medicare part d drastic threats to rx for low income elderly and disabled pathways to justice...
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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
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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
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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
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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
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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
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• Need multiple prescriptions
• Nearly 25% are in LTC
• Are likely to need assistance
Duals: a vulnerable population
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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)
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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
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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
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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
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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
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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
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Long Term Care
• No Co-pays
• Special rules for participating pharmacies
• All residents
• Packaging and on call service
• Guidance re emergency
• Transition
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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
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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
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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
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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
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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
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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.