What is Medicare Part D?
Starting January 1, 2006, Medicare will begin to offer prescription drug plans to help with paying rising drug costs. To be eligible for Medicare Part D, you must be enrolled in either Medicare Part A or B. It is important that you understand the changes affecting your prescription drug coverage choices. If you currently have Medicaid drug coverage, you will lose it and automatically be enrolled in a new plan through Medicare. You will still have your other Medicaid benefits. There are a number of different prescription drug plans (called "PDPs") available through Medicare Part D that are offered by private companies. Some plans will offer drugs that other plans do not so it is important to carefully select the right PDP for you to make sure that your medication is included under the plan. Information about specific PDPs will be made available starting in October 2005.
Do I have to have Medicare Part D? And if so, what will it cost me?
No, you do not have to enroll in Part D. It is completely voluntary and you may continue to keep your current prescription drug coverage (either through your employer, union, etc) if you wish. If you later decide to enroll in Part D, however, you may be faced with a late enrollment penalty.
If you decide to enroll in the basic benefit plan, there will be an approximate drug coverage premium of $37 a month. You also have to pay a $250 deductible and then 25% co-insurance for drug costs. If your drugs cost more than $2,250 for the year, you will have to pay 100% of the cost until the cost of covered drugs reaches $5,100 (called a "doughnut hole"). Therefore, beneficiaries will have to pay a total of $3600 of out of pocket costs before Medicare will begin to pay 95% of the formulary drug prices.
Only out of pocket costs for formulary drugs that are paid for by you, a family member, or another person acting on your behalf, or a state pharmacy assistance program count toward your annual out of pocket limit of $3600. Payments by other insurance (such as employer or union plans) do not count. After $5,100 in total expenses, you will receive catastrophic coverage and will only have a 5% coinsurance or a co-payment of $2 for generic drugs or $5 for brand name drugs, whichever is greater.
If you qualify for low income assistance, costs will decrease dramatically. People currently receiving Medicaid, MSP, or SSI will automatically receive low income assistance and will only pay a small co-payment for prescription drugs. Other people will be eligible for low income assistance if their income is less than 150% of the federal poverty level ($14,595/year or $19,485 for a couple) and have limited resources($10,000 or $20,00 for a couple).
What should I think about when selecting a Part D plan?
It is important to realize that all plans are not created equal. Plans are likely to vary not only in the cost but also in the type of drugs offered. PDPs are given flexibility as long as the total value of their plan is the same as the basic benefit. Therefore some plans may have higher co-payments than others while others have lower premiums.
In addition, PDPs have considerable discretion to decide which specific drugs to include on their formularies. Therefore, PDPs do not necessarily have to pay for all the drugs that are covered by Medicare Part D. If you need a drug that is not on your plan's formulary, you will have to pay full price for the drug. Additionally, payments for non-formulary drugs will not count toward your out of pocket expenses. Each PDP also gets to decide which pharmacies to use. It is possible that a nursing home will no longer be able to receive residents' drugs from a single pharmacy but will have to deal with a number of pharmacies since residents are likely to have different PDPs.
Plans can vary on a wide array of matters. Some plans might also include options for mail-order drugs. Additionally, plans may place limitations on the number of prescriptions per month or the number of pills allowed per prescription. Each plan may have a different procedure and steps to go through for an appeal to get your medicine because the plans are offered by a multitude of private companies rather than a single entity. Because of all the variations in Medicare Part D plans, it is extremely important to carefully choose and select a plan that meets your needs.
What happens if I have Medicaid?
If you currently have Medicaid, you will lose your Medicaid prescription drug coverage on January 1, 2006 and will automatically be enrolled in a new plan through Medicare. In October 2005, letters will be mailed out to Medicaid recipients alerting them which plan they will be enrolled in if they do not choose one by December 31, 2005. In order to make sure that your drugs will be covered, you should select a plan that suits your needs.
What about my Medigap plan?
Starting January 1, 2006, any person enrolled in Part D cannot buy or renew Medigap plans H, I, and J. If you have a Medigap H, I, or J plan and want to keep its prescription drug coverage, you cannot enroll in Part D. But, if you choose to later enroll in a Part D plan and lose your Medigap drug coverage, you will be charged a penalty premium. If you want to keep your Medigap plan and enroll in Part D, your Medigap plan will be modified to exclude prescription drug coverage after Part D becomes effective and your premium will be modified accordingly.
Can I supplement my Part D drug coverage at all?
Yes, individuals who enroll in Part D prescription drug coverage can still supplement their coverage from other sources. Supplemental coverage can either offer more comprehensive coverage than Medicare or it may choose to wrap around the Medicaid Part D benefit and help with cost sharing. One option is help through a state pharmacy assistance program (such as EPIC in New York). Employers and unions can also choose to help with supplemental coverage as well.
What about my Medicare discount prescription drug card I have?
The Medicare discount card program will be phased out once the Part D prescription drug benefits begin. The program will be discontinued either when your Part D plan takes effect or at the end of the initial enrollment period on May 15, 2006, whichever comes first.
When and how can I sign up?
There is a six month initial enrollment period starting on November 15, 2005 and continuing until May 15, 2006. If you enroll before or on December 31, 2005, your new plan will start on January 1, 2006 and you will see no lapse in coverage. If you choose to enroll after January 1, 2006, your plan will start on the 1st of the following month. You can currently apply for low income assistance either through Social Security (www.ssa.gov) or through your state Medicaid office. To enroll in a Part D plan, you will apply directly to Medicare (www.cms.gov) but can only apply once the enrollment period begins.
What should I do?
Since Medicare Part D is new, there are still many uncertainties regarding changes in coverage. It is advisable to speak to a knowledgeable Elder Law attorney aware of all the intricacies of Medicare law in order take full advantage of the new Medicare drug coverage.