Medicare Prescription Drug Coverage

                                                                                          An Informational Fact Sheet

                                                                                                                           

   1-800-963-5337                        SHINE, The Florida Department of Elder Affairs                       August 19, 2005

Beginning January 1, 2006, a new Medicare Prescription Drug Coverage will be available to all Medicare beneficiaries. This benefit, also referred to as Medicare Part D, is one of many changes brought about by the Medicare Modernization and Improvement Act 0f 2003 (MMA). Approximately three million Medicare beneficiaries in Florida will have access to this new coverage. The information contained in this fact sheet is provided by the SHINE Program to help Medicare consumers and their caregivers make informed choices about prescription coverage options, and serves to explain the key aspects regarding this new benefit. 

 

ELIGIBILITY AND ENROLLMENT    

Medicare consumers who are entitled to Part A (hospital insurance) and/or enrolled in Part B (medical insurance), are eligible for the prescription drug coverage. Individuals eligible for both Medicare and Medicaid benefits (dual-eligible) may also enroll. (See the section entitled, “Limited Income? Get Extra Help”). Enrollment in a drug plan is on a voluntary basis and requires completion of an enrollment form. Although enrollment is voluntary, there are time limitations during which consumers must enroll to receive the benefits. The following enrollment periods offer consumers the opportunity to participate in this new coverage:   

♦        Initial Open Enrollment

November 15, 2005 through May, 15, 2006  

♦        Annual Coordinated Election Period

November 15 – December 31 of each year  

♦        Special Enrollment Period (must have a qualifying circumstance such as a change of residence)

 The initial enrollment period includes those first starting Medicare benefits and those already eligible. If enrollment occurs by December 31, 2005, benefits will begin on January 1, 2006. When enrollment occurs from January 1, 2006 through May 15, 2006, the benefit will be effective the first day of month following enrollment. 

Consumers will not be penalized for late enrollment if they have on average, coverage at least as good as the Medicare plan. This is called creditable coverage and includes coverage under: Medicare Advantage Plans, Medicaid, Employer/Union group health plans, COBRA insurance, and VA Benefits or other coverage including TRICARE-for-Life.

(NOTE: If an individual does not have creditable coverage and chooses not to enroll until a later time, a penalty of one percent per month will be added to their monthly premium.)

 COVERAGE OPTIONS      

In the fall of 2005, the Centers for Medicare & Medicaid Services (CMS) will disseminate information to all Medicare beneficiaries regarding prescription drug coverage options. In general, there will be two options:

      ·         Original Medicare and a Prescription Drug Plan (PDP), or a

    ·         Medicare Advantage Plan with prescription drug coverage (MA-PD), including Regional PPO’s.

Those who remain in Original Medicare will be able to join a stand-alone Prescription Drug Plan (PDP) that adds drug benefits to their regular Medicare coverage. (Long-term care residents will have specific plans to choose from that cover their facility and pharmacy.) 

Medicare Advantage Prescription Drug (MA-PD) plans will provide an integrated benefit covering their hospital, physician, and drug costs. Medicare Advantage plans are managed care organizations contracted with Medicare to serve beneficiaries in a specific geographic area. To qualify for a MA-PD, a beneficiary must be entitled to Part A and enrolled in Part B.  

(NOTE:  Both the PDPs and the MA-PDs may also include a high option plan that offers enhanced benefits at a higher premium.) 

A new option being provided for the first time by Medicare is a Regional PPO (Preferred Provider Organization) plan through a Medicare Advantage program. The Regional PPO will serve an entire geographic area (Florida is its own region), to include the more underserved and rural counties. This option will provide a needed benefit to those who have been without prescription coverage.

OUT-OF-POCKET COSTS 

Monthly premiums for most plans will average $32 per month ($384 per year). The standard Medicare drug coverage includes three levels of expense that beneficiaries will move through during the year as they purchase their prescription drugs.    

For 2006*, out-of-pocket costs for covered medications will include:

     

1. An annual $250 deductible 

2. 25% of prescription costs between $250 and $2,250 (a total of $500) 

3. 100% of prescription costs between $2,250 and $5,100 (a total of $2,850)    

Once prescription costs reach $5,100 (a total of $3,600 true out-of-pocket costs – not including the premium), consumers will pay $2 for generics and preferred drugs and $5 for all other drugs, or a 5% co-pay, whichever is greater.    

* Premiums and limits will be increased each year to reflect increases in inflation. 

 

MARKETING and PROTECTIONS 

Medicare Prescription Drug Plans may begin marketing their products as of October 1, 2005 and

Enrollment begins on November 15, 2005. The  seal below is approved by Medicare and must appear on all marketing materials. 

  

 

 Drug Plans –

·         May not come into your home uninvited, enroll you in a plan, ask you to pay for a plan over the telephone, call outside federal/state calling hours (before 8 AM or after 9 PM), and may not ask for payment over the web.  

·         May call you about their plan, send a bill if you enroll over the web, and may enroll you over the telephone if you are adding prescription drug coverage to a Medicare Advantage Plan or other Medicare Health Plan you already have. 

(NOTE:  Unwanted sales calls may be stopped by saying “stop” or “do not call again.” To register for the National Do-Not-Call Registry go to www.donotcall.gov.)

 Protect your Personal Information -

 Protect your personal information (Social Security number, bank account, credit cards), and don’t give it out unless you are sure the person is working with Medicare and their product is approved by Medicare. Plans are not allowed to request personal information in marketing activities.

 If you think someone is misusing your personal information, call:

 Ø      1-800-MEDICARE  (1-800-633-4227),

 Ø      Inspector General Fraud Hotline at                   1-800-447-8477, or the  

Ø      Federal Trade Commission’s ID Theft hotline at 1-877-438-4338.

MEDICARE SUPPLEMENTAL INSURANCE (MEDIGAP) 

Beginning January 1, 2006, insurers offering Medigap policies will no longer provide new policies that include or supplement prescription drug coverage. Switching over to a Part D option could save consumers substantial amounts on premiums in the long run and provide better drug coverage. Please carefully consider all options before making any decisions.

 A few things to consider:    

·         Consumers currently receiving prescription benefits through a Medigap (H, I, J) policy may choose to keep that option and not enroll in the Part D benefit. (Remember: Medigap benefits have a cap and do not include catastrophic Rx coverage.)    

·         Another option would be to switch to Part D and keep the Medigap plan but without the Rx coverage. Monthly premiums would be reduced due to the removal of the Rx benefit.    

·         A third choice would be to switch to Part D and select a new Medigap plan without prescription coverage (A, B, C, F, K or L). Plans K and L will offer additional discounts to help supplement Medicare premiums, deductibles, longer hospital stays, skilled nursing, hospice care and preventive services. 

LATE ENROLLMENT: Remember, if a consumer decides to switch to a Medicare Part D plan at a later date, they will pay a premium penalty and must wait until the next Annual Coordinated Election Period (November 15 – December 31) to enroll. Waiting also presents a loss of guaranteed rights to buy a different Medigap plan that does not cover drugs. 

PLAN NOTIFICATION: Current Medigap policy holders with a prescription drug benefit will receive a detailed notice from the insurance company indicating whether or not their policy, on average, covers at least as good as the Medicare plan. This notice will also explain consumer rights and choices.

  

 

 

 

 

 

 EMPLOYER or UNION COVERAGE

 

Medicare consumers that have existing employer or union coverage will receive a notice from the plan indicating whether the policy is at least as good as the Medicare Part D coverage and options available to you. 

If the plan has equal or better coverage:

 ·         Consumers may keep their current plan, and if they join a Medicare prescription drug plan later, they will not have to pay a monthly surcharge in addition to the monthly premium, OR
 ·         Drop their current plan and join a Medicare PDP. If this option is selected, they may not be able to get their employer or union drug plan back. 

If the employer/union plan covers less than a Medicare prescription drug plan, the following three options apply:

·         Keep the current plan and join a Medicare PDP to supplement plan coverage, OR
 
·         Keep the current plan and not join a Medicare PDP. If this option is selected and an individual wants to join a Medicare PDP at a later date, a premium penalty will be added for each month enrollment is delayed, OR

·         Drop the current plan and join a Medicare PDP.  If this option is selected, the consumer may not be able to get the employer/union drug plan back.

  

 

 

 

 

COVERED DRUGS 

Each of the companies that offer a PDP will establish a drug formulary. The formulary must include at least two drugs within each of 200+ therapeutic categories and classes, which have been determined by U.S. Pharmacopoeia. The formularies will be made available to beneficiaries at the time they enroll, and annually thereafter. Changes to formularies may occur at any time, and will be posted on the Internet (www.medicare.gov). 

Drugs that are excluded include: Barbiturates, Benzodiazepines (anti-anxiety medications), weight loss and weight gain medications, drugs covered under Part A or Part B benefits, fertility drugs, cosmetic drugs, cough or cold remedies, or vitamins (except prenatal). Only payment for prescription drugs that are part of a plan’s formulary will count toward the deductible and out-of-pocket limit. 

COVERAGE DETERMINATION or APPEALS 

An “exceptions” process will be in place for a beneficiary to request a covered Part D drug at a lower cost-sharing level, or to request a drug that is not on the plan’s formulary. The beneficiary’s physician must determine that the lower-cost drugs on the formulary are not as effective as the requested drug, or that they would have adverse effects for the enrollee. For Medicare Advantage plans, the appeals process currently in use will be in place for beneficiaries and their representatives to use in the event of an unfavorable coverage determination. 

LIMITED INCOME?  Get EXTRA HELP… 

Effective January 1, 2006, individuals who are eligible for both Medicare and Medicaid (dual eligible) will receive their prescription coverage through Medicare, instead of Medicaid. Depending on income levels, individuals will receive assistance regarding premiums, deductibles and co-pays. To apply for the “extra help” contact: your local Social Security Office, the National Social Security Administration at 1-800-772-1213, apply online at www.socialsecurity.gov, or contact your local office of the Department of Children & Families.  

Payment of co-pays, deductibles and co-insurance will count towards true out-of-pocket expenses. 

Individuals with annual incomes below $12,924 (and resources less than $6,000) or for couples with incomes below $17,328 (resources less than $9,000) will have a:

 

Ø      $0 premium

Ø      $0 deductible

Ø      $2 - $5 co-pay for drugs up to the out-of-pocket limit ($3,600) with the following exceptions:

      * Dual-eligible individuals (annual income below $9,576/Individual, $12,840/Couple) will pay $1 - $3 co-pays.

      * No co-pays for dual-eligible individuals who are in institutional settings.

Ø      $0 co-pay for all prescriptions once the out-of-pocket limit of $3,600 is reached.

 

 NOTE:  Medicare Savings Program recipients (QMB, SLMB and QI-1) and SSI will automatically receive the “extra help.”

 

Individuals with annual incomes below $14,355 (resources of $11,500) or for couples with incomes below $19,245 (resources of $23,000) will have a:

 

Ø      Premium based on a sliding scale ($ 0 - $37)

Ø      $50 deductible

Ø      15% coinsurance up to the out-of-pocket limit

Ø      $2-$5 co-pays once the $3,600 limit is reached.

                                                                           

RESOURCES

Medicare consumers, caregivers and family members may contact the SHINE Program for assistance with questions regarding the information contained in this fact sheet. Please call 1-800-963-5337 and ask for a SHINE Counselor. 

SHINE website:  http://elderaffairs.state.fl.us/doea/english/shine.html

Centers for Medicare & Medicaid Services websites:    http://www.cms.hhs.gov  or  http://www.medicare.gov