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Medicare Prescription Drug Coverage

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					Medicare Prescription
   Drug Coverage
             Medicare Prescription
                Drug Coverage
• Referred to as Medicare Part D
• Available to everyone with Medicare
• Drug plans approved by Medicare
    – Run by private companies
• Must be enrolled in a plan to get coverage
• Coverage provided through
    – Medicare Prescription Drug Plans (PDPs)
    – Medicare Advantage with Prescription Drugs (MA-PDs)




06/08/2010      Understanding Medicare Prescription Drug Coverage   2
  Part D Eligibility Requirements

• To be eligible to join a Prescription Drug
  Plan
 – You must have Medicare Part A and/or Part B
• To be eligible to join Medicare Advantage
  plan with drug coverage
 – You must have Part A and Part B
 – You must live in plan’s service area
 – You cannot be incarcerated
 – You must be enrolled in a plan


06/08/2010    Understanding Medicare Prescription Drug Coverage   3
             Covered Drugs
• Prescription brand-name and generic
  drugs
• Approved by FDA
• Used and sold in U.S.
• Used for medically-accepted indications
• Includes drugs, biological products, and
  insulin
 – Supplies associated with injection or
   inhalation



             Medicare Drug Coverage Under Part A, Part B and Part
06/01/2010                                                          4
                                     D
             Required Coverage
• “All” drugs in 6 categories must be
  covered
    – Cancer medications
    – HIV/AIDS treatments
    – Antidepressants
    – Antipsychotic medications
    – Anticonvulsive treatments for
      epilepsy and other conditions
    – Immunosuppressants

06/08/2010     Understanding Medicare Prescription Drug Coverage   5
                             Vaccines
• All Part D drug plans must cover:
  – All commercially available vaccines
             • e.g., shingles vaccine
  Note: Except those covered under Part
   B
             • e.g., flu shot
• Contact drug plan for more
  information


                     Medicare Drug Coverage Under Part A, Part B and Part
06/01/2010                                                                  6
                                             D
Drugs Not Covered by Part D
• Excluded by law from Medicare coverage
  –   Anorexia, weight loss or weight gain drugs
  –   Erectile dysfunction drugs
  –   Fertility drugs
  –   Drugs for cosmetic or lifestyle purposes
             – e.g., hair growth
  – Drugs for symptomatic relief of coughs and
    colds
  – Prescription vitamin and mineral products
             – except prenatal vitamins and fluoride preparations
  – Non-prescription drugs
  – Barbiturates and benzodiazepines
             – To be covered in 2013

                        Medicare Drug Coverage Under Part A, Part B and Part
06/01/2010                                                                     7
                                                D
Drugs Not Covered by Part D                                       (continued)



 • Medicare Part A or Part B covered
   drugs
   – Unless you don’t meet Part A or B
     coverage requirements
 • Plan may choose to cover excluded
   drugs
   – At their own cost, or
   – Share the cost with members

 06/08/2010   Understanding Medicare Prescription Drug Coverage          8
      Access to Covered Drugs

• Plans must cover at least two drugs in each
  category
• Coverage and rules vary by plan
• Plans can manage access to drug coverage
  through
 –   Formularies (list of covered drugs)
 –   Prior authorization (doctor requests before service)
 –   Step therapy (type of prior authorization)
 –   Quantity limits (limits quantity for period of time)




06/08/2010        Understanding Medicare Prescription Drug Coverage   9
                         Formulary
  • A list of prescription drugs covered by the plan
  • May have “tiers” that cost different amounts

 Example of Tiers (Plans can form tiers in different ways)
                                                Prescription
  Tier               You Pay                   Drugs Covered

     1         Lowest copayment        Most generics
               Medium
     2                                 Preferred, brand-name
               copayment
               Highest
     3                                 Non-preferred, brand-name
               copayment
               Highest
                                            Unique, very high-cost
Specialty      copayment or
  06/08/2010
               coinsurance Medicare Prescription Drug Coverage
                     Understanding                                   10
             Prior Authorization
• Doctor must contact plan for prior
  authorization
  – Before prescription will be covered
  – Must show medical necessity for that
    particular drug

• Ask plan for prior authorization
  requirements
  – Process for requests may vary by plan

06/08/2010     Understanding Medicare Prescription Drug Coverage   11
              Step Therapy
  • Type of prior authorization
  • Person must try a similar, less-
    expensive drug that has been
    proven effective
  • Doctor can request an exception if
     – Tried similar, less expensive drug and it
       didn’t work, or
     – Step-therapy drug is medically
       necessary

06/08/2010     Understanding Medicare Prescription Drug Coverage   12
             Quantity Limits

• Plans may limit the quantity of drugs they
  cover
 – Over a certain period of time
 – For reasons of safety and/or cost




06/08/2010    Understanding Medicare Prescription Drug Coverage   13
If Your Prescription Changes
  • Get up-to-date information from plan
     – By phone or on plan’s website
  • Give doctor copy of plan’s formulary
  • If the new drug is not on plan’s
    formulary
     – Can request a coverage determination
       from plan
     – May have to pay full price if plan still
       won’t cover drug

06/08/2010     Understanding Medicare Prescription Drug Coverage   14
             Formulary Changes
• Plans may change categories and classes
 – Only at beginning of each plan year
   (Plan year is January through December)
 – May make maintenance changes during year
• Plan usually must notify you 60 days before
  changes
 – May be able to use your drug until end of calendar year
 – May ask for exception if other drugs don’t work
• Plans may remove drugs withdrawn from market
 – By the manufacturer or the Food and Drug
   Administration, without 60 day notification




06/08/2010      Understanding Medicare Prescription Drug Coverage   15
              Medicare Drug Plan
• Can be flexible in benefit design
• Must offer at least a standard level of
  coverage
• May offer enhanced benefits
• Benefits & costs can change from year to
  year
 – Monthly premium varies by plan
         • Some plans have no premium
 – Possible yearly deductible
         • No more than $320 in 2012
 – Copayments or coinsurance
         • May depend on how much spent that year

 06/08/2010        Understanding Medicare Prescription Drug Coverage   16
2012 Standard Coverage and Cost

  Benefit        Coverage
                                   Plan Pays        Beneficiary Pays
  Stage           Range

Annual
                  $0-$320         0%        $0       100%       $320
Deductible


Initial          $320-$2930
                                 75%     $1957.50    25%       $652.50
Coverage        (Next $2610)



Coverage        $2930-6657.50    50% - Brand-name    50% - Brand-name
Gap            (Next $3727.50)    14% - Generics       86% - Generic



Catastrophic                               No                   No
               $6657.50 and up   95%                  5%
Coverage                                 Maximum              Maximum
      Monthly Premiums
• Starting January 1, 2011 part D
  monthly premiums may be higher
  based on income
  – Includes PDP and MA-PD plans
• If income is above
  – $85,000 filing individual tax return
  – $170,000 filing a joint tax return
  Additional monthly adjustments will be
    charged in addition to part D premiums
• SSA will be contacting those who have
  to pay higher premiums in November
              True Out-of-Pocket Costs
                      (TrOOP)
 TrOOP is the amount of money (out-of-pocket) that
 can be used to reach catastrophic coverage
• Payment sources that count
  – Plan member
  – Family members or other individuals
  – Illinois Cares Rx payments
  – SSA “Extra Help” (low-income subsidy)
  – Charities
       • Not if established/controlled by current/former
         employer or union
   – Indian Health Services and AIDS Drug Assistance
      Programs
   – Part D manufacturer discount for covered Brand-name
     drugs during coverage gap
 06/08/2010        Understanding Medicare Prescription Drug Coverage   19
       Out-of-Pocket Costs that
            Do Not Count
• Payment sources that do not count
   – Monthly drug premium payments
   – Group health plans
       • Including employer or union retiree coverage
   – Government-funded programs including
     TRICARE and VA
   – Manufacturer Patient Assistance Programs
   – Other third-party payment arrangements
   – Part D plan discounts for covered drugs
     during coverage gap
06/08/2010      Understanding Medicare Prescription Drug Coverage   20
             Coverage Gap Discount
• If you reach the coverage gap in 2012
  you may receive discounts on both
  brand-name and generic drugs
     – 50% discount on brand-name prescription
       drugs in 2012
     – 14% discount on generic drugs in 2012
• Additional savings in coverage gap each
  year
  – Gap to be closed in 2020


06/08/2010       Understanding Medicare Prescription Drug Coverage   21
Cost Sharing for Brand-name Drugs in the
Medicare Part D Coverage Gap, 2010-2020
  Cost Sharing for Generic Drugs in the
Medicare Part D Coverage Gap, 2010-2020
  When you can Join or Switch
 Medicare Prescription Drug Plans
Initial Coverage         • 7 month period
Election Period          • Starts 3 months before
(IEP)                      month of eligibility

Annual Open
Enrollment               • October 15 – December 7
Period (AOEP)




  06/08/2010   Understanding Medicare Prescription Drug Coverage   24
      When You Can Join or Switch
     Medicare Prescription Drug Plans
                             (continued)


Medicare      January 1–February 14, you can
Advantage     leave an MA plan and switch to
Disenrollment Original Medicare.
Period (MADP)
                    If you make this change, you
                    may also join a Medicare
                    Prescription Drug Plan to add
                    drug coverage. Coverage begins
                    the first of the month after the
                    plan gets enrollment form.

  06/08/2010   Understanding Medicare Prescription Drug Coverage   25
     When you can Join or Switch
    Medicare Prescription Drug Plans
                       (continued)


5-star         December 8, 2011 – December 31, 2012
Special
Enrollment      Beneficiaries will have a one-time
Period          enrollment into any 5-star plan. This
(5-star SEP)    will include both the Stand-alone
                prescription drug plan (PDP) or
                Medicare Advantage with drug
                coverage (MA-PD).
      When you can Join or Switch
     Medicare Prescription Drug Plans
                         (continued)


Special         • You permanently move out of your
Enrollment         plan’s service area
Periods (SEP)   • You lose other creditable Rx
                   coverage
                • You weren’t adequately informed
                   your other coverage was not
                   creditable/was reduced and no
                   longer creditable
                • You enter, live in or leave a long-
                   term care facility
                • You have a continuous SEP if you
                   qualify for Extra Help
  06/08/2010
                • Or in exceptional circumstances
                Understanding Medicare Prescription Drug Coverage 27
     Creditable Drug Coverage
  • If you have other drug coverage
     – It may or may not be creditable
     – If creditable, it meets or exceeds
       Medicare’s minimum standards
  • With creditable coverage
     – Will not have to pay a late-enrollment
       penalty
  • Plans inform yearly about whether
    creditable
     – e.g.; employer group plans, retiree plans,
       VA, TRICARE and FEHB
06/08/2010      Understanding Medicare Prescription Drug Coverage   28
             Penalty Calculation
              Late Enrollment
  •    National base beneficiary premium
      – $30.23 in 2012
      – Can change each year
  • Pay 1% (of $30.23 in 2012) for every
    month eligible but not enrolled
      – Unless person has creditable coverage
      – Penalty added to premium payment



06/08/2010     Understanding Medicare Prescription Drug Coverage   29
     Extra Help with Drug Cost
• Sometimes called the Low-Income Subsidy
  (LIS)
• For people with lowest income and resources
 – Pay no premiums or deductibles & small or no
   copayments
• Those with slightly higher income and
  resources
 – Pay reduced deductible and a little more out of pocket
• No coverage gap for people who qualify for LIS




06/08/2010     Understanding Medicare Prescription Drug Coverage   30
       Qualifying for Extra Help
 Some will automatically qualify if they
  have Medicare and;
   – Get full Medicaid benefits
   – Supplemental Security Income (SSI)
   – Medicare Savings Program
             • Medicaid help with some Medicare cost
• All others must apply with Social
  Security
   – Online at www.socialsecurity.gov, or
   – Call 1-800-772-1213 (TTY 1-800-325-0778)
             • Ask for “Application for Help with Medicare
               Prescription Drug Plan Costs” (SSA-1020)

06/08/2010             Understanding Medicare Prescription Drug Coverage   31
          Income and Resource
                 Limits
        Income
              – Below 150% Federal poverty level
                • $16,335 per year for a single person* or
  2011
 amounts
                • $22,065 per year for a married couple*
                • Based on family size
        Resources
 2011         – Up to $12,640 (individual)
amounts
              – Up to $25,260 (married couple)
                • Includes $1,500/person funeral or burial
                  expenses
                • Counts savings and stocks
                • Does not count home you live in

 *Higher amounts for Alaska and Hawaii
 06/08/2010          Understanding Medicare Prescription Drug Coverage   32
 Auto- and Facilitated Enrollment
• CMS identifies and enrolls people each month
 – Randomly assigned to plans
   • Premiums at or below regional low-income premium
     subsidy amount
   • May join MA plan meeting special needs
• If you are already enrolled in an MA plan
 – You’ll be enrolled in the same plan with Rx
   coverage (MA-PD)
 – If offered by your current plan



 06/08/2010    Understanding Medicare Prescription Drug Coverage   33
  Medicare and Full Medicaid
• You are auto-enrolled in a plan unless
 – You are already in a Part D plan
 – You choose and join a plan on your own
 – You call the plan or 1-800-MEDICARE to opt out


• You are covered 1st month you are covered by
 – Medicaid and are entitled to Medicare


• Will get auto-enrollment letter on yellow paper

• You have a continuous Special Enrollment Period

06/08/2010      Understanding Medicare Prescription Drug Coverage   34
Others Qualified for Extra Help
• Facilitated into a plan unless
 –   You already are in a Part D plan
 –   You choose and join own plan
 –   You’re enrolled in employer/union plan receiving subsidy
 –   You call the plan or 1-800-MEDICARE to opt out

• Coverage is effective 2 months after CMS notifies

• Will get facilitated enrollment letter on green
  paper

• Have continuous Special Enrollment Period



06/08/2010        Understanding Medicare Prescription Drug Coverage   35
     People New to Extra Help
• You can apply for Extra Help any time
 – If denied, can reapply if circumstances change

• If in a Medicare drug plan and later
  qualify
 – Plan is notified you qualify for Extra Help
 – Plan refunds costs back to effective date of
   Extra Help
   • Deductibles/Premiums
   • Cost-sharing assistance


06/08/2010    Understanding Medicare Prescription Drug Coverage   36
             Enrollment Notices
• CMS notifies people of enrollment in a
  PDP
   – Auto-enrollment letter on yellow paper
   – Facilitated enrollment letter on green
     paper
       • Denotes either full or partial subsidy
       • Includes list of area plans at/below regional
         low-income premium subsidy amount
• MA plan sends notice if enrollment in
  MA-PD

06/08/2010        Understanding Medicare Prescription Drug Coverage   37
Re-establishing Eligibility for People
    Who Automatically Qualify
• CMS re-establishes eligibility in the Fall
 – For next calendar year
 – If you no longer automatically qualify
  • CMS sends letter in September on gray
    paper
       – Includes SSA application
 – If you automatically qualify & your
   copayment changed
  • CMS sends letter In early October on orange
    paper


06/08/2010        Understanding Medicare Prescription Drug Coverage   38
                Extra Help – What You Pay
                               Group 1                      Group 2                 Group 3
                              100% FPL                   100-135% FPL            135-150% FPL


                                                                                 Sliding scale
   Premium                        $0*                            $0                based on
                                                                                    income
   Yearly
 deductible                       $0*                            $0                   $60
 $310/year
Coinsurance
up to $4,700               $1.10/$3.30                   $2.60/$6.50              Up to 15%
out of pocket                 copay                         copay                coinsurance

Catastrophic                                                                     $2.60/$6.50
 coverage                          $0                            $0                 copay
*If you join a basic plan with a premium at or below the regional low-income premium subsidy amount.

   06/08/2010                Understanding Medicare Prescription Drug Coverage                39
                           LI-NET

• Limited Income Newly Eligible Transition
  Program (LI-NET)
  – Combined auto-enrollment and Point-of-Sale Facilitated
    Enrollment
    • For full duals and SSI-only beneficiaries


• Provides Part D coverage for all uncovered
  – Full duals and SSI-only beneficiaries retroactively
  – LIS eligible beneficiaries on a current basis




06/08/2010      Understanding Medicare Prescription Drug Coverage   40
     LI-NET Coverage and Enrollment

• Coverage
  – Full Dual/SSI-only up to 36 months
  – Partial Dual/LIS Applicants up to 30 days
  – Unconfirmed up to 7 days

• Enrolled in LI NET for temporary coverage
  – In Standard PDP for future coverage

• Open Formulary, No Prior Authorization, No
  Pharmacy Restrictions
• Standard PDP Rights for Enrollees, Eligibility
  Reviews for Non-Enrollees

06/08/2010      Understanding Medicare Prescription Drug Coverage   41
      Access to LI-Net
• Three ways to access the LI-NET
  program
 – Auto: Enrollment by CMS
 – Point of Service (POS)
 – Submitting a receipt for drugs already
   paid out-of-pocket
   • During eligible periods
State Pharmacy Assistant
     Program (SPAP)

• In Illinois, SPAP is Illinois Cares Rx
• Two types of coverage
  – Illinois Cares Rx Basic
     • formerly Pharmaceutical Assistance Program
  – Illinois Cares Rx Plus
     • formerly SeniorCare
• Can also assist individuals not on
  Medicare
Illinois Cares Rx for those on Medicare
• Will assist with some cost sharing with a
  coordinating plan
  – Deductible up to $320 of total drug cost
  – Initial coverage up to $2,930 of total drug
    cost
  – Coverage gap from $2,930- $6,657.50 of total
    drug cost
  – Catastrophic coverage begins at $6,657.50 –
    provides NO wrap coverage
 NOTE: Applicants must apply for LIS through Social Security at least once and
 follow instructions from SSA if qualify for any portion of assistance
 State Pharmacy Assistance Program
Medicare and Illinois Cares Rx
  – Provides wrap-around coverage
  – Must be enrolled in a coordinating PDP or MA-PD plan
    in order to get the wrap
  – Pays the premium for a coordinating Part D plan, or
  – Expands greatly the population served by the state of
    Illinois
• Costs incurred by IL Cares Rx can count toward
  out-of-pocket limit
• Applications can be filed on line at
  www.cbrx.il.gov/
Medicare and Illinois Cares Rx
• Must meet annual income requirement of
    – $21,780* for a household of 1
    – $29,420* for a household of 2
    – $37,060* for a household of 3
• Must follow Part D plan rules for coverage
• Must Apply for SSA “Extra Help”
    – At least once, even if you do not meet
      requirements

* Income amounts are based on an application filed in 2010 using 2009 income
       Illinois Cares Rx
• For individuals who need drug
  assistance but are not on
  Medicare will have to
  – Meet income requirements
    • For Plus or Basic coverage
  – Be 65yrs or older; or
  – Persons with disability
  – Follow Illinois Cares Rx formulary list
         Illinois Cares Rx Basic
 •       Must be without Medicare coverage and either
     –     Age 65 or older, or
     –     A person with disabilities
 •       Annual income of no more than
      – $21,780* for a household of 1
      – $29,420* for a household of 2
      – $37,060* for a household of 3


IL Cares Rx Basic Drug Coverage for 11 Disease Categories
Alzheimer’s Disease                       Arthritis
Cancer                                    Diabetes
Glaucoma                                  Heart and blood pressure problems
HIV/AIDS (if not eligible for             Multiple Sclerosis
Medicare)
Osteoporosis                              Parkinson’s Disease
Lung Disease and smoking related illnesses
* Income amounts are based on an application filed in 2010 using 2009 income
       Illinois Cares Rx Plus
• Illinois Cares Rx Plus provides
  coverage for almost all prescription
  drugs
• Must be a citizen or qualified non-
  citizen 65 or older without Medicare
• Annual income of no more than
  $21,780* (single) or $29,420* (married
  couple)
* Income amounts are based on an application filed in 2010 using 2009 income
Things to Consider Before Joining a Plan

   Important questions to ask
     – Do you have other current health insurance
       coverage?
     – What about current prescription drug coverage?
     – Is any prescription drug coverage you might have
       as good as Medicare drug coverage?
     – How does your current coverage work with
       Medicare?
     – Could joining a plan affect your current coverage?
     – Could joining a plan affect a family member’s
       coverage?




06/08/2010       Understanding Medicare Prescription Drug Coverage   50
       Annual Notice of Change
 All Part D plans send to all members by
  September 30
 – May arrive with Evidence of Coverage
 Will include information for upcoming
  year
 – Summary of Benefits
 – Formulary
 – Changes
   • New premium
   • Cost sharing – copayments and coinsurance
   • Other
06/08/2010   Understanding Medicare Prescription Drug Coverage   51
         Residents of Long-Term
             Care Facilities
   Get drugs from pharmacy chosen by
    facility
   Will have convenient access
   Can change plans at any time
   With Medicare and full Medicaid
    benefits
     – Have no deductible and no copayments




06/08/2010    Understanding Medicare Prescription Drug Coverage   52
        Coverage Determination

 Initial decision by plan
  – Benefits a member is entitled to
    receive
  – Amount member is required to pay for
    a benefit
 May be standard
 May be expedited
  – Life or health seriously jeopardized

06/08/2010   Understanding Medicare Prescription Drug Coverage   53
   Part D Exception Requests
   Two types of exceptions
     – Tiers
       • e.g., getting Tier 2 drug at Tier 1 cost
     – Formulary
       • Drug not on plan’s formulary or
       • Access requirements
   Requests can be made only by you, your
    appointed representative, or the prescriber
   Requires supporting statement from
    physician



                  Medicare Drug Coverage Under Part A, Part B and Part
06/01/2010                                                               54
                                          D
             Approved Exceptions
   Exception valid for refills for
    remainder of year if
     – Person remains enrolled in the plan and
     – Physician continues to prescribe drug,
       and
     – Drug stays safe to treat person’s
       condition
   Plan may extend coverage into new
    plan year
     – If not, must send written notice
       – At least 60 days before plan year ends

06/08/2010      Understanding Medicare Prescription Drug Coverage   55
Coverage Determination Timeframe

  Plan must notify of coverage
   determination
  – Standard request within 72 hours
  – Expedited request within 24 hours
  – Exception involved
      – Time clock starts when plan receives physician statement
  – Missed timeframe
      – Goes to independent review entity (IRE)
         – MAXIMUS – www.medicarepartdappeals.com
      – Skip 1st level of appeal




 06/08/2010        Understanding Medicare Prescription Drug Coverage   56
             Requesting Appeals
   In general, appeal requests must be
    written
     – Plans must accept expedited requests
       orally
   An appeal can be requested by
     – Plan member
     – Appointed representative
   5 levels of appeals



06/08/2010      Understanding Medicare Prescription Drug Coverage   57
             Resources
• Illinois Senior Health Insurance Program
  – www.insurance.illinois.gov
  – (800) 548-9034

• Medicare
  – www.medicare.gov
  – (800) 633-4227
  – Medicare and You 2012 handbook

• Social Security Administration
  – www.socialsecurity.gov

				
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