Transcript PART D - Typepad

Day 4
Medicare Prescription
Drug Program (Part D)
Review
Medicare

For people 65+ and under 65 with a disability

4 parts of Medicare
• Part A: Hospital Insurance
• Part B: Medical Insurance
• Part C: Medicare Advantage Plans
• Part D: Prescription Drug Coverage

Part A & B called Original Medicare
• Automatic enrollment if getting SS benefits, must enroll if not
• Premiums always for Part B, only for A if not enough credits
• Not comprehensive coverage, has coverage gaps
• Out-of-pocket costs for A & B change yearly- see chart
Medicare


Pays for reasonable and medically necessary services
There are coverage gaps in Medicare including:
 Part A in-patient hospital deductible
 Part A daily co-payment for in-patient hospital days 61-90
 Part A daily co-payment for in-patient hospital days 91-150
 Part A daily co-payment for SNF days 21-100
 Part B annual deductible
 Part B co-insurance (usually 20%)
 First three pints of blood
 Coverage outside the United States
Medicare Advantage



Option for supplementing Original Medicare
• Offered by a private company that contracts with Medicare
to provide a beneficiary with their Part A & B benefits
• One way for a beneficiary to get additional Medicare
coverage to cover the gaps in Original Medicare
The plan must offer Part D drug coverage – members who
want drug coverage may only take drug plan offered by the
Medicare Advantage plan
• If enroll in stand alone PDP, will be dis-enrolled from Part C
and returned to Original Medicare
Different plan types available
• HMO, HMO-POS, PPO, SNP, PFFS
Medigap

Option for supplementing Original Medicare
• Offers coverage to fill gaps in Original Medicare
• Offered by private insurance companies, not the federal
government
• Prescription coverage NOT included; if a beneficiary wants
prescription drug coverage, they must join a Medicare
Prescription Drug Plan

A Medigap policy is different from a MA plan; MA plans are
ways to get Medicare benefits. A Medigap policy acts as a
secondary policy to cover the costs of Original Medicare
benefits
Two Options For Supplementing Medicare
Step 1: Decide how you want to get your coverage
MEDICARE ADVANTAGE PLAN
ORIGINAL MEDICARE
PART A
Hospital
Insurance
&
PART B
Medical
Insurance
OR
PART C
Combines Part A, Part B
and usually Part D
Step 2: Decide if you need a Prescription Drug Plan
PART D
Stand Alone PDP
PART D
Included in Part C
Step 3: Decide if you need to add supplemental medical coverage
MEDIGAP
Supplement Core or
Supplement 1 plan
END
If you join a Medicare Advantage Plan
with drug coverage (MAPD), you
cannot join another drug plan and
you don’t need and cannot be sold a
Medigap policy
Medicare Prescription
Drug Program
(Part D)
Part D Overview
 Medicare offers prescription drug coverage to everyone with
Medicare
 Provides outpatient prescription drug coverage
 Beneficiaries with Part A and/or Part B are eligible
 2 ways to get prescription coverage:
1. Medicare Prescription Drug Plans (PDPs); also known as
stand alone plans
2. Medicare Advantage (Part C) Plans with drug coverage
 Part D is voluntary, but eligible beneficiaries who do not enroll
may be subject to a penalty
Part D Plans



May differ on many levels but must meet both pharmacy
access and formulary standards set by CMS
PDPs and MA-PDs may vary based on:
• Benefit Design
• Monthly Premium
• Co-payments
• Formulary
• Drug Prices
• Pharmacy Network
All plans must offer the standard prescription drug benefit or
its equivalent. The plans may choose to offer supplemental
benefits for an extra premium
Formulary

The prescription benefit includes a list of “covered drugs” and
this list is called the “formulary”

If the insurer is very selective about which drugs are to be
covered, then it is sometimes referred to as a “closed
formulary”. If the formulary is open to all drugs but places
drugs into different cost sharing categories or “tiers”, it is
referred to as an “open formulary”

Each plan must meet formulary standards. The formulary
must include and cover certain drugs or certain classes of
drugs. Medicare has established a category of excluded drugs
Examples of Part D Excluded
Drugs

Drugs for anorexia, weight loss or weight gain

Drugs for the symptomatic relief of cough and colds

Prescription vitamins and mineral products, except
prenatal vitamins and fluoride preparations

Non-prescription drugs (over the counter)

Drugs that could be covered under Medicare Part A
and/or Medicare Part B
Appeals to Formulary

Beneficiaries can take the following steps when a drug they are
taking is not covered under the formulary
• Ask prescriber if she/he meets prior authorization or step
therapy requirements or if there are generic, over-thecounter or less expensive brand name drugs
• Request a coverage determination (including an
“exception”) that the plan cover the drug
• Try to find a SEP in order to switch Part D plans to one that
has a formulary that covers all of the drugs
Prior Authorization

Many insurers will provide access to a particular drug only
after the physician requests approval explicitly for that
drug for the patient

One reason for requiring prior authorization is that it is a
means to make sure the doctor has considered the use of
less expensive alternatives before requesting the particular
drug that requires prior approval

This is a very popular cost management technique used
with many drugs on many Medicare Part D plans
Generic Vs. Brand Name Drugs

Massachusetts is a generic-mandated state in which
all pharmacists have to dispense generic if available
unless the physician indicates: no substitution

Generic drugs contain the same active ingredients,
have the same strength and dosage as the brand
name drug and must meet the same government
quality control standards
Four Enrollments Periods
• Initial Enrollment Period (IEP)
• Open Enrollment Period (OEP)
• Special Enrollment Period (SEP)
• Medicare Advantage Disenrollment Period
(MADP)
Initial Enrollment Period

65+: Mimics that of Medicare Part B (7 month period)

Under 65: Mimics that of Medicare Part B; beneficiaries who
become eligible for Medicare due to a disability can join
during period 3 months before through 3 months after 25th
month of cash disability payments

MassHealth members: When eligible for Medicare, primary
prescription coverage under MassHealth ends. MassHealth
notifies Medicare of member’s dual status and individual has
60 days to enroll in Part D plan or will be auto-enrolled in a
plan chosen at random
Open Enrollment Period

October 15th - December 7th, coverage effective January 1st

During this period beneficiaries can:
• Join a plan for the first time (If late enrollee, would be subject
to late enrollment penalty)
• Switch plans (including changing MA plans)
• Drop a plan

To switch a plan:
• Simply enroll in new plan. No need to cancel old Medicare
drug plan as the coverage will end when the new drug
plan begins
Special Enrollment Period

Certain conditions make beneficiaries eligible for a SEP during
which they can enroll in a Part D plan outside of the initial
enrollment period. They include:
• Moving out of their plan’s service area
• Loss of creditable coverage
• Having dual eligible status (enrolled in MassHealth &
Medicare or enrolled in a Medicare Savings program)
• Being a member of Prescription Advantage (a State
Prescription Assistance Program known as a SPAP)
• Switching to a 5-star rated plan – beneficiary can make one
switch at any time during the year to a 5-star rated plan
Medicare Advantage
Disenrollment Period

January 1st – February 14th

During this period, beneficiary CAN:
• Dis-enroll from a MA plan and return to original Medicare and
enroll in a stand-alone Medicare Prescription Drug Plan (PDP)
• Dis-enroll from a MA plan without drug coverage and enroll in
a PDP. May be subject to a late enrollment penalty

During this period, beneficiary CANNOT:
• Switch from Original Medicare to a MA plan
• Switch from one MA plan to another
• Switch from one Medicare Prescription Drug plan to another
Late Enrollment

If a Medicare beneficiary does not join a Medicare
Prescription Drug Plan when first eligible and didn’t have
other creditable prescription drug coverage that met
Medicare’s minimum standards, they could incur a late
enrollment penalty

All Medicare beneficiaries (including those who are still
working) must have creditable coverage to avoid the late
enrollment penalty
Creditable Coverage

Coverage that is at least as good as Medicare Part D

Protects a beneficiary from the Part D penalty

Employer or retiree coverage, union coverage, VA coverage:
Need proof of coverage to avoid penalty

Beneficiaries still working:
• Benefits administrator has information about whether the
employer coverage is creditable
• Beneficiaries should be encouraged to ask the benefits
administrator about their creditable coverage status if
they have not been notified
Late Enrollment Penalty

Penalty is 1% of the national base beneficiary premium for EACH
MONTH the beneficiary:
• Did not enroll in a Medicare PDP when they were first
eligible AND:
Had no prescription drug coverage
OR
 Had coverage that was not considered “creditable”
OR
 Had a lapse in creditable coverage of 2 full months (63
days)

Late Enrollment Penalty

The penalty is added to the premium at the time of
enrollment and is a lifetime penalty except for:
• A beneficiary under age 65 who is enrolled in Part D and
subject to a late enrollment penalty will have the penalty
waived at age 65
 This waiver mirrors the “clean slate” provided to
Medicare enrollees subject to a Part B penalty prior to
turning age 65
• Beneficiaries enrolled in Extra Help will have the penalty
paid for by Extra Help. If the beneficiary loses her/his
Extra Help, she/he would need to pay the Part D penalty
Supplement 2
(aka Medex Gold)

Considered creditable coverage

No penalty if beneficiary eventually joins a Part D
plan

Beneficiary can join during a Part D plan during the
Open Enrollment Period or if they qualify for a
Special Enrollment Period
• Dis-enrolling from the plan is NOT in of itself a SEP
Part D Costs

Must pay monthly premium to the plan which includes an
annual deductible that may change annually
• Those with a Medicare Advantage Pan with drug coverage
pay a monthly premium to the plan that includes the
premium for their health care coverage and their Part D
coverage

Premiums indexed according to income (same as Part B)

Premium can be deducted directly from Social Security check

Deductible amount changes yearly and varies from plan to
plan
Co-payment VS. Co-insurance

Co-payments: Set dollar amount that is paid at the
pharmacy, e.g., $8 for a 30-day supply at a retail
pharmacy. Usually, generic drugs have lower copays than brand drugs

Co-insurance: Percentage of the retail cost, e.g.,
25% for a 30-day supply. This is the amount the
beneficiary would be required to pay
2014 Standard Medicare Part D
Level
Description
Deductible
Annual deductible paid by the Beneficiary: $310.00 max
Initial Coverage After deductible, beneficiary pays 25% of the drug costs
and Medicare pays 75%
Initial coverage limit is $2,850
Coverage Gap
“Donut Hole”
Begins once initial coverage limit is reached
Beneficiary pays percentage of the cost for brand name
(47.5%) and generic drugs (72%)
Beneficiary’s out of pocket reaches $4,550= catastrophic
Catastrophic
Begins when catastrophic limit is reached
Beneficiary pays 5% of the drug costs and Medicare pays
95%
ACA Closing the Coverage Gap

The Affordable Care Act
reduces the costs to
beneficiaries who reach
the coverage gap.
Effective January 2011
beneficiaries receive
discounts on both brand
and generic drugs in the
gap. These discounts
will increase each year
until the coverage gap is
eliminated in 2020
Enrolling into Part D

Review plan options
• Plan Finder Tool on www.medicare.gov
• Determine PDP plan vs. MA-PD plan
• Consider cost, coverage, quality, and convenience
• Try to avoid drug restrictions using:
 Step Therapy
 Prior Authorizations
 Quantity Limitations

Contact plan directly or call 1-800-Medicare
• Enrollment can take place on the phone, online, or
through a mailed in paper application
Extra Help /
Limited Income Subsidy
&
Prescription Advantage
Extra Help/Low Income Subsidy
(LIS)

Extra Help is a federal assistance program to help low-income and
low-asset Medicare beneficiaries with costs related to Medicare
Part D

Extra Help subsidizes:
• Premiums
• Deductibles
• Copayments
• Coverage Gap “Donut Hole”
• Late Enrollment Penalty

Does NOT subsidize non-formulary or excluded medications

Apply through Social Security Administration
2 Levels of Extra Help

Full Extra Help
• 135% of the Federal Poverty Level (FPL) and asset limits
• Full premium assistance with no deductible
• Low, capped co-payments. Could be $0 for some
generics at any level
 Partial Extra Help
•
•
•
150% of the FPL and asset limits
Reduced premiums (sliding scale – between 25% -75%
assistance dependent upon income)
Reduced deductible and 15% co-payments
Extra Help Eligibility

Resources counted:
• Bank accounts (checking, savings, CDs)
• Stock, bonds, savings bonds, mutual funds, IRAs
• Real estate other than a primary home

Resources NOT counted:
• Primary home, car
• Property one needs for self-support, such as a
rental
property (rent payments are considered as income)
• Burial spaces owned by a beneficiary
• Personal belongings
Dual-Eligibles

Medicare beneficiaries who are also enrolled in
Medicaid/MassHealth, Supplemental Security
Income (SSI) or a Medicare Savings
Program/MassHealth Buy-in) are known as dualeligibles

These beneficiaries do not have to apply for Extra
Help as they are “deemed eligible” and will be
enrolled automatically
Extra Help Coverage Period

If an individual loses their Extra Help coverage due to no
longer meeting the eligibility requirement, the end of the
benefit coverage will depend upon when the individual
loses their Extra Help coverage
• If the Extra Help benefit is lost PRIOR to July:
Coverage will end by December 31st of that SAME
year
• If the Extra Help benefit is lost AFTER July:
Coverage
will end by December 31st of the FOLLOWING year
Prescription Advantage

Massachusetts’ State Pharmacy Assistance Program
(SPAP)

Provides secondary coverage for those with Medicare or
other “creditable” drug coverage (i.e. retiree plan)

Benefits are based on a sliding income scale only – no
asset limit!

Level of assistance provided is determined by gross
income

Different income limits for under 65 and 65 and over
Benefits for Individuals on Medicare or
With Creditable Coverage

Helps pay for drugs in the gap (for most members)

May help pay all or part of the Medicare prescription drug
plan's drug co-pays (All medications must be covered by
primary plan)

Those in top income category (S5) must pay $200 annual fee
for limited benefits

Members are provided a SEP (one extra time each year outside
of open enrollment to enroll or switch plans)

Prescription Advantage does NOT pay the late enrollment
penalty fee
Benefits for Individuals NOT on
Medicare

Offers members who do not qualify for Medicare, primary
prescription drug coverage

Coverage has no monthly premium

Depending on income, members will pay a co-pay for
prescription drugs and will have an annual out-of-pocket
spending limit and quarterly deductible. Once annual out-ofpocket limit is reached, Prescription Advantage will cover
drug co-pays for the remainder of the plan year

Members are provided a SEP (one extra time each year
outside of open enrollment to enroll or switch plans)
Part D Review

Review
1. What is Medicare Part D and how is it offered?
2. Who is eligible?
3. What is creditable coverage?
4. How is the late enrollment penalty calculated?
5. When is the Open Enrollment Period?
6. When does the coverage gap or “donut hole” begin?
7. What programs are available to reduce drug costs?
Part D Quiz
1. Late enrollees in Part D will face a penalty of:
a) 10% per year
b) 5% per year
c) 1% per month
d) l0% per month
2. To meet the out-of-pocket requirement for catastrophic
coverage Part D enrollees can (select all that are correct):
a) Pay for their drugs themselves
b) Use Prescription Advantage
c) Buy drugs
from Canada
d) Get family
members to help
3. Define “creditable coverage”
4. Why is it important that a beneficiary know if she/he has
creditable coverage?
Part D Quiz, cont.
5. What does the Low Income Subsidy (LIS) help pay for?
6. Who is eligible to receive LIS?
7. Who must apply and who is “deemed eligible”?
8. Minnie Sota meets with you at the SHINE office. She read about
Part D and is not sure if she needs it. She will be retiring and will
have a retiree plan from her employer with prescription coverage.
How would you assist Minnie with her decision?
9. Pat E. Cake meets with you on November 20th. She says she
belongs to a Medicare Advantage Plan. She tells you the
prescription drug plan with her MA costs more than she wants to
pay, so she has decided to take the Part D plan offered by the
agent she met at CVS. How would you assist her?
Case Study 1:
Ann Apolis

Ann is very distraught about the Medicare Part D program. She
currently has Medicare A & B and a retiree Medicare supplement
plan through her former employer. She is very happy with her
retiree plan. It provides coverage for all the deductibles and copays
under Medicare and also provides unlimited drug coverage with
$5-$15 co-pays for a 90-day supply of her medications. Her
monthly premium for the retiree plan is $145.00. Her friend told
her that she should have joined the Medicare Part D program
during the initial open enrollment. The friend also told her she will
face a penalty if the retiree plan should stop providing coverage
and she wants to join Part D in the future.
• How would you help her?
Case Study 2:
Mel O. Dee

Mel is assisting his mom who has finally decided to retire at age 72.
His mom visited her local Social Security office and signed up for
Medicare B. (She signed up for A when she turned 65.) He understands
that she also needs to sign up for a Part D plan. His mom takes few
meds and he thinks her drug costs are not more than a few hundred
dollars/year. Mel heard that Part D plans are expensive and don’t
cover many meds. He has no idea how to go about helping her to
choose a plan or whether she really needs one. He is concerned
about the costs for Part D along with any other insurance/ care
costs since her only income will be SS of $15,000/year. She owns
her own home and has about $15,000 in assets and a $10,000 life
insurance policy.
• How would you help him?
Case Study 3:
Manny Phestacion

Manny meets with you at the SHINE office. He is 66
years old and still working full-time. Manny is
covered by his group health plan. He enrolled in
Medicare Part A when he turned 65. Manny
understands that he does not need to enroll in
Medicare Part B or a Medicare Prescription Drug
Plan (Part D) until he stops working. He thinks he can
enroll when he retires and will not have to pay a late
penalty.
• Is he correct?
Case Study 4:
Jean E. Ology

Jean comes to see you at the SHINE office after previously
reviewing her options with you over the phone. She is retiring
in 2 months and wants to get your assurance that the options
she chose will work. Jean takes 3 medications — two are
generic and relatively inexpensive and one is an expensive
brand. After hearing about the Part D program, she has
decided to go with a Medicare Advantage (Medicare HMO)
plan and join a Medicare Prescription Drug Plan (Part D) that
provides coverage for generics during the gap (donut hole).
• How would you help her?
Case Study 5:
Bud Jet

Bud meets with you at the SHINE office. Bud just retired last
month. He has Medicare A & B and a retiree Medicare
supplement plan from his former employer. He received a
notice from his former employer that his drug plan coverage
is not as good as the Medicare Part D drug coverage. His
understanding is that he can stay with his employer plan or
join Medicare Part D. After comparing the cost of his retiree
plan with the Medicare Part D plan, he decided to stay with
his employer plan as it fully meets his prescription needs and
is less expensive.
• How would you help him?
Case Study 6:
Phil S. Steen

Phil meets with you at the SHINE office. He tells you
he has Blue Cross/Blue Shield Supplement 1. He is
also a member of Prescription Advantage. He has a
Part D plan which had been working fine. However,
his doctor just gave him a new medication that he
discovered is not on the formulary of his plan. It’s an
expensive medication, and he can’t afford to
continue filling it.
• How would you help him?
Case Study 7:
Will U. Help

Mr. Help will be eligible for Medicare in 2 months and has already
visited his local SS office to sign up for Medicare. The woman he
met with at SS told him about Medicare A and B and also told him
he must sign up for a Medicare Prescription Drug plan. He
explained to her that he is a veteran and gets his prescriptions
through the VA. She said that didn’t matter. He still needs to sign
up or face a penalty. He tells you his income is a Social Security
check for $1100/month and a pension of $200/month. He
thought Medicare A+B and the VA would be all that he would
need. He is worried about the Part D penalty and wants to know
if you can help him figure out what Part D plan to join.
• How would you help Mr. Help?

Question for Medicare:
• I will be turning 65 this November. I plan to continue
working until age 67 and will be covered by my
employer health insurance. I will enroll in Medicare A
when I turn 65 but won’t pick up B & D until I retire. I
know that I have 8 months from termination of
coverage under my active employment to pick up Part
B. Is this also true for D? I will not face a penalty for
not joining Part D as long as I’m covered under my
employer plan while still actively working. Is that
correct?