Medicare Drug Benefit: Part D in Minnesota Minnesota Road Shows May and June 2005 Posted 6-14-05
MMA: Overview Overview • Summary of the 2003 Medicare Prescription Drug and Modernization Act (MMA) • Extra Help (LIS) • Policy impacts in Minnesota • Roles
MMA: Overview MMA • Most dramatic changes to Medicare since its original passage in 1965 • 415 pages! • Comprised of 12 Titles • Signed into law December 8, 2003
MMA: Overview MMA • Created • New Medicare Advantage options • New Medigap plans K & L • Established • Medicare Prescription Drug Discount Card • Transitional Assistance Program • Established the Voluntary Prescription Drug Benefit Program (Medicare Part D)
MMA: Overview MMA • Established subsidy for employers and unions that maintain retiree prescription drug coverage (28%) • Sets a new moratorium on implementation of the therapy caps through 2005 • Increased Medicare Part B deductible annually ($110 in 2005) • Applies higher Medicare Part B premiums to people above income thresholds as of 1/1/07
MMA: Overview New Part B Preventive Care • Cardiovascular Screening Blood Tests • Diabetes Screening Tests • “Welcome to Medicare” physical
MMA: Overview Medicare Drug Discount Cards • Offers discounts on prescription drugs • Interim relief • “Transitional Assistance” or “the credit” • $600/yr (prorated beginning 4/1/05) • Available to low-income Medicare beneficiaries (135% of FPL or less) • It’s not too late to sign up!
MMA: Medicare Advantage Medicare Advantage • New ways to integrate and package Part A and B • May include new Part D drug benefit • Replaces Medicare+Choice and offers more health coverage choices
MMA: Medicare Advantage Medicare Advantage Options • Managed Care Plans • Preferred Provider Organization (PPO) • Private Fee-for-Service Plans • Special Needs Plans (new) • Medical Savings Accounts
MMA: Medicare Advantage Current Minnesota Medicare Advantage Plans • Medicare managed care health plans • HealthPartners • UCare • Medicare Private Fee For Service plans • Humana • Sterling • Unicare
MMA: Medicare Advantage Future Minnesota Medicare Advantage Plan Possibilities • Local Medicare Advantage plan (MA-PD) – Part A, B and D • Specialized MA plans for Special Needs Beneficiaries (MSHO, MnDHO) • Medicare Advantage PFFS with Part D • Regional MA-PD – PPO like (Part A, B, and D)
MMA: Medicare Advantage Other Options (not Medicare Advantage) for Part D Coverage • Private Prescription Drug Plans (Part D only) • Medicare Cost Plan (Part A, B and maybe D)
MMA: Part D Medicare Prescription Drug Benefit: Part D January 1, 2006 A New Year, A New Medicare Benefit!
MMA: Part D Medicare Prescription Drug Benefit • Insurance coverage for prescription drugs • Helps lower the out-of-pocket cost of drugs • Voluntary benefit • Medicare Part D drug coverage supplants Medicaid drug coverage for people with both benefits • Beneficiaries must take action by choosing a plan (with some exceptions) • Initial enrollment period • November 15, 2005 through May 15, 2006
MMA: Part D Medicare Prescription Drug Benefit • Coverage is provided by a Medicare approved: • Prescription Drug Plan (PDP) • Medicare Advantage plan with prescription drug coverage (MA-PD) • Can also be provided by a Medicare Cost Plan • Plans may offer more than one option; alternative plans must be of at least equal value to the Part D standard benefit
MMA: Part D Medicare: Prescription Drug Benefit • There must be at least 2 prescription drug plans available in every region • One of these plans may be a MA-PD (regional Preferred Provider Organization)
Our Region WA ME MT ND VT NH MN OR NY MA WI SD ID MI CT RI WY NJ PA IA OH DE NE IN NV IL MD UT WV DC VA CO KS MO KY CA NC TN OK SC AR AZ NM AL GA MS TX LA AK FL HI MMA: Part D Note: A Medicare Advantage (MA) region is one color. A difference in shading indicates that there are multiple Prescription Drug Plan (PDP) regions nested within the MA region No change indicates that the MA and PDP regions are the same. For example, Wisconsin and Illinois are in one MA region; they are each a separate PDP region. Each territory is its own PDP region.
MMA: Part D Our Region (MA 19 and PDP 25) • 1.9 million Medicare beneficiaries • 559,000 beneficiaries below 135% of FPG • 157,000 beneficiaries below 150% of FPG • 242,000 dual eligible beneficiaries • 12% variation in drug spending across states within the region (nationally there is a 43% difference)
MMA: Part D Medicare Prescription Drug Benefit • Beneficiaries who do not take action to choose a plan during their enrollment period AND • Do not have other pharmacy coverage that is equal in value to the standard Part D benefit risk having to pay a higher drug plan premium
MMA: Part D Creditable Coverage • It is other pharmacy coverage that is at least equal in value to the standard Part D benefit is called creditable coverage • Can be in employer or union retiree plans, Veterans benefits, Federal Employees Health Benefit Plan, TriCare. • Plans must tell their enrollees if the coverage is creditable. • If the coverage is creditable, then the beneficiary who keeps this coverage and does not enroll in Part D will not pay a higher premium as a result of delaying enrollment in Part D. • If the coverage is not creditable, the beneficiary who decides to delay enrollment in Part D, may pay a higher premium.
Formulary • List of drugs that will be covered by the plan • Formularies will vary from plan to plan • Required to provide a minimum of 2 drugs from every therapeutic class • There are some excluded classes of drugs • Appeal rights
MMA: Part D Medicare Part D Standard Benefit • An approved plan offers negotiated discount prices based on a formulary with cost sharing • Cost-sharing for standard benefit in 2006: • Premium of $37 per month/$444 per year • Annual deductible of $250 • Coinsurance of • 25% on first $1999 of drug costs • 100% on next $2,850 in annual drug costs • 5% or co-pays when drug costs reach $5,101 annually
95% Catastrophic Benefit Drug Costs 5% Over $5,100 $2,251 - $5,100 $251 - $2,250 $0 - $250 Part D Standard Benefit No Subsidy Beneficiary Costs Part D Plan 100% 25% 75% $250 Deductible Premiums - est. $37/mo.
MMA: LIS Standard Benefit – True out of pocket costs (TROOP) • $250 annual deductible • $500(25% of drug costs $251-$2250) • Plan pays $1500 • $2,850(100% of drug costs $2251-$5100) • Plan pays $0 • Reach $3,600 annual TROOP, catastrophic coverage begins • Plan pays 95% • Beneficiary pays 5%
MMA: LIS Extra Financial Help • Low-Income Subsidy (LIS) • Provides help with Medicare Part D out-of-pocket costs • Subsidy may be full or partial, depending on income, resources and family size • Some will automatically get the full subsidy: • Medicare and full Medicaid benefits (Full Benefit Duals) • Medicare and are enrolled in a Medicare Savings program (QMB,SLMB,QI) • Medicare and supplemental security income (SSI)
MMA: LIS Extra Help: Partial Subsidy • Beneficiaries (Non-Medicaid and Non-SSI) with income between 135% and 150% FPL • Assets no more than $10,000 individual, $20,000 couple • Cost-sharing • Premium on sliding fee scale • $50 deductible • 15% coinsurance on drug costs up to $5,100 • $2/$5 copays on drug costs above $5,100 (catastrophic level)
Catastrophic Benefit Drug Costs Over $5,100 Co-Pays $2/$5 $51- $5,100 $0 -$50 • Part D Partial Subsidy • Lower Premiums • Lower Deductible • Lower Coinsurance • No Doughnut Hole Beneficiary Costs Part D Plan 15% 85% $50 Deductible Sliding Scale Premiums will vary
MMA: LIS Extra help: Full Subsidy • Beneficiaries with income below 135% FPL • Assets not greater than $6,000 single/$9,000 couple • Cost-sharing • No premiums • No deductible or coinsurance • No drug costs in doughnut hole except co-payments • $1/$3 for income at or below 100% FPL • $2/$5 for income above 100% FPL • Help with Medicare Prescription Drug Plan Costs • Does not enroll a beneficiary in a Medicare Drug Plan
MMA: LIS Full benefit duals, Medicare Savings program enrollees and SSI recipients • Automatic full subsidy • No need to complete an application • Cost-sharing • No premiums • No deductible • Co-payments • $1/3 for income at or below 100% FPL • $2/$5 for income above 100% FPL • No co-payments above $5,100 • No co-payments for full benefit duals in nursing homes or ICF/MR
Over $5,100 Catastrophic Benefit 100% Plan No copays $0 - $5,100 • Part D Full Subsidy • No Premiums • No Deductible • No Coinsurance • No Doughnut Hole Beneficiary Costs Part D Plan Drug Costs Co-Pays $1/$3 <100% FPL $2/$5 >100% FPL Co-Pays No premiums No deductibles
MMA: LIS Low-Income Subsidy Groups in MN – No application needed • Automatically eligible full subsidy • SSI beneficiaries • Medicare Savings group enrollees • Qualified Medicare Beneficiaries (QMB) • Service Limited Medicare Beneficiaries (SLMB) • Qualified Individuals 1 (QI-1) • QMB or SLMB on the MN Prescription Drug Program • Medicaid full benefit duals including • Elderly • Disabled • Employed disabled (MA-EPD) • Elderly waiver enrollees • Parents/caretakers • Enrollees with a spenddown
Sliding Scale Premium Assistance *Numbers are for 2006
Current Monthly Federal Poverty Level (FPL) Amounts • Based on a household size of 1 • FPL amounts change each July
Why Connect to MSP? • Medicare Part B monthly premium in 2006 will be $89.20 (currently $78.20) • Medicare Part B annual deductible in 2006 will be $125.40 (currently $110) • All MSPs will be eligible for Part D LIS/extra help (up to 135% of FPL) • Not all LIS will be eligible for MSP, but many will be (LIS up to 150% of FPL)
Why Connect to MSP? • MSP helps pay for cost-sharing/premiums for Part B • Part B includes physician services and some outpatient drugs not covered by Part D • Prescription drug coverage under Part D will require a physician order (Part B)
MMA: Part D MMA: Enrollment Timeline Start of Program Jan 1 2006 Nov 15 2005 May 15 2006 July 1 2005 Enrollment Period for Part D Plans Application Period for Low-Income Subsidy (Deemed - Automatically eligible) July 1 2005 Full benefit dual eligibles lose coverage under Medicaid for drugs that could be covered under Part D
The Timeline (subject to change) • April – November 15, 2005: Employers and unions notify retirees about creditable coverage • May 27-August 15, 2005: SSA mailing to potential low income subsidy beneficiaries begins • May 16, 2005: CMS mailing to “deemed” eligibles begins • July 1, 2005: SSA begins processing low income subsidy applications and notifying beneficiaries about eligibility • September 1, 2005: CMS mails out Medicare and You handbooks to all beneficiaries • September 2005: Part D plans announced • September 1-November 15: Medigap companies issue creditable coverage notices
The Timeline (subject to change) • October 1, 2005:Marketing of Part D plans begin • October 1, 2005:CMS begins mailing “you’ve been enrolled” notices to deemed beneficiaries • October 13, 2005:CMS launches online enrollment center for drug coverage • November 15,2005 - May 15, 2006:Initial Enrollment period for Part D • December 31, 2005: Medicaid drug coverage for dual eligibles ends • January 1, 2006: Medicare Part D coverage begins • April 1, 2006:CMS enrollment reminder mailing “Last chance to enroll without penalty” • May, 2006: Facilitated enrollment for MSP begins
The Timeline (subject to change) • October, 2005: CMS begins ongoing routine mailings of “deemed” status to new MSP enrollees • November 1, 2005: CMS begins ongoing routine monthly auto-enrollment for new full dual eligibles
MMA: Part D Decisions will depend on status • Find out if someone is: • Dual eligible? • Medical Assistance–Employed Persons with Disabilities (MA-EPD) enrollees? • MSHO/MnDHO enrollee? • State Pharmacy Assistance Program (SPAP) enrollee? • HIV/AIDS beneficiary with Medigap coverage? • Retiree with Rx coverage? • Medicare Supp. policyholder with Rx Coverage? • Medicare Cost Plan enrollee? • Medicare Advantage Private Fee for Service enrollee? • Local Medicare Advantage enrollee? • No Rx coverage at all?
Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003 Drug Discount Card 5/3/04—12/31/05 Part D Program Effective 1/1/06 Voluntary Part D Subsidy Help for beneficiaries with low income and limited resources on premium, deductible, and co-payments
Extra help to pay for Medicare Prescription Drug Benefit Premiums Deductibles Co-payments What is the subsidy?
Medicare beneficiaries with income and resources below 150% of Federal Poverty Level Who is eligible for the subsidy?
People who are automatically eligible for the subsidy Medicare and Medicaid Medicare Savings Programs (QMB, SLMB, QI) SSI and Medicare Do not have to complete an application States work with CMS to process subsidy for deemed population Deemed Population
Medicare beneficiaries who have limited resources and low income DO NOT have SSI; or Medicaid; or a Medicare Savings Program Must apply for a subsidy Not Deemed Population
Scannable application Internet application July 1 Phone with SSA At SSA office Offsite with SSA or other organization Subsidy Application Process
Begins May 27, ends mid-August Includes: Cover letter Scannable application Pre-addressed, postage paid return envelope By terminal digits 360,000 packages in Minnesota SSA’s Mailing
Do NOT photocopy application! Use #2 pencil or black ink. Keep numbers, letters, and Xs inside boxes. Fold only once, horizontally. Application Tips
File early! Do not send proofs. Mail: Social Security Administration Wilkes-Barre Data Operations Center P.O. Box 1020 Wilkes-Barre, PA 18767-1020 Internet beginning July 1, 2005 Will receive a receipt Submitting the Application