Medicare Part DJohn A. Geib

10/3/05

Medicare Modernization Act Medicare Modernization Act (MMA) 2003 and (MMA) 2003 and How the MMA How the MMA

impacts California’s Medi-Cal Programimpacts California’s Medi-Cal Program

Largest change in healthcare in 40 yearsLargest change in healthcare in 40 years Low income and Uninsured Medicare Low income and Uninsured Medicare

members will obtain significant new benefitsmembers will obtain significant new benefits Major change for dual eligible – As of January Major change for dual eligible – As of January

1, 2006, Medi-Cal will no longer provide drug 1, 2006, Medi-Cal will no longer provide drug coverage for “Dual Eligible (DE)” individuals. coverage for “Dual Eligible (DE)” individuals. Those Individuals who have both Medicare Those Individuals who have both Medicare and Medi-Cal.and Medi-Cal.

When can I enroll in Part D?When can I enroll in Part D?

Beginning November 15, 2005. Beginning November 15, 2005. In 2006, there will be an “initial enrollment In 2006, there will be an “initial enrollment

period” for Part D that period” for Part D that starts November 15, starts November 15, 2005 and ends May 15, 20062005 and ends May 15, 2006. However, If . However, If you want your Medicare Prescription Drug you want your Medicare Prescription Drug Coverage (Part D) to start on January 1, 2006 Coverage (Part D) to start on January 1, 2006 you must enroll in a Part D plan before the end you must enroll in a Part D plan before the end of 2005. of 2005.

When can I enroll in Part D?When can I enroll in Part D?

Most beneficiaries must choose and enroll in a Drug Most beneficiaries must choose and enroll in a Drug Plan to get coverage. If you have a Medigap policy Plan to get coverage. If you have a Medigap policy with prescription drug benefits, you will receive a with prescription drug benefits, you will receive a notice from your insurance company in the Fall of notice from your insurance company in the Fall of 2005. The notice will tell you about the need to make 2005. The notice will tell you about the need to make a choice between your Medigap benefits and the new a choice between your Medigap benefits and the new Medicare benefit. Medicare benefit.

People who have a retiree plan that includes benefits People who have a retiree plan that includes benefits for prescription drugs will also receive a notice from for prescription drugs will also receive a notice from their company this coming fall. The notice will tell their company this coming fall. The notice will tell you if your benefits will change and whether to enroll you if your benefits will change and whether to enroll in Part D. in Part D.

When can I enroll in Part D?When can I enroll in Part D?

If you already have some type of prescription drug If you already have some type of prescription drug coverage that is at least as good as Medicare’s, you coverage that is at least as good as Medicare’s, you might be able to keep it without the risk of paying a might be able to keep it without the risk of paying a higher Part D premium if you later decide to enroll in higher Part D premium if you later decide to enroll in Part D. If you have a Medigap policy with Part D. If you have a Medigap policy with prescription drug benefits you will receive a notice prescription drug benefits you will receive a notice from your insurance company in the Fall of 2005. from your insurance company in the Fall of 2005. The notice will tell you about the need to make a The notice will tell you about the need to make a choice between your Medigap benefits and the new choice between your Medigap benefits and the new Medicare benefit. Medicare benefit.

When can I enroll in Part D?When can I enroll in Part D?

Dual Eligibles will be Auto-Enrolled in a plan: Dual Eligibles will be Auto-Enrolled in a plan: on November 15, 2005– they will have the on November 15, 2005– they will have the option to change those plans to meet the option to change those plans to meet the individuals needs.individuals needs.

QMB/SLMB/QI-1 will be auto-enrolled on QMB/SLMB/QI-1 will be auto-enrolled on May 15, 2006.May 15, 2006.

What if I don’t enroll in a Part D plan What if I don’t enroll in a Part D plan right away?right away?

You don’t have to enroll in the new Part D You don’t have to enroll in the new Part D drug benefit if you don’t want to. But, if you drug benefit if you don’t want to. But, if you don’t enroll when you are first eligible for it don’t enroll when you are first eligible for it and later change your mind, you might have to and later change your mind, you might have to pay a higher premium (1% increase in pay a higher premium (1% increase in premium per month) 12 months = 12%, premium per month) 12 months = 12%, 24months = 24%. You can also only enroll in 24months = 24%. You can also only enroll in Part D at the end of every year. Part D at the end of every year.

What will the new Part D benefit look What will the new Part D benefit look like?like?

Information about individual Part D prescription drug Information about individual Part D prescription drug plans won’t be available until mid-October 2005 plans won’t be available until mid-October 2005 (through the (through the www.medicare.govwww.medicare.gov website and in the website and in the “Medicare and You” handbook mailed to all “Medicare and You” handbook mailed to all Medicare beneficiaries).Medicare beneficiaries).

The prescription drug plans (PDPs) and Medicare The prescription drug plans (PDPs) and Medicare Advantage plans that offer prescription benefits (MA-Advantage plans that offer prescription benefits (MA-PDs) will charge monthly premiums (around $37 in PDs) will charge monthly premiums (around $37 in 2006). They will also charge a yearly deductible and 2006). They will also charge a yearly deductible and have coverage limits. These limits will include a gap have coverage limits. These limits will include a gap in coverage (referred to as the “doughnut hole”) in coverage (referred to as the “doughnut hole”) during which you must pay all drug costs before during which you must pay all drug costs before Medicare begins paying againMedicare begins paying again. .

What will the new Part D benefit look What will the new Part D benefit look like?like?

Deductible of $250 Deductible of $250 After you pay the deductible, the prescription After you pay the deductible, the prescription

drug plan will pay 75% of your drug costs and drug plan will pay 75% of your drug costs and you will pay the remaining 25% until your you will pay the remaining 25% until your total drug costs reach $2,250 total drug costs reach $2,250

Gap in coverage: you will be responsible for Gap in coverage: you will be responsible for all drug costs between $2,251 and $5,100 all drug costs between $2,251 and $5,100

Once your total drug costs reach $5,100, the Once your total drug costs reach $5,100, the prescription drug plan will pay 95% of your prescription drug plan will pay 95% of your drug costs and you will pay up to 5% of drug costs and you will pay up to 5% of remaining drug costs remaining drug costs

What will the new Part D benefit look What will the new Part D benefit look like?like?

Part D plans, however, may look different than this. Part D plans, however, may look different than this. Companies that offer Part D plans can change some Companies that offer Part D plans can change some of these cost-sharing limits. Part D plans will also of these cost-sharing limits. Part D plans will also have some flexibility in deciding which drugs to have some flexibility in deciding which drugs to cover, and will create a list of covered drugs (also cover, and will create a list of covered drugs (also known as a formulary). In addition, if you need a known as a formulary). In addition, if you need a drug that your plan does not cover, you may have to drug that your plan does not cover, you may have to pay out-of-pocket for the drug, and that payment will pay out-of-pocket for the drug, and that payment will not count toward the coverage limits. not count toward the coverage limits.

17- 19 different Plans will be available to choose 17- 19 different Plans will be available to choose from. Premiums ranging from $37(standard plans) from. Premiums ranging from $37(standard plans) - ?? (enhanced plans). All plans will have the same - ?? (enhanced plans). All plans will have the same Core drug coverage.Core drug coverage.

Low-Income Subsidy (LIS)Low-Income Subsidy (LIS) The law also provides extra help with the cost of The law also provides extra help with the cost of

Medicare Part D prescription drugs for those who Medicare Part D prescription drugs for those who qualify. This extra help is also known as the “low-qualify. This extra help is also known as the “low-income subsidy” (LIS) program. income subsidy” (LIS) program.

If you have both Medicare and Medi-Cal, you do not If you have both Medicare and Medi-Cal, you do not need to apply for the low-income subsidy because need to apply for the low-income subsidy because you will get it automatically. you will get it automatically.

If you don’t qualify for Medi-Cal but you are enrolled If you don’t qualify for Medi-Cal but you are enrolled in one of the Medicare Savings programs in one of the Medicare Savings programs (QMB/SLMB/QI-1) for people with low incomes, (QMB/SLMB/QI-1) for people with low incomes, you will also automatically get the new Part D low-you will also automatically get the new Part D low-income subsidy. income subsidy.

Low-Income Subsidy (LIS)Low-Income Subsidy (LIS)

If I’m not automatically enrolled in the low-If I’m not automatically enrolled in the low-income subsidy, how do I apply?income subsidy, how do I apply?

You can apply for the low-income subsidy at your You can apply for the low-income subsidy at your local Social Security or Medi-Cal offices. If you local Social Security or Medi-Cal offices. If you apply at the Medi-Cal office you should be screened apply at the Medi-Cal office you should be screened for other programs you might qualify for at the same for other programs you might qualify for at the same time. At the end of May 2005, the Social Security time. At the end of May 2005, the Social Security Administration (SSA) began sending letters to people Administration (SSA) began sending letters to people who may qualify for the low-income subsidy.who may qualify for the low-income subsidy.

Low-Income Subsidy (LIS)Low-Income Subsidy (LIS) You will also be able to apply for the low-income You will also be able to apply for the low-income

subsidy over the phone (1-800-772-1213) and on the subsidy over the phone (1-800-772-1213) and on the Social Security website (Social Security website (www.socialsecurity.govwww.socialsecurity.gov) ) beginning in July 2005. beginning in July 2005.

If you already have Medi-Cal, you do not have to pay If you already have Medi-Cal, you do not have to pay a premium for the plan you choose or are assigned to a premium for the plan you choose or are assigned to if the plan's premium is no more than the premium if the plan's premium is no more than the premium amount covered by the low-income subsidy. amount covered by the low-income subsidy.

If the plan's premium is more than the subsidy’s If the plan's premium is more than the subsidy’s premium amount, you can pay the difference between premium amount, you can pay the difference between the subsidy and the plan's premium, or you can enroll the subsidy and the plan's premium, or you can enroll in another plan that has a premium at the same price in another plan that has a premium at the same price or lower than the subsidy amount. or lower than the subsidy amount.

Low-Income Subsidy (LIS)Low-Income Subsidy (LIS)

If you do not have Medi-Cal but get the low-If you do not have Medi-Cal but get the low-income subsidy, in most cases you will have a income subsidy, in most cases you will have a copayment of $2 for generic drugs and $5 for copayment of $2 for generic drugs and $5 for brand name drugs. You also have the right to brand name drugs. You also have the right to pay the difference between the subsidy and the pay the difference between the subsidy and the plan's premium if you find a plan that meets plan's premium if you find a plan that meets your needs but costs more than the premium your needs but costs more than the premium subsidy. subsidy.

Cost Sharing (LIS) for Dual Cost Sharing (LIS) for Dual EligiblesEligibles

Cost Sharing (LIS) for those Cost Sharing (LIS) for those < 135% FPL< 135% FPL

Cost Sharing (LIS) for those Cost Sharing (LIS) for those between 135% and 150% FPLbetween 135% and 150% FPL

Cost Sharing (LIS) for thoseCost Sharing (LIS) for those> 150% FPL> 150% FPL

What if I have Medi-Cal with a What if I have Medi-Cal with a Share of Cost (SOC)?Share of Cost (SOC)?

If you have Medi-Cal with a Share of Cost (SOC), If you have Medi-Cal with a Share of Cost (SOC), and have an annual income at or below 150% of the and have an annual income at or below 150% of the federal poverty level ($14,355 for an individual and federal poverty level ($14,355 for an individual and $19,245 for a couple), you should apply for the low-$19,245 for a couple), you should apply for the low-income subsidy at your local SSA or Medi-Cal office.income subsidy at your local SSA or Medi-Cal office.

If you later meet your SOC within a given month, If you later meet your SOC within a given month, your cost-sharing amounts for the low-income your cost-sharing amounts for the low-income subsidy will become the same as those for people subsidy will become the same as those for people with full Medi-Cal within those FPL income limits. with full Medi-Cal within those FPL income limits.

After meeting your SOC once, you will continue to After meeting your SOC once, you will continue to qualify for the lower low income subsidy cost-sharing qualify for the lower low income subsidy cost-sharing amounts for the rest of that calendar year. amounts for the rest of that calendar year.

Medicare Part DMedicare Part DResourcesResources

HICAP (Health Insurance Counseling and HICAP (Health Insurance Counseling and Advocacy Program) 1-800-434-0222Advocacy Program) 1-800-434-0222

www.CalMedicare.orgwww.CalMedicare.org Disability Benefits 101Disability Benefits 101

www.db101.orgwww.db101.org Low Income Subsidy (LIS)Low Income Subsidy (LIS) Social Security Social Security

Administration (SSA) 1-800-772-1213Administration (SSA) 1-800-772-1213

QuestionsQuestions