ppa 419 – aging services administration lecture 5c - medicare prescription drug, improvement, and...

PPA 419 – Aging PPA 419 – Aging Services AdministrationServices Administration

Lecture 5c - Lecture 5c - Medicare Prescription Medicare Prescription Drug, Improvement, and Drug, Improvement, and

Modernization Act of 2003 Modernization Act of 2003

Prescription Drug Savings Prescription Drug Savings for Seniorsfor Seniors

For the first time in Medicare's For the first time in Medicare's history, a prescription drug history, a prescription drug benefit will be offered to all 40 benefit will be offered to all 40 million seniors and disabled million seniors and disabled Americans in Medicare to help Americans in Medicare to help them afford the cost of their them afford the cost of their medicines. medicines.

Prescription Drug Savings Prescription Drug Savings for Seniorsfor Seniors Beginning in 2004, seniors could save 10-Beginning in 2004, seniors could save 10-

25% off the cost of most medicines through 25% off the cost of most medicines through a Medicare-approved drug discount card. a Medicare-approved drug discount card. Seniors would be able to take the card to Seniors would be able to take the card to their local pharmacy and receive the their local pharmacy and receive the discount. Since the typical senior spends discount. Since the typical senior spends $1,285 annually on his or her medicines, $1,285 annually on his or her medicines, the card could save a senior who lacks the card could save a senior who lacks drug coverage as much as $300 annually. drug coverage as much as $300 annually. The card would provide savings until the The card would provide savings until the full drug benefit goes into effect. full drug benefit goes into effect.

Prescription Drug Savings Prescription Drug Savings for Seniorsfor Seniors Beginning in 2006, seniors without Beginning in 2006, seniors without

coverage would be able to join a Medicare-coverage would be able to join a Medicare-approved plan that would cut their yearly approved plan that would cut their yearly drug costs roughly in half, in exchange for drug costs roughly in half, in exchange for a $35 monthly premium. In many cases, a $35 monthly premium. In many cases, the savings will be even greater. the savings will be even greater. Seniors with no drug coverage and monthly Seniors with no drug coverage and monthly

drug costs of $200 would save more than drug costs of $200 would save more than $1,700 on drug costs each year. $1,700 on drug costs each year.

Seniors with no drug coverage and monthly Seniors with no drug coverage and monthly drug costs of $800 would save nearly $5,900 on drug costs of $800 would save nearly $5,900 on drug costs each year. drug costs each year.

Seniors would be protected again high out-of-Seniors would be protected again high out-of-pocket costs with Medicare covering 95% of pocket costs with Medicare covering 95% of drug costs over $3,600 per year. drug costs over $3,600 per year.

Prescription Drug Savings Prescription Drug Savings for Seniorsfor Seniors Low-income seniors will receive additional help Low-income seniors will receive additional help

paying for their medicines. paying for their medicines. A $600 annual subsidy would be added to their drug A $600 annual subsidy would be added to their drug

discount card. discount card. There would be no additional premium, no deductible There would be no additional premium, no deductible

and low co-payments ($2 for generic or $5 for brand-and low co-payments ($2 for generic or $5 for brand-name drugs) for seniors with limited savings and name drugs) for seniors with limited savings and incomes at or below 135% of poverty (individuals with incomes at or below 135% of poverty (individuals with yearly incomes under $12,123 and senior couples yearly incomes under $12,123 and senior couples under $16,362). under $16,362).

There would be reduced premium, a $50 deductible, There would be reduced premium, a $50 deductible, and 15% co-insurance (85% of their drug costs would and 15% co-insurance (85% of their drug costs would be covered) for seniors with limited savings and be covered) for seniors with limited savings and incomes between 135% and 150% of the federal incomes between 135% and 150% of the federal poverty level (individuals with yearly incomes under poverty level (individuals with yearly incomes under $13, 470 and senior couples under $18,180). $13, 470 and senior couples under $18,180).

Prescription Drug Savings Prescription Drug Savings for Seniorsfor Seniors All seniors will save from steps to All seniors will save from steps to

bring safe, lower cost generic drugs bring safe, lower cost generic drugs to market sooner. The President took to market sooner. The President took steps earlier this year to bring steps earlier this year to bring generic versions of drugs to market generic versions of drugs to market sooner, and this legislation will sooner, and this legislation will strengthen those efforts that are strengthen those efforts that are estimated to save American estimated to save American consumers about $35 billion over the consumers about $35 billion over the next 10 years. next 10 years.

More Choices-Better Benefits-More Choices-Better Benefits-And the Choice to Stay with the And the Choice to Stay with the Coverage You Have TodayCoverage You Have Today Seniors will have more choices Seniors will have more choices

in health care-including the in health care-including the same kinds of choices that same kinds of choices that members of Congress and other members of Congress and other federal employees enjoy today. federal employees enjoy today. Seniors will be able to choose Seniors will be able to choose the health care plan that best fits the health care plan that best fits their needs-instead of having their needs-instead of having that choice made by the that choice made by the government. government.

More Choices-Better Benefits-More Choices-Better Benefits-And the Choice to Stay with the And the Choice to Stay with the Coverage You Have TodayCoverage You Have Today Seniors can choose to stay in traditional Seniors can choose to stay in traditional

Medicare and still get prescription drug Medicare and still get prescription drug coverage. Or, they can choose a new coverage. Or, they can choose a new Medicare-approved private plan where the Medicare-approved private plan where the drug benefit is integrated into broader drug benefit is integrated into broader medical coverage, including disease medical coverage, including disease management programs and protections management programs and protections against high out-of-pocket medical against high out-of-pocket medical spending. Or, seniors who like the lower spending. Or, seniors who like the lower cost sharing and extra benefits often cost sharing and extra benefits often available in managed care plans would be available in managed care plans would be able to make that choice as well. able to make that choice as well.

More Choices-Better Benefits-More Choices-Better Benefits-And the Choice to Stay with the And the Choice to Stay with the Coverage You Have TodayCoverage You Have Today Under a modernized Medicare, there will Under a modernized Medicare, there will

be better coverage for preventive care be better coverage for preventive care (e.g., a "welcome to Medicare" physical (e.g., a "welcome to Medicare" physical that would include screening for cancer, that would include screening for cancer, diabetes, and heart disease, as well as diabetes, and heart disease, as well as immunizations against pneumonia and the immunizations against pneumonia and the flu). flu).

All Americans can benefit from provisions All Americans can benefit from provisions in the bill that will remove excessive in the bill that will remove excessive restrictions on health savings accounts, restrictions on health savings accounts, which will give individuals more control which will give individuals more control over the costs of their health care and give over the costs of their health care and give them access to coverage that is affordable, them access to coverage that is affordable, flexible and portable. flexible and portable.

Reforms to Strengthen and Reforms to Strengthen and Modernize MedicareModernize Medicare Private health plans will compete for Private health plans will compete for

seniors' business by providing better seniors' business by providing better coverage at affordable prices-helping to coverage at affordable prices-helping to control the costs of Medicare by using control the costs of Medicare by using market-place competition, not government market-place competition, not government price-setting. price-setting.

Private sector competition will result in Private sector competition will result in more innovation and flexibility in coverage. more innovation and flexibility in coverage. This will be a significant improvement over This will be a significant improvement over the way benefits are provided in Medicare the way benefits are provided in Medicare today -where politicians and bureaucrats, today -where politicians and bureaucrats, rather than health care markets, dictate rather than health care markets, dictate what is covered and what is paid. what is covered and what is paid.

Reforms to Strengthen and Reforms to Strengthen and Modernize MedicareModernize Medicare Private employers will receive incentives to Private employers will receive incentives to

continue to provide drug coverage to their continue to provide drug coverage to their retirees. retirees.

For the first time ever, the legislation will For the first time ever, the legislation will require the Medicare Trustees to analyze require the Medicare Trustees to analyze the combined fiscal status of the Medicare the combined fiscal status of the Medicare Trust Funds and warn Congress and the Trust Funds and warn Congress and the President when Medicare's general fund President when Medicare's general fund subsidy exceeds 45 percent. This new subsidy exceeds 45 percent. This new fiscal safeguard will put the program on a fiscal safeguard will put the program on a stronger financial foundation by alerting stronger financial foundation by alerting future congresses and Presidents when future congresses and Presidents when Medicare's dedicated revenues fall below Medicare's dedicated revenues fall below adequate levels. adequate levels.

Prescription Drug PlanPrescription Drug Plan

What is Medicare prescription drug coverage?What is Medicare prescription drug coverage?Medicare prescription drug coverage is insurance Medicare prescription drug coverage is insurance that covers both brand-name and generic that covers both brand-name and generic prescription drugs at participating pharmacies in prescription drugs at participating pharmacies in your area. Medicare prescription drug coverage your area. Medicare prescription drug coverage provides protection for people who have very high provides protection for people who have very high drug costs or from unexpected prescription drug drug costs or from unexpected prescription drug bills in the future.bills in the future.

Who can get Medicare prescription drug Who can get Medicare prescription drug coverage?coverage?Everyone with Medicare is eligible for this coverage, Everyone with Medicare is eligible for this coverage, regardless of income and resources, health status, regardless of income and resources, health status, or current prescription expenses. or current prescription expenses.


When can I get Medicare prescription When can I get Medicare prescription drug coverage?drug coverage?You may sign up when you first become You may sign up when you first become eligible for Medicare (three months before eligible for Medicare (three months before the month you turn age 65 until three the month you turn age 65 until three months after you turn age 65). If you get months after you turn age 65). If you get Medicare due to a disability, you can join Medicare due to a disability, you can join from three months before to three months from three months before to three months after your 25th month of cash disability after your 25th month of cash disability payments. If you don't sign up when you payments. If you don't sign up when you are first eligible, you may pay a penalty. If are first eligible, you may pay a penalty. If you didn't join when you were first eligible, you didn't join when you were first eligible, your next opportunity to enroll will be from your next opportunity to enroll will be from November 15, 2007 to December 31, 2007. November 15, 2007 to December 31, 2007.


How does Medicare prescription How does Medicare prescription drug coverage work?drug coverage work?Your decision about Medicare Your decision about Medicare prescription drug coverage depends prescription drug coverage depends on the kind of health care coverage on the kind of health care coverage you have now. There are two ways you have now. There are two ways to get Medicare prescription drug to get Medicare prescription drug coverage. You can join a Medicare coverage. You can join a Medicare prescription drug plan or you can join prescription drug plan or you can join a Medicare Advantage Plan or other a Medicare Advantage Plan or other Medicare Health Plan that offers Medicare Health Plan that offers drug coverage.drug coverage.


Whatever plan you choose, Whatever plan you choose, Medicare drug coverage will Medicare drug coverage will help you by covering brand-help you by covering brand-name and generic drugs at name and generic drugs at pharmacies that are convenient pharmacies that are convenient for you. for you.


Like other insurance, if you join, generally you will Like other insurance, if you join, generally you will pay a monthly premium, which varies by plan, and a pay a monthly premium, which varies by plan, and a yearly deductible (between $0-$265 in 2007). You yearly deductible (between $0-$265 in 2007). You will also pay a part of the cost of your prescriptions, will also pay a part of the cost of your prescriptions, including a copayment or coinsurance. Costs will including a copayment or coinsurance. Costs will vary depending on which drug plan you choose. vary depending on which drug plan you choose. Some plans may offer more coverage and Some plans may offer more coverage and additional drugs for a higher monthly premium. If additional drugs for a higher monthly premium. If you have limited income and resources, and you you have limited income and resources, and you qualify for extra help, you may not have to pay a qualify for extra help, you may not have to pay a premium or deductible. You can apply or get more premium or deductible. You can apply or get more information about the extra help by calling Social information about the extra help by calling Social Security at 1-800-772-1213 (TTY 1-800-325-0778) Security at 1-800-772-1213 (TTY 1-800-325-0778) or visiting or visiting www.socialsecurity.govwww.socialsecurity.gov. .


Why should I get Medicare prescription Why should I get Medicare prescription drug coverage?drug coverage?Medicare prescription drug coverage Medicare prescription drug coverage provides greater peace of mind by provides greater peace of mind by protecting you from unexpected drug protecting you from unexpected drug expenses. Even if you don't use a lot of expenses. Even if you don't use a lot of prescription drugs now, you should still prescription drugs now, you should still consider joining. As we age, most people consider joining. As we age, most people need prescription drugs to stay healthy. For need prescription drugs to stay healthy. For most people, joining now means protection most people, joining now means protection from unexpected prescription drug bills in from unexpected prescription drug bills in the future.the future.


What if I have a limited income and What if I have a limited income and resources?resources?There is extra help for people with limited There is extra help for people with limited income and resources. Almost 1 in 3 income and resources. Almost 1 in 3 people with Medicare will qualify for extra people with Medicare will qualify for extra help. If you qualify for extra help, Medicare help. If you qualify for extra help, Medicare will pay for almost all of your prescription will pay for almost all of your prescription drug costs. You can apply or get more drug costs. You can apply or get more information about the extra help by calling information about the extra help by calling Social Security at 1-800-772-1213 (TTY 1-Social Security at 1-800-772-1213 (TTY 1-800-325-0778) or visiting 800-325-0778) or visiting www.socialsecurity.govwww.socialsecurity.gov. .


Prescription Drug Coverage: Things to Prescription Drug Coverage: Things to ConsiderConsider To get Medicare coverage for your prescription To get Medicare coverage for your prescription

drugs, you must choose and join a Medicare drugs, you must choose and join a Medicare drug plan. Regardless of how a Medicare drug drug plan. Regardless of how a Medicare drug plan decides to offer this coverage, there are plan decides to offer this coverage, there are some key factors that may vary. Some of these some key factors that may vary. Some of these factors might be more important to you than factors might be more important to you than others, depending on your situation and drug others, depending on your situation and drug needs. These factors are: needs. These factors are:

CostCost CoverageCoverage ConvenienceConvenience Peace of mind now and in the futurePeace of mind now and in the future


CostCost PremiumPremium

This is the monthly cost you pay to join a Medicare drug This is the monthly cost you pay to join a Medicare drug plan. Premiums vary by plan. plan. Premiums vary by plan.

DeductibleDeductibleThis is the amount you pay for your prescriptions before your This is the amount you pay for your prescriptions before your plan starts to share in the costs. Deductibles vary by plans. plan starts to share in the costs. Deductibles vary by plans. No plan may have a deductible more than $265 in 2007. No plan may have a deductible more than $265 in 2007. Some plans may not have any deductible.Some plans may not have any deductible.

Copayment/CoinsuranceCopayment/CoinsuranceThis is the amount you pay for your prescriptions after you This is the amount you pay for your prescriptions after you have paid the deductible. In some plans, you pay the same have paid the deductible. In some plans, you pay the same copayment (a set amount) or coinsurance (a percentage of copayment (a set amount) or coinsurance (a percentage of the cost) for any prescription. In other plans, there might be the cost) for any prescription. In other plans, there might be different levels or "tiers," with different costs. (For example, different levels or "tiers," with different costs. (For example, you might have to pay less for generic drugs than brand you might have to pay less for generic drugs than brand names. Or, some brand names might have a lower names. Or, some brand names might have a lower copayment than other brand names.) Also, in some plans copayment than other brand names.) Also, in some plans your share of the cost can increase when your prescription your share of the cost can increase when your prescription drug costs reach a certain limit.drug costs reach a certain limit.


CoverageCoverage FormularyFormulary

A list of drugs that a Medicare drug plan A list of drugs that a Medicare drug plan covers is called a formulary. Formularies covers is called a formulary. Formularies include generic drugs and brand-name include generic drugs and brand-name drugs. Most prescription drugs used by drugs. Most prescription drugs used by people with Medicare will be on a plan's people with Medicare will be on a plan's formulary. The formulary must include at formulary. The formulary must include at least two drugs in categories and least two drugs in categories and classes of most commonly prescribed classes of most commonly prescribed drugs to people with Medicare. This drugs to people with Medicare. This makes sure that people with different makes sure that people with different medical conditions can get the treatment medical conditions can get the treatment they need. they need.


CoverageCoverage Prior AuthorizationPrior Authorization

Some drugs are more expensive than others Some drugs are more expensive than others even though some less expensive drugs work even though some less expensive drugs work just as well. Other drugs may have more side just as well. Other drugs may have more side effects, or have restrictions on how long they effects, or have restrictions on how long they can be taken. To be sure certain drugs are used can be taken. To be sure certain drugs are used correctly and only when truly necessary, plans correctly and only when truly necessary, plans may require a "prior authorization." This means may require a "prior authorization." This means before the plan will cover these prescriptions, before the plan will cover these prescriptions, your doctor must first contact the plan and show your doctor must first contact the plan and show there is a medically-necessary reason why you there is a medically-necessary reason why you must use that particular drug for it to be covered. must use that particular drug for it to be covered. Plans might have other rules like this to ensure Plans might have other rules like this to ensure that your drug use is effective.that your drug use is effective.


CoverageCoverage Coverage GapCoverage Gap

If you have high drug costs, you may consider If you have high drug costs, you may consider which plans offer additional coverage until you which plans offer additional coverage until you spend $3,850 (in 2007) out-of-pocket. In some spend $3,850 (in 2007) out-of-pocket. In some plans, if your costs reach an initial coverage plans, if your costs reach an initial coverage limit, then you pay 100% of your prescription limit, then you pay 100% of your prescription costs. This is called the coverage gap. This costs. This is called the coverage gap. This "gap" in coverage is generally above $2,400 (in "gap" in coverage is generally above $2,400 (in 2007) in total drug costs until you spend $3,850 2007) in total drug costs until you spend $3,850 out-of-pocket. Some plans might offer some out-of-pocket. Some plans might offer some coverage during the gap. Even in plans where coverage during the gap. Even in plans where you pay 100% of covered drug costs after a you pay 100% of covered drug costs after a certain limit, you would still pay less for your certain limit, you would still pay less for your prescriptions than you would without this drug prescriptions than you would without this drug coverage. coverage.


ConvenienceConvenience Drug plans must contract with Drug plans must contract with

pharmacies in your area. Check with the pharmacies in your area. Check with the plan to make sure your pharmacy or a plan to make sure your pharmacy or a pharmacy in the plan is convenient to pharmacy in the plan is convenient to you. Also, some plans may offer a mail-you. Also, some plans may offer a mail-order program that will allow you to have order program that will allow you to have drugs sent directly to your home. You drugs sent directly to your home. You should consider all of your options in should consider all of your options in determining what is the most cost-determining what is the most cost-effective and convenient way to have effective and convenient way to have your prescriptions filled.your prescriptions filled.


Peace of Mind Now and in the FuturePeace of Mind Now and in the Future Even if you don't take a lot of prescription drugs Even if you don't take a lot of prescription drugs

now, you still should consider joining a drug now, you still should consider joining a drug plan. As we age, most people need prescription plan. As we age, most people need prescription drugs to stay healthy. For most people, joining drugs to stay healthy. For most people, joining now means you will pay a lower monthly now means you will pay a lower monthly premium in the future since you may have to premium in the future since you may have to pay a penalty if you choose to join later. You will pay a penalty if you choose to join later. You will have to pay this penalty as long as you have a have to pay this penalty as long as you have a Medicare drug plan. If you reach the point where Medicare drug plan. If you reach the point where you have spent $3,850 (in 2007) out-of-pocket you have spent $3,850 (in 2007) out-of-pocket for drug costs during the year, the plan will pay for drug costs during the year, the plan will pay most of your remaining drug costs. This most of your remaining drug costs. This protection could start even sooner in some protection could start even sooner in some plans. plans.

Medicare Prescription Drug Medicare Prescription Drug FinderFinder

http://www.medicare.gov/MPDPhttp://www.medicare.gov/MPDPF/Public/Include/DataSection/QuF/Public/Include/DataSection/Questions/MPDPFIntro.asp?versioestions/MPDPFIntro.asp?versionn==default&browserdefault&browser=Firefox%7C2%7CWinXP&lang=Firefox%7C2%7CWinXP&language=uage=English&defaultstatusEnglish&defaultstatus=0&pagelist==0&pagelist=Home&ViewTypeHome&ViewType==Public&PDPYearPublic&PDPYear=2007&MAPDYear=2007&MPD=2007&MAPDYear=2007&MPDPF%5FMPPF%5FIntegrate=NPF%5FMPPF%5FIntegrate=N

ppa 419 – aging services administration lecture 5c - medicare prescription drug, improvement, and...

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