s drugs, or covers their MOST EXPENSIVE drugs
b. Find a plan that has the beneficiary’s regular pharmacy in the plan’s network
c. Choose a plan providing immediate coverage to the drugs currently taken and check whether the needed drugs are placed in a higher co-pay tier, or are subject to prior authorization or step therapy requirements.
When to enroll?
1. Initial Enrollment Period: Nov. 15, through May 15, 2006
a. Join Nov. 15 through Dec. 31 – Coverage begins Jan. 1, 2006
b. Join Jan. 1 – May 15, 2006- Coverage begins the month after senior joins
c. If someone doesn’t join a plan by May 15, 2006 – i) Will have to wait until November 2006 to join and will not be able to access benefits until January 2007; ii) Pay 1 percent more as penalty on monthly premium, for every month the individual waited to enroll in a Medicare prescription drug plan, and currently did not have creditable coverage (equivalent or better than the new prescription drug plan).
2. Annual Enrollment Period: Nov. 15 – Dec. 31 each year beginning in 2006. Standard (not low income) beneficiaries need to enroll every year during this time.
3. 3. Dual eligibles who do not choose a plan to enroll will be automatically enrolled before Dec. 31, to ensure continuous drug coverage but can switch plans subsequently anytime.
Resources
a. “Medicare & You 2006” handbook received by Medicare beneficiaries in mail in October 2005 – Review information on new prescription drug coverage plans for a state/region.
b. Paper application through plan offering the drug coverage or on the plan’s web site or
www.medicare.gov using Medicare’s online enrollment center
c. Call 1-800-MEDICARE (1-800-633-4227), TTY 1-877-486-2048 or use Prescription Drug Plan Finder online tool on www.medicare.gov for free personalized information/enrollment
d. Call NEBRASKA State Health Insurance Assistance Program (SHIP): 1-800-234-7119
e. Social Security Administration (SSA) at 1-800-772-1213 (TTY 1-800-325-0778) or www.socialsecurity.gov for extra help applications by persons with low income & resources
f. If you have one of this, call TRICARE: 1-888-363-5433 or VA: 1-800-827-1000 or FEHBP: 1-800-332-9798 for more details.
g. Local Medicare-related enrollment events for free personalized counseling.
For more questions or details, contact Jayashri Sankaranarayanan, Ph.D., assistant professor, Department of Pharmacy Practice, UNMC College of Pharmacy, at jsankara@unmc.edu or 559-5267.