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Medicare Prescription Drug Program (Part D) Review Medicare 4 parts of Medicare • Part A: Hospital Insurance • Part B: Medical Insurance • Part C: Medicare Advantage Plans • Part D: Prescription Drug Coverage Part A & B= Original Medicare • Automatic enrollment if getting SS benefits, must enroll if not • Premiums always for Part B, only for A if not enough credits • Not comprehensive coverage, has coverage gaps • Out-of-pocket costs for A & B change yearly- see chart 3 Medicare Pays for reasonable and medically necessary services There are coverage gaps in Medicare including: Part A in-patient hospital deductible Part A daily co-payment for in-patient hospital days 61-90 Part A daily co-payment for in-patient hospital days 91-150 Part A daily co-payment for SNF days 21-100 Part B annual deductible Part B co-insurance (usually 20%) First three pints of blood Coverage outside the United States 4 Medicare Advantage Alternative option to Original Medicare • Offered by a private company that contracts with Medicare to provide a beneficiary with their Part A & B benefits • One way for a beneficiary to get additional Medicare coverage to cover the gaps in Original Medicare The plan must offer Part D drug coverage – members who want drug coverage may only take drug plan offered by the Medicare Advantage plan (except for PFFS) • If enroll in stand alone PDP, will be dis-enrolled from Part C and returned to Original Medicare Different plan types available • HMO, HMO-POS, PPO, SNP, PFFS 5 Medicare Prescription Drug Program (Part D) Part D Overview Medicare offers prescription drug coverage to everyone with Medicare Provides outpatient prescription drug coverage Beneficiaries with Part A and/or Part B are eligible 2 ways to get prescription coverage: 1. Medicare Prescription Drug Plans (PDPs); also known as stand alone plans 2. Medicare Advantage (Part C) Plans with drug coverage Part D is voluntary, but eligible beneficiaries who do not enroll may be subject to a penalty 7 Part D Plans May differ on many levels but must meet both pharmacy access and formulary standards set by CMS PDPs and MA-PDs may vary based on: • Benefit Design • Monthly Premium • Co-payments • Formulary • Drug Prices • Pharmacy Network All plans must offer the standard prescription drug benefit or its equivalent 8 Formulary The prescription benefit includes a list of “covered drugs” and this list is called the “formulary” If the insurer is very selective about which drugs are to be covered, then it is sometimes referred to as a “closed formulary”. If the formulary is open to all drugs but places drugs into different cost sharing categories or “tiers”, it is referred to as an “open formulary” Each plan must meet formulary standards. The formulary must include and cover certain drugs or certain classes of drugs. Medicare has established a category of excluded drugs 9 Examples of Part D Excluded Drugs Drugs for anorexia, weight loss or weight gain Drugs for the symptomatic relief of cough and colds Prescription vitamins and mineral products, except prenatal vitamins and fluoride preparations Non-prescription drugs (over the counter) Drugs that could be covered under Medicare Part A and/or Medicare Part B 10 Coverage Rules Plans may have coverage rules to make sure certain drugs are used correctly and only when medically necessary. These rules may include the following 3 restrictions: 1. Prior Authorization • Before the plan will cover a certain drug, the prescriber must first contact the plan and show there’s a medically-necessary reason why the beneficiary must use that particular prescription drug 2. Step Therapy • Must first try certain less expensive drugs that have been proven effective for most people with their condition before the beneficiary can move up a “step” to a more expensive drug 3. Quantity Limits • For safety and cost reasons, plans may limit the amount of prescription 11 drugs they cover over a certain period of time Formulary Issues Beneficiaries can take the following steps when a drug they are taking is not covered under the formulary or has restrictions • Ask prescriber if she/he meets prior authorization or step therapy requirements or if there are generic, over-thecounter or less expensive brand name drugs • Request a coverage determination (including an “exception”) that the plan cover the drug • Try to find a SEP in order to switch Part D plans to one that has a formulary that covers all of the drugs 12 Generic Vs. Brand Name Drugs Massachusetts is a generic-mandated state in which all pharmacists have to dispense generic if available unless the physician indicates: no substitution Generic drugs contain the same active ingredients, have the same strength and dosage as the brand name drug and must meet the same government quality control standards 13 Four Enrollments Periods • Initial Enrollment Period (IEP) • Open Enrollment Period (OEP) • Special Enrollment Period (SEP) • Medicare Advantage Disenrollment Period (MADP) 14 Initial Enrollment Period 65+: Mimics that of Medicare Part B (7 month period) Under 65: Mimics that of Medicare Part B; beneficiaries who become eligible for Medicare due to a disability can join during period 3 months before through 3 months after 25th month of Social Security Disability Income MassHealth members: When eligible for Medicare, primary prescription coverage under MassHealth ends. MassHealth notifies Medicare of member’s dual status and individual has 60 days to enroll in Part D plan or will be auto-enrolled in a plan chosen at random 15 Open Enrollment Period October 15th - December 7th, coverage effective January 1st During this period beneficiaries can: • Join a plan for the first time (If late enrollee, would be subject to late enrollment penalty) • Switch plans (including changing MA plans) • Drop a plan To switch a plan: • Simply enroll in new plan. No need to cancel old Medicare drug plan as the coverage will end when the new drug plan begins 16 Special Enrollment Period Certain conditions make beneficiaries eligible for a SEP during which they can enroll in a Part D plan outside of the initial enrollment period. They include: • Moving out of their plan’s service area • Involuntary loss of creditable coverage • Having dual eligible status (enrolled in MassHealth & Medicare or enrolled in a Medicare Savings program) • Being a member of Prescription Advantage (a State Pharmaceutical Assistance Program known as a SPAP) • Leaving creditable coverage (including COBRA coverage) 17 • Switching to a 5-star rated plan Medicare Advantage Disenrollment Period January 1st – February 14th During this period, beneficiary CAN: • Dis-enroll from a MA plan and return to original Medicare and enroll in a stand-alone Medicare Prescription Drug Plan (PDP) • Dis-enroll from a MA plan without drug coverage and enroll in a PDP. May be subject to a late enrollment penalty During this period, beneficiary CANNOT: • Switch from Original Medicare to a MA plan • Switch from one Medicare Prescription Drug plan to another • Switch from one MA plan to another 18 Late Enrollment If a Medicare beneficiary does not join a Medicare Prescription Drug Plan when first eligible and didn’t have other creditable prescription drug coverage that met Medicare’s minimum standards, they could incur a late enrollment penalty All Medicare beneficiaries (including those who are still working) must have creditable coverage to avoid the late enrollment penalty 19 Creditable Coverage Coverage that is at least as good as Medicare Part D Protects a beneficiary from the Part D penalty Employer or retiree coverage, union coverage, VA coverage: Need proof of coverage to avoid penalty Beneficiaries still working: • Benefits administrator has information about whether the employer coverage is creditable • Beneficiaries should be encouraged to ask the benefits administrator about their creditable coverage status if they have not been notified 20 Late Enrollment Penalty Penalty is 1% of the benchmark (the national base beneficiary premium) for EACH MONTH the beneficiary: • Did not enroll in a Medicare PDP when they were first eligible AND: Had no prescription drug coverage OR Had coverage that was not considered “creditable” OR Had a lapse in creditable coverage of 2 full months (63 days) 21 Late Enrollment Penalty The penalty is added to the premium at the time of enrollment and is a lifetime penalty except for: • A beneficiary under age 65 who is enrolled in Part D and subject to a late enrollment penalty will have the penalty waived at age 65 This waiver mirrors the “clean slate” provided to Medicare enrollees subject to a Part B penalty prior to turning age 65 • Beneficiaries enrolled in Extra Help will have the penalty paid for by Extra Help. If the beneficiary loses her/his Extra Help, she/he would need to pay the Part D penalty 22 Supplement Two (aka Medex Gold) Considered creditable coverage No penalty if beneficiary dis-enrolls and joins a Part D plan within 2 months (63 days) Beneficiary can join a Part D plan during the Open Enrollment Period or if they qualify for a Special Enrollment Period • Dis-enrolling from the plan is NOT in of itself a SEP 23 Part D Costs Must pay monthly premium to the plan • Those with a Medicare Advantage Plan with drug coverage pay a monthly premium to the plan that includes the premium for their health care coverage and their Part D coverage Premiums indexed according to income (same as Part B) Premium can be deducted directly from Social Security check Deductible amount changes yearly and varies from plan to plan 24 Co-payment VS. Co-insurance Co-payments: Set dollar amount that is paid at the pharmacy, e.g., $8 for a 30-day supply at a retail pharmacy. Usually, generic drugs have lower copays than brand drugs Co-insurance: Percentage of the retail cost, e.g., 25% for a 30-day supply. This is the amount the beneficiary would be required to pay 25 2017 Standard Medicare Part D Level Deductible Description Annual deductible paid by the Beneficiary: $400 max Initial Coverage After deductible, beneficiary pays 25% of the drug costs and Medicare pays 75% Initial coverage limit is $3,700 Coverage Gap “Donut Hole” Begins once initial coverage limit is reached Beneficiary pays percentage of the cost for brand name (40%) and generic drugs (51%) Beneficiary’s out of pocket reaches $4,950= catastrophic Catastrophic Begins when catastrophic limit is reached Beneficiary pays 5% of the drug costs and Medicare pays 95% ACA Closing the Coverage Gap The Affordable Care Act reduces the costs to beneficiaries who reach the coverage gap. Effective January 2011 beneficiaries receive discounts on both brand and generic drugs in the gap. These discounts will increase each year until the coverage gap is eliminated in 2020 27 Enrolling into Part D Review plan options • Plan Finder Tool on www.medicare.gov • Determine PDP plan vs. MA-PD plan • Consider cost, coverage, quality, and convenience • Try to avoid drug restrictions using: Step Therapy Prior Authorizations Quantity Limitations Contact plan directly or call 1-800-Medicare • Enrollment can take place on the phone, online, or through a mailed in paper application 28 Extra Help / Low Income Subsidy & Prescription Advantage Extra Help/Low Income Subsidy (LIS) Extra Help is a federal assistance program to help low-income and low-asset Medicare beneficiaries with costs related to Medicare Part D Extra Help subsidizes: • Premiums • Deductibles • Copayments • Coverage Gap “Donut Hole” • Late Enrollment Penalty Does NOT subsidize non-formulary or excluded medications Apply through Social Security Administration 30 2 Levels of Extra Help Full Extra Help • 135% of the Federal Poverty Level (FPL) and asset limits • Full premium assistance with no deductible • Low, capped co-payments Partial Extra Help • • • 150% of the FPL and asset limits Reduced premiums (sliding scale – between 25% -75% assistance dependent upon income) Reduced deductible and 15% co-payments 31 Extra Help Eligibility Resources counted: • Bank accounts (checking, savings, CDs) • Stock, bonds, savings bonds, mutual funds, IRAs • Real estate other than a primary home Resources NOT counted: • Primary home, car • Property one needs for self-support, such as a rental property (rent payments are considered as income) • Burial spaces owned by a beneficiary • Personal belongings 32 Dual-Eligibles Medicare beneficiaries who are also enrolled in Medicaid/MassHealth, Supplemental Security Income (SSI) or a Medicare Savings Program/MassHealth Buy-in) are known as dualeligibles These beneficiaries do not have to apply for Extra Help as they are “deemed eligible” and will be enrolled automatically 33 Extra Help Coverage Period If an individual loses their Extra Help coverage due to no longer meeting the eligibility requirement, the end of the benefit coverage will depend upon when the individual loses their Extra Help coverage • If the Extra Help benefit is lost PRIOR to July: Coverage will end by December 31st of that SAME year • If the Extra Help benefit is lost AFTER July: Coverage will end by December 31st of the FOLLOWING year 34 Prescription Advantage Massachusetts’ State Pharmaceutical Assistance Program (SPAP) Provides secondary coverage for those with Medicare or other “creditable” drug coverage (i.e. retiree plan) Benefits are based on a sliding income scale only – no asset limit! Level of assistance provided is determined by gross income Different income limits for under 65 and 65 and over 35 Benefits for Individuals on Medicare or With Creditable Coverage Helps pay for drugs in the gap (for most members) May help pay all or part of the Medicare prescription drug plan's drug co-pays (All medications must be covered by primary plan) Those in top income category (S5) must pay $200 annual fee for limited benefits Members are provided a SEP (one extra time each year outside of open enrollment to enroll or switch plans) Prescription Advantage does NOT pay the late enrollment penalty fee 36 Benefits for Individuals NOT on Medicare Offers members who do not qualify for Medicare, primary prescription drug coverage Coverage has no monthly premium Depending on income, members will pay a co-pay for prescription drugs and will have an annual out-ofpocket spending limit and quarterly deductible. Once annual out-of-pocket limit is reached, Prescription Advantage will cover drug co-pays for the remainder of the plan year 37 Part D Review Review 1. What is Medicare Part D and how is it offered? 2. Who is eligible? 3. What is creditable coverage? 4. How is the late enrollment penalty calculated? 5. When is the Open Enrollment Period? 6. When does the coverage gap or “donut hole” begin? 7. What programs are available to reduce drug costs? 38