Medicare Part D –
Think “D” for Disaster
The Advocate’s Guide for Organizing
To Improve Medicare Drug Coverage
David Grant and Marie Jobling
This Workshop brought to you by…
California Alliance for Retired Americans
in partnership with the
Medicare Advocacy Collaborative:
- Health Access California
- OWL - California
- Gray Panthers - California
- Congress of California Seniors
This workshop made possible in part by a grant
from The California Wellness Foundation.
Medicare Part D - Time to
“Shout Out” an Alarm
• Everywhere folks are talking about Part D
• Mostly, individuals are trying to figure out if it
will help or hurt them
• We need to raise the “red warning flag”
about dangers as they unfold.
• We need to “Shout Out” that Medicare Part D
has too many problems and must to be
“Reconsidered and Replaced” by Congress
Overview of Today’s Workshop
• Medicare Part D – The Basics
• Medicare Part D – An Advocate’s Perspective
- Does Medicare Part D reduce cost & improve
- Does it simply privatize a major part of Medicare
by turning over drug coverage to an
unregulated army of private drug providers
(while sacrificing the standard benefits
fundamental to Medicare?)
• CARA’s Call to Action! 4
Here is a CLUE…
In 2003, when Medicare Part D was
enacted, the Drug Companies…
• hired 952 lobbyists,
• spent $141 million on
• contributed more than
$30 million to campaigns.
Drug profits rose $182 billion.
Medicare Part D – Working for YOU?
What has been your
experience so far?
Welcome to Medicare Part D
• Coverage began January 1, 2006 for those
• Available for all people with Medicare, but
impacts particular groups differently
• Drug Benefits provided through Private Plans:
– Prescription Drug Plans (PDP’s)
– Medicare Advantage Plans (HMO’s)
• Some Employer and Union Retiree Plans
receive government subsidies to help prevent
them from dropping drug coverage.
How it Works – The Basics
• Monthly premium: minimum of $5.31 to $66.00 per
month (in California)
• Deductible - $250 per year
• Co-payment - $500 maximum based on drug “costs”
up to $2,250
• Donut Hole – No coverage for costs from $2,250 to
$5,100 (but you must keep paying monthly premiums)
• Catastrophic Coverage – After $5,100, it covers 95%
of drug costs
• Co-pays – generally $2 - $5 for each prescription
Part D Plans – The Basics
• Plan Choice – 47 “stand alone” plans in addition to
current HMO plans
• Co-payments, deductibles, pharmacy networks vary
• All mental health drugs, immunosuppressants, AIDS and
cancer drugs are covered
• In other categories, all drugs are not covered
• Medi-Cal will continue to cover drugs not on Part D
formulary for Medi-Cal recipients
• Part D Plans can change formulary at any time
• Customer service – up to each plan
• Appeals - up to each plan
Low Income Subsidy – The Basics
• Three groups “deemed” eligible for full low-income subsidy
were automatically enrolled January 1, 2006.
– Dual eligible (Medicare/Medi-Cal)
– People with SSI
– People enrolled in Medicare Savings Programs (QMB, SLMB & QI-1)
• Those with incomes OVER this level and UNDER 150% of
poverty level are eligible but must apply through Social
Security for this benefit.
– Single – up to $1197 monthly
– Couple – up to $1,604 monthly
– Excess assets may prevent you from getting this benefit.
First, you must apply for the subsidy, then you must enroll
in a Part D Plan.
Enrollment Issues – The Basics
• Dual Eligibles (with both Medicare and Medi-Cal):
– Were automatically enrolled in a Part D plan January 1, 2006
– Beneficiaries must determine if chosen plan covers their drugs and
is accepted at a nearby pharmacy
– Drugs on the Medi-Cal formulary, but not on the Part D formulary,
will continue to be paid for by Medi-Cal
– If you don’t like your plan, you can change as often as monthly
• Medicare Only:
– Can apply for Low-Income Subsidy
– Are being encouraged to pick a Part D plan and enroll by May 15,
– You can only change plans during the annual open enrollment
period, November 15 through December 31.
– Beneficiaries pay a 1% of premium penalty each month if you do
not enroll by May 15, 2006
• Dual eligibles in long term care facilities
No premium, no deductible, no co-pays
• Dual eligibles in the community and those in
Medicare/Medi-Cal Medicare Savings
Programs (QMB, SLMB, QI-1) or SSI/SSDI
– No premium or deductible
– Co-pays: $1 to $5 (per prescription)
– No “donut hole” of non-coverage
– No co-pay after $5,100 limit of total cost of
What did the Governor just do?
• Authorized the State to pay for
medications for those Medi-Medi’s who
are unable to get their drugs paid for by
• This coverage was only for the period
January 12 through January 17, 2006.
• Sponsors of this workshop are part of
efforts with the Legislature to get this
safety net coverage continued.
Low-income Medicare Beneficiaries
Not on Medi-Cal
• A two–step process
• Apply for a “low-income subsidy” if income
and assets are low
– Single – up to $1,197 monthly
– Couple – up to $1,604 monthly
– Assets limits vary
• Choose a prescription drug plan before
May 15, 2006 and enroll – your subsidy
should be automatically applied.
Medicare Beneficiaries with
Existing Drug Coverage
• Watch out for a letter saying if your current coverage is
at least as good as Medicare Part D – the term used is
“creditable” – not all plans are “creditable”.
• These letters could come from:
– Existing Medi-gap policies
– Medicare Advantage HMO’s
– VA and TRICARE
– Union and Corporate Retiree Benefit Programs
• Covered individuals can still sign up for a Part D plan,
but may lose their regular drug AND health coverage
(More on this in the “red flag” section to follow).
• If you have not yet received a letter, or are confused, call
your health plan. 15
Where You Can Go For Help
• Health Insurance Counseling and Advocacy
Program (HICAP): Call 1-800-434-0222 to reach
your local HICAP or go to www.calmedicare.org.
• Social Security: 1-800-772-1213 or go to
• Center for Medicare and Medicaid Services
(CMS): Call 1-800-MEDICARE or go to
• Your CARA Part D Toolkit and at
• Remember, most other sources of information
are trying to sell you something
Preparing Advocates to
“Raise the Red Flag”
• Presentations like what you just saw are
happening all over the state.
• We need to tell the other side of the story - that
Medicare Part D = Disaster
• We need to be “on guard” against the numerous
dangerous features of Medicare Part D
• Let’s count the ways that Part D is a Disaster…
#1 Enrollment =
Chaos and Confusion
• Enrollment is being pushed too quickly
• Enrollment decisions are too complex
• Too few resources are available to help
• Too little information is available in multiple
languages and in formats easy for consumers to
#2 Medi-Cal Enrollment
• On January 1, over 1 million Medi-Cal
beneficiaries were automatically switched to
Medicare Part D. Horror stories include:
– Pharmacies can’t access computer system to process
claims. When they do, data is not accurate.
– Phone lines for Medicare and the private plans totally
– High co-payments and totally different formularies
mean beneficiaries leave without lifesaving drugs.
– California and other states must step in to bail out the
#3 - Late Enrollment Penalty
It Lasts A Lifetime!
• Beneficiaries not automatically enrolled have until May
15, 2006 to chose a plan.
• After May 15, 2006, if you have not chosen a plan, you
will pay 1% of the average area premium PER
MONTH…FOR LIFE as your penalty!
• Example – say the average monthly premium in your
area is $50 a month. If you wait 12 months to sign up,
your premium would be $50 + $6 (12% of $50) every
month or an additional $72 per year forever! If the rate
goes up, your penalty goes up proportionately. If you
wait longer, the penalty just keeps growing.
#4 -Retirees with Current
Drug Coverage - Beware!
• Retirees with current drug coverage through a
retiree or employer health plan could lose
ALL RETIREE HEALTH COVERAGE
(not just drug coverage) by signing up for
Medicare Part D.
• Many letters to retirees regarding “creditable
coverage” do not make this pitfall clear.
• If you mistakenly join Part D, you and your family
members covered by the retiree plan may not be
able to get the coverage back.
#5 The “Donut Hole” – Not
Such A Sweet Deal
• You get no coverage for costs between $2,250
• You keep paying premiums but get no benefit
• It is unclear what drug costs will get counted
toward the $2,250 (i.e. all out of pocket costs or
only those that show up in the Medicare
• Many factors will make it difficult for individuals
to reach the other side of the hole ($5,100) and
to start getting benefits again.
#6 Choosing a Plan?
Welcome to the Valley of Tiers
• Already complex decisions related to cost and coverage are
now more difficult because of choices within plans.
• Many plans are organized into different “tiers” based on
whether you are using generic, preferred, non-preferred, or
specialty drugs – Higher tier = Higher cost.
• Plans may force you to try cheaper drugs, perhaps with bad
side effects, before you can get the “higher tier” drug they offer.
• In addition, plans have different costs depending on whether
you go to a preferred, non-preferred or off-plan pharmacy.
• For example, you could have as 12 different combinations of
premium and co-payment amounts and the possibility of even
more confusion if all your drugs are not covered in one plan
• End result – it is virtually impossible to make an informed
DANGER – With Part D,
You Could Pay MORE!
• Annual Premium $ 445
• Annual Deductible $ 250
• Co-payments (varies) $ 155 - $500
• Donut hole coverage gap $ 2,850
• Additional charges based on
whether drug is covered,
pharmacy is in network, etc. Unknown
• How does this compare with what you pay now?
• How does it compare if you simply bought your drugs
from Canada or from places like Costco?
• How would it compare if the government could negotiate
lower drug prices, like those for the VA? 24
#7-12 More Dangers on
the Road to Part D
• Persons in special programs for HIV/AIDS, disabled
children, other groups face even more confusion.
• Many beneficiaries will find this new “benefit” actually
reduces assistance from other programs like food stamps.
• Beneficiaries in long term care facilities nursing home left to
fend for themselves in terms of making choices.
• Each plan has its own grievance and appeal process.
Doctors and patients are forced to deal with multiple,
differing appeal processes to get needed drugs.
• Beneficiaries will be trapped in plans even if drug
• Drug plans have little or no oversight from government.
#13 Unlucky California Will
Lose Nearly $420 Million
• The federal government will “clawback” $1.4
billion of the money formerly in Medi-Cal.
• Experts estimate that over-all, California will lose
more than $250 million in the first year alone.
• Since the State is no longer buying drugs
directly, it potentially loses all the discounts and
rebates, an estimated loss of $170 million more.
America Can Do Better
After all that you’ve heard, what do YOU
Will Medicare Part D reduce cost, improve
access, and increase your ability to live a
Together We Can Get A Real
Prescription Drug Benefit
• CARA has a plan for how to “Reconsider
and Reform” Medicare Part D,
• Here are at least 4 Ways you can help.
– CIRCULATE & ADVOCATE
– SHOUT OUT AND TELL OUR
– ORGANIZE & MOBILIZE
At the national level…
CIRCULATE & ADVOCATE
• Take the CARA Medicare Petition and get everyone you
know to sign it.
• Tell people about the problems with Part D and urge them
to join the fight for a Real Drug Plan.
• Join the CARA Action Team (CAT) and participate in
meetings in your area. Call 877-223-6107(toll free) for the
Team in your area.
• Organize to hold your representative accountable for real
relief from high drug costs
– Support HR 3861, the Medicare Informed Choice Act (Stark,
Schakowsky) to extend the deadline
– Support HR 752 (Stark, Berry) the Medicare Prescription Drug
Savings and Choice Act, to create a uniform drug benefit in
Medicare and require that Medicare negotiate for the best
CALL YOUR CONGRESSIONAL
• Dial the House & Senate switchboard
• Ask the operator for the first representative you want to reach
• When connected: “Hello, I live in your district and I’m calling to
ask you to:
– Support HR 3861, the Medicare Informed Choice Act to
extend the enrollment period and protect against bad choices.
– Support HR 752, the Medicare Prescription Drug Savings and
Choice Act, to create a uniform drug benefit in Medicare and
require Medicare negotiate for the best prices
– Reconsider & replace Medicare Part D with real reform that
saves Medicare and provides relief from high drug prices.”
• Repeat until you have called all 3 of your representatives!
• Call today, call often, get your friends to call too!
• Be part of a team to follow-up on today’s
– Take what you’ve learned today back to other
groups you’re involved with
– Attend local Medicare Part D trainings and
workshops to help “raise the red flag” about
problems with Part D.
– Write a “Letter to the Editor” about the pain
and confusion Medicare Part D is causing
(see information in your toolkit).
“SHOUT OUT” AND TELL
• Share your experiences and those of people you know
– “Tell Your Story” form is in the Toolkit to help make
the issues real to the media and local policymakers.
– Tell your story today!
– Collect stories from others tomorrow
– Host a local “Shout Out” to get the press to cover the
“dangerous side” of Part D.
• The Tool Kit can help guide you with these and other
• Your local CAT Team can help you organize a “shout-out
and media” in your area.
At the state level…
ORGANIZE & MOBILIZE
• Support State legislation being developed for the 3rd year
of the statewide OuRx Coalition - Year 3? – Part D!
– Establish a “wrap-around” benefit to protect “Medi-
– Provide assistance with co-payments and deductibles
– Increase funding for consumer counseling and support
– Demand oversight and regulation of drug plans
• Participate in state hearings on Medicare Part D
• Coordinate “shout-outs” and legislative visits through the
local CAT’s to participate in your area.
REACH OUT TO
• CARA member groups
• Local senior and disability advocacy groups
• Pharmacists and their organizations
• Non-profit housing providers to seniors and
persons with disabilities
• Nursing Homes & Residential Care Facilities
• Legal Services Programs
• Paid and family care givers
CALL TO ACTION
• Now it’s time to move into action
• Join us as we plan the next steps in your
• And to end on an up-beat note, join us in
song as we prepare to march and sing our
way into the history books.
Stay Involved - Join the CARA
Action Team (CAT)
The Alameda County CAT meets
every 2nd Monday, at 10:00 a.m.
South Berkeley Senior Center
Ellis at Ashby in Berkeley
For more information, contact
Jim Forsyth at 510-581-5169.