The new Medicare prescription drug coverage prescription drug coverage, also known as Part D (created by the Medicare Modernization Act of 2003), may affect all people with Medicare . This includes both senior citizens eligible for Medicare after age 65 as well as disabled Americans covered by health coverage through Medicare. All new prescription drug plans will begin coverage on January 1, 2006, with enrollment open from November 15, 2005 – May 15, 2006. Currently, there are 42 million people with Medicare in the United States. The Centers for Medicare and Medicaid Services (CMS) report that one-quarter of seniors and people with disabilities now receiving Medicare have no drug coverage, even though prescription drugs are an integral part of modern medicine for preventing disease and complications.
Initial enrollment for the Medicare prescription drug coverage begins on November 15, 2005 and lasts through May 15, 2006. People with both Medicare and Medicaid (known as “dual eligibles”) will be automatically enrolled, and their drug coverage will switch from Medicaid to Medicare, and people with Medicare only may voluntarily enroll into the program.
Extra Help is a program that helps eligible people defer the costs of the new Medicare prescription drug benefit. People with Medicare and Medicaid (known as “dual eligibles ”) and other partial dual eligibles (such as Qualified Medicare Beneficiaries (QMB), Specified Low-Income Medicare Beneficiaries (SLMB), Qualifying Individuals (QI) and Consumers with Supplemental Security Income (SSI)) will be automatically enrolled in these assistance programs. Other individuals with Medicare must apply for the Extra Help program, also referred to as the low-income subsidy (LIS). Medicare estimates that more than 11 million people with Medicare will receive financial assistance for prescription drug coverage. A variety of state and charitable programs will also be available to help these low-income individuals enroll and pay for the new prescription drug plan.
Most people in a prescription drug plan will pay a monthly premium, co-payments for each medication, an annual deductible and co-insurance. People with Medicare and Medicaid and some people with limited incomes will have lower costs. Consumer’s costs will include a monthly premium of about $32.20 and a $250 deductible, unless the consumer has very little income (about $14,000/year for an individual and about $19,000/year for a couple). In addition, you will have to pay 25% of your prescription drug costs between $250 and $2,250. Once your drug costs reach $2,250, you will be responsible for paying the full cost for your medications until your drug costs reach $5,100, or you will pay a total of $3,600 out-of-pocket. Once you reach this amount, you will only have to pay a co-payment (generally 5% of the medication cost or co-pays of $2-$5 per drug).
The Medicare prescription drug benefit is designed so that consumers will not be worse off for receiving subsidy assistance (known as the Extra Help program) to help defer their prescription drug costs. Providers need to be aware that the reduction in medical expenses may change the eligibility of other programs in which consumers are currently participating. Each consumer’s situation will be unique, so it is important to be vigilant about how Medicare prescription drug coverage affects other benefits.
What is the impact of the Medicare prescription drug coverage on food stamps?
With the Extra Help to defer prescription drug costs, a consumer may see his/her Food Stamps benefit go down as they spend less on drugs, but the decline is expected to be more than offset by Medicare’s Extra Help. With Extra Help, consumers will have more cash to spend on things they need other than medications, like food.
Changes in medical expenses should be reported when the consumer files to renew his/her Food Stamps benefit. However, if the consumer’s medical expense went up for any reason, he/she can report the increased cost at any time.
Providers should give consumers who are receiving Food Stamps and are eligible for Extra Help a copy of the CMS Tip Sheet “Information Partners Can Use: Food Stamps,” 5/25/05.
What is the impact of the Medicare prescription drug coverage on housing assistance?
Consumers will not lose housing assistance eligibility if they qualify for Extra Help in paying for the new Medicare prescription drug plan.
With the Extra Help to defer prescription drug costs, the portion of the rent that a consumer pays may increase, but their expenditures on prescription drugs should decrease. The increase in the consumer’s rent cost is expected to be more than offset by Medicare’s Extra Help. Using the subsidy means consumers will have more cash to spend on things they use.
After the consumer knows the amount of Extra Help they qualify for, the provider and the consumer should discuss with the agency that handles the consumer’s rent determination the impact of the Extra Help on the portion of the rent for which they will be responsible. By doing this, the consumer will know whether or not his or her rent will increase at the next recertification. Participation in a Medicare prescription drug plan does not need to be reported until the consumer’s family income and composition is recertified.
Providers should provide and review with consumers who are receiving housing assistance and are eligible for Extra Help the CMS Tip Sheet “Information Partners Can Use: Housing Assistance from the Department of Housing and Urban Development (HUD).”
What is the impact of the Medicare PDP on Medicaid Spend Down?
Consumers will not lose Medicaid Spend Down if they qualify for Extra Help in paying for the new Medicare prescription drug coverage. This option allows a person to spend down to Medicaid eligibility by having medical expenses that can be subtracted from their income. Subtracting medical expenses such as prescription drugs and eye glasses from your income can reduce a person’s income to a level below the maximum allowed by a particular state’s Medicaid plan. The subsidy program will reduce a consumer’s payments for prescription drug expenses.
However, if a consumer “spends down” to Medicaid because they have high drug costs, they may find that the new Medicare prescription drug plan covers their drug spending and they no longer “spend down” as quickly to become Medicaid-eligible. Under the spend-down process, a person becomes eligible for Medicaid even if they have too much income to qualify otherwise.
Consumers who have partial dual eligibility, such as Qualified Medicare Beneficiaries (QMB), Specified Low-Income Medicare Beneficiaries (SLMB), Qualifying Individuals (QI), and consumers with Supplemental Security Income (SSI), will have slightly different enrollment and Extra Help procedures. Providers should provide and review with consumers (who are utilizing the Medicaid Spend Down process and are eligible for subsidy assistance) the CMS Tip Sheet “Information Partners Can Use: Medicaid Spend Down.”
All Medicare prescription drug plans must have a formulary, which is a list of drugs covered by the plan that includes both generic and brand name medicines. CMS requires that the plans include medications in a wide range of therapeutic categories. The U.S. Pharmacopeia (USP) has created a model classification system for drug categories and classes. It is expected that CMS will compare plan formularies to this or similar systems to determine that a plan covers a sufficient number of categories.
Utilization management (UM) techniques (sometimes referred to as “benefit management tools”) are measures taken by prescription drug plans to control the access to or use of specific drugs. The Centers for Medicare and Medicaid Services (CMS) states that UM techniques for the new Medicare prescription drug coverage “must include incentives to reduce costs when medically appropriate and assist with preventing over-utilization and under-utilization of medications.”
If the preferred drug(s) on a consumer’s prescription drug plan’s (PDP) formulary would not be as effective as the drugs that the consumer is currently taking or would have an adverse effect on the consumer, then the consumer or his or her physician can file for coverage determination or an exception from the prescription drug plan.
Residents of long-term-care (LTC) medical or nursing facilities are a unique and vulnerable population with special pharmacy needs.