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
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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.