2004 REACH National Medicare Training Program

1. 2004 REACH National Medicare Training Program Speaker Name Group Name Date

2. Medicare Modernization Actof 2003 Module 9

3. Medicare Today • 41 million beneficiaries growing to over 62 million in 2020 • $284 billion in expenditures growing to $898 billion in 2020 • Need to adapt to new health care delivery models • Need for supplemental coverage

4. Current commercial market: 70% in PPOs or POS plans 25% in HMOs 5% in fee-for-service Medicare market: 90% in fee-for-service 10% in Medicare Advantage plans Medicare Today

5. Clear Need For Reform • People with Medicare want: • More choices and better benefits • Health care delivery options • Improved access to care

6. 2004 Drug discount card Medicare + Choice now Medicare Advantage Moratorium on therapy caps until 1/1/06 2006 Prescription drug plans Two new Medigap policies Part B deductible increases with premium Medicare Modernization Actof 2003 (MMA) • 2005 • Drug discount card • New preventive services • Part B deductible increases to $110

7. Session Topics • Medicare-approved drug discount cards (2004-2005) • Medicare prescription drug plans (2006) • New preventive services (2005) • Medicare Advantage plans (2004) • Increased access to care in rural America (2004) • MMA demonstration projects (2004) • Other important provisions

8. Session Topics • Medicare-approved drug discount cards • Medicare prescription drug plans • New preventive services • Medicare Advantage plans • Increased access to care in rural America • MMA demonstration projects • Other important provisions

9. Drug Discount Cards Medicare-ApprovedDrug Discount Cards • Estimated savings of 15-30% on many drugs • Effective June 2004 • Temporary and voluntary • “Medicare-Approved” seal

10. Drug Discount Cards Approved Drug Card Companies • Decide which drugs to discount • Decide pharmacy network • Charge up to a $30 annual enrollment fee • May offer mail order in addition to retail pharmacies • Must have a customer service system with a toll-free number

11. Drug Discount Cards Enrolling In and Changing Cards • Apply directly to card company • Can enroll anytime • Can change during Coordinated Election Period • November 15 - December 31, 2004 • Effective January 1, 2005 • May change for special circumstances

12. Drug Discount Cards $600 Credit • Provides immediate relief to certain people with lower incomes • No more than $12,569 for a single person • No more than $16,862 for a married couple • No asset limits • QMBs, SLMBs, and QIs deemed income-eligible • Coinsurance based on income (5% or 10%) • Cannot use for over-the-counter drugs

13. Drug Discount Cards Applying for $600 Credit • Choose a discount card • Apply to the company offering your card • Can apply for credit at any time • Amount will be prorated in 2005 • Unused amounts carry over to next year • Need not reapply in 2005

14. Drug Discount Cards Let’s meet Fred…. • Has card with $600 credit • Normally pays $100 retail • XYZ Pharmacy Card offers negotiated price of $75 • Fred pays coinsurance based on $75 • $75.00 x 5% = $3.75 • Remainder is deducted from the $600 credit • $75.00 - $3.75 = $71.25 • $600 - $71.25 = $528.75 credit remaining

15. Drug Discount Cards State Pharmacy Assistance Programs • Can coordinate with the Medicare-approved drug discount card • Can educate members with lower incomes on $600 credit • Can pay coinsurance for lower-income members • Can pay enrollment fee for lower-income members

16. Session Topics • Medicare-approved drug discount cards • Medicare prescription drug plans • New preventive services • Medicare Advantage plans • Increased access to care in rural America • MMA demonstration projects • Other important provisions

17. Prescription Drug Plans Medicare Prescription Drug Plans • Available January 2006 • Offered through private prescription drug plans (PDPs) • Can be offered by Medicare Advantage plans

18. Prescription Drug Plans Eligibility and Enrollment • Must be entitled to Part A and/or enrolled in Part B • Enrollment is voluntary • Enrollment penalties for persons who wait • Exception for those covered under other comparable insurance

19. Prescription Drug Plans Eligibility and Enrollment • Initial enrollment • November 15, 2005 - May 15, 2006 • Subsequent years • Open enrollment November 15 - December 31 • Will not be enrolled automatically • Exception: Medicaid recipients with drug coverage

20. Prescription Drug Plans Your Costs in 2006 • Generally about a $35 monthly premium • $250 deductible • 25% of drug costs from $250 to $2,250 • Medicare pays 75% • 100% of drug costs from $2,250 to $5,100 • After you spend $3,600, Medicare pays approximately 95%

21. Prescription Drug Plans Let’s look at a case study • Aaron has a Medicare prescription drug plan and takes five prescription drugs. His Medicare prescription drug plan includes all of his drugs in its formulary. Aaron has paid his $35 premium from January through May and has met his $250 deductible. How much in drug costs does Aaron have to incur before he reaches the catastrophic limit?

22. Prescription Drug Plans Lower-Income Assistance • Group 1 • Full benefit dual eligibles with incomes below 100% FPL • Group 2 • Full benefit dual eligibles and non-dual eligible beneficiaries with incomes of 100%-135% FPL and limited resources ($6,000 per individual and $9,000 married couple) • Group 3 • Beneficiaries with incomes of 135%-150% FPL and limited resources ($10,000 individual and $20,000 married couple)

23. Prescription Drug Plans Lower-Income Assistance

24. Prescription Drug Plans Electronic Prescribing • Medication errors reduced • Prescription automatically transmitted to pharmacy • Standard to be established and piloted in 2006 • Will alert to adverse drug interactions and less costly alternatives • Will be voluntary for doctors

25. Session Topics • Medicare-approved drug discount cards • Medicare prescription drug plans • New preventive services • Medicare Advantage plans • Increased access to care in rural America • MMA demonstration projects • Other important provisions

26. New Preventive Services New Preventive Services • “Welcome to Medicare” physical exam • Diabetes screening tests • Cardiovascular screening blood tests

27. New Preventive Services “Welcome to Medicare” Physical Exam • Height and weight measurement • Blood pressure • Electrocardiogram (EKG) • Education and counseling • Referral for other preventive services • Coverage for a limited time

28. New Preventive Services Diabetes Screening • Effective January 1, 2005 • For persons at risk—risk factors include • High blood pressure • High cholesterol • Overweight • Family history of diabetes • Over 65 years of age • Includes fasting plasma glucose test • Frequency limits apply • No deductible or coinsurance

29. New Preventive Services Cardiovascular Screening • Effective January 1, 2005 • Blood tests for early detection of cardiovascular disease • Cholesterol levels • Frequency limits apply • No deductible or coinsurance

30. Session Topics • Medicare-approved drug discount cards • Medicare prescription drug plans • New preventive services • Medicare Advantage plans • Increased access to care in rural America • MMA demonstration projects • Other important provisions

31. Medicare Advantage Plans Medicare Advantage Plans • Better benefits and more choices • Improved access to doctors and care for people with Medicare • Reduced premiums and copays or improved benefits • PFFS enrollees will pay more for going to non-contract providers

32. Medicare Advantage Plans Specialized Plans • Certain MA plans can limit enrollment to special needs population • Institutionalized beneficiaries • Dual eligibles • Possibly other “special needs” groups • Design options to best serve these populations

33. Medicare Advantage Plans New Plan Options • New plan choices in 2006 • Most important new option—Regional Preferred Provider Organizations (PPO)

34. Session Topics • Medicare-approved drug discount cards • Medicare prescription drug plans • New preventive services • Medicare Advantage plans • Increased access to care in rural America • MMA demonstration projects • Other important provisions

35. Access to Care in Rural America Helping Rural America • Improve beneficiaries’ access to quality doctors, ambulance service, and home health care where they live • Nearly $25 billion in increased reimbursement

36. Access to Care in Rural America Payment Increases to Hospitals • Standardizes reimbursement for hospitals • Modifies disproportionate share hospital payments • Increases payment to Critical Access Hospitals

37. Session Topics • Medicare-approved drug discount cards • Medicare prescription drug plans • New preventive services • Medicare Advantage plans • Increased access to care in rural America • MMA demonstration projects • Other important provisions

38. Demonstration Projects MMA Demonstration Projects • Competitive Acquisition Demonstration for Clinical Labs • Demonstration Project for Use of Recovery Audit Contractors • Rural Hospice Demonstration Project • Rural Community Hospital Demonstration • Frontier Extended Stay Clinic Demonstration

39. Demonstration Projects MMA Demonstration Projects • Demonstration of Case-Mix Adjusted Payment for Renal Dialysis Services • Demonstration Project for Coverage of Certain Prescription Drugs and Biologicals • Medicare Health Care Quality Demonstration Project • Demonstration Project for Consumer-Directed Chronic Outpatient Services

40. Demonstration Projects MMA Demonstration Projects • Medicare Care Management Performance Demonstration • Demonstration of Coverage of Chiropractic Services Under Medicare • Demonstration Project to Clarify the Definition of Homebound • Demonstration Project for Medical Adult Day- Care Services • Beneficiary Outreach Demonstration Program

41. Session Topics • Medicare-approved drug discount cards • Medicare prescription drug plans • New preventive services • Medicare Advantage plans • Increased access to care in rural America • MMA demonstration projects • Other important provisions

42. Other MMA Provisions Protections for Retirees • Retirees concerned about losing their EGHP • New law works to stabilize the erosion • Employer must qualify for subsidy • Subsidy will pay 28% of drug costs per beneficiary enrolled in EGHP • Of costs between $250 and $5,000

43. Other MMA Provisions Appeals Process Reform • Transfer of hearing functions • Increase timeframes for decision-making

44. Other MMA Provisions Changes to Part B Deductible • $100 since 1991 • Increases to $110 in 2005 • Updated based on Medicare expenditures, 2006 on

45. Other MMA Provisions Changes to Part B Premium • Prior to MMA, standard Part B premium • Current premium is based on 25% of program spending in a year • Beginning 2007 through 2011, premium based on beneficiary income • No effect if income below $80,000

46. Other MMA Provisions Therapy Limits • Limits created by the BBA 1997 • Moratorium effective until 2003 • Moratorium reinstated through 2005

47. Other MMA Provisions Health Savings Accounts • Tax-advantaged savings accounts for medical expenses • Available to anyone under 65 • Must have a high deductible health plan • At least $1,000 deductible for individual • At least $2,000 deductible for family • Yearly contributions are limited • Distributions for medical expenses not taxed

48. Other MMA Provisions Communicating with the Public • Medicare beneficiaries • Health care providers • Governors, state legislators, and local officials • Congress • Advocates • Other stakeholders

49. For More Information • Visit www.medicare.gov • Call 1-800-MEDICARE (1-800-633-4227) • TTY 1-877-486-2048 • Call a SHIP counselor • See Medicare & You handbook for phone number • Visit www.cms.hhs.gov

50. 2004 REACH National Medicare Training Program Thank you!