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Online Medicare Prescription Drug Coverage 2012 (2 hours L/H credit):

1 Online Medicare Prescription Drug Coverage 2012 (2 hours L/H credit) Tracy Young, CLU, HIA, ALHC C.E. Solutions 913-980-CE4U(2348) www.continuingedsolutions.com

Medicare Prescription Drug Benefit:

Medicare Prescription Drug Benefit Review and study this course at your leisure. Once the course is completed, enter the exam through the ClassMarker link at the end of the exam. You must receive a score of 70% or better to pass. You may retake the test at no additional cost as needed. The Insurance Department requires that all exams be taken in the presence of an approved disinterested 3 rd party monitor. Course Certificate will be faxed and sent electronically to the insurance department when notification of a passing score and an affidavit signed by the person monitoring the test is received. 2

C.E. Solutions:

3 C.E. Solutions The material presented in this course is for educational and informational purposes only. It should not be used to provide guidance to your customers or clients in lieu of competent, certified, legal advice. The parties involved in the development of this course shall not be liable for any inappropriate use of this information beyond the purpose stated above. As a student, you should understand that it is your responsibility to adhere to the laws and regulations pertaining to any aspect of this course and the materials presented within.

Class Outline …:

4 Class Outline … What is it all about? What choices do people have? Who is eligible to participate? What will be covered? What will the cost be? What are Part D Formularies? Qualifying for Drug Subsidies. Interaction with Other Coverages Other factors to consider.

Acronyms:

5 Acronyms CMS = Centers for Medicare & Medicaid Services FFP = Federal financial participation FFS = Fee-for-service program FPL = Federal Poverty Level LIS = Part D Low Income Subsidy MA-PD = Medicare Advantage prescription drug plan MMA = Medicare Prescription Drug, Improvement, and Modernization Act of 2003 PACE = Program All-Inclusive Care for the Elderly PDPs = prescription drug plans PFFS = private fee-for-service plan SPAP = State Pharmaceutical Assistance Program SSA = Social Security Administration TrOOP = True Out of Pocket Expenses http://www.cms.hhs.gov/acronyms/

Prescription Drug Coverage and Seniors::

6 Prescription Drug Coverage and Seniors: According to a recent national survey of Medicare beneficiaries, four of 10 seniors did not take all the drugs prescribed to them by doctors in the past year, due to cost, side effects, perceived effectiveness, or the belief that they did not need the medication. Healthcare Daily Data Volume 1, Issue 77 April 20, 2005

Prescription Drug Coverage and Seniors::

7 Prescription Drug Coverage and Seniors: Nationwide, 27% of all surveyed seniors and one-third of poor seniors (101%-200% of the federal poverty level) lacked prescription drugs. 89% of the surveyed seniors reported taking at least one medication. More than half of seniors (54%) reported having more than one prescribing physician, and 36% said they used more than one pharmacy. Healthcare Daily Data Volume 1, Issue 77 April 20, 2005

Prescription Drug Coverage and Seniors::

8 Prescription Drug Coverage and Seniors: Nearly one-third of seniors reported spending at least $100 per month on prescriptions. 5% reported buying some medicines from Canada or Mexico. Although seniors without coverage took significantly fewer medicines than those with coverage, they were twice as likely to spend $100 or more per month out of pocket (and were more likely to purchase medications from Canada and Mexico). Healthcare Daily Data Volume 1, Issue 77 April 20, 2005

Medicare Part D Timetable:

9 Medicare Part D Timetable October 15 – December 7, 2011 * Enrollment period. Coverage begins January 1st. You can join, switch or drop at this time. Exceptions … If you turn 65 (3 months before and after your birthday month). If you become disabled (with Medicare) If your “Credible Coverage” terminates. If you move to a different state. If you move to a nursing home. If you qualify for extra help. “Dual Eligible” is automatically enrolled. How do you avoid a penalty?

Creditable Coverage:

10 Employers : May provide health insurance with prescription drug coverage, either to an active worker, retiree, or dependent. They will notify the employee if the insurance meets the definition of “creditable coverage,” i.e., provides a drug benefit that is “actuarially equivalent” to the Part D benefit. If the drug benefit meets the definition of creditable coverage, then the individual may choose not to enroll in a Part D plan, and will not be charged a late penalty for delayed enrollment if he or she decides later to enroll in Part D. If the coverage is found not to be creditable coverage, then an individual will be penalized for delayed Part D enrollment. Creditable Coverage

Creditable Coverage:

11 Employers : You should get a notice every year telling you whether the drug coverage you have is creditable coverage. Keep this notice, because you may need it if you join a Medicare drug plan later. Employers currently cover drugs for more than 11 million beneficiaries. To encourage employers to maintain these benefits, Medicare will provide tax-free subsidies equal to 28% of costs between $250 and $5,000 in drug expenses per retiree to employers providing drug benefits that are at least comparable to the standard Part D benefit. Creditable Coverage

Creditable Coverage:

12 Employers : If you have employer or union coverage, call your benefits administrator before you make any changes, or before you sign up for any other coverage. If you drop your employer or union coverage, you may not be able to get it back. You also may not be able to drop your employer or union drug coverage without also dropping your employer or union health (doctor & hospital) coverage. If you drop coverage for yourself, you may also have to drop coverage for your spouse & dependents. Creditable Coverage

Creditable Coverage:

13 TRICARE – are Military Benefits Department of Veterans Affairs Federal Employee Health Benefits Program (FEHBP) Indian Health Services Medicare Advantage has over 7.6 million people enrolled and covers as a Medicare supplement and prescription drug benefit. Participants must purchase the MA-PD benefit under the plan. Creditable Coverage

Creditable Coverage:

14 The penalty for late enrollment … The late enrollment penalty is an amount that is added to your Part D premium (for as long as you have Medicare drug coverage) if all of the following are true: You don’t join a Medicare drug plan when you’re first eligible. You don’t have other creditable prescription drug coverage. You later decide to join a Medicare drug plan. Creditable Coverage

Creditable Coverage:

15 Don’t go for more than 63 days without a Medicare drug plan or other creditable coverage. Let your Medicare drug plan know if you have other creditable coverage. Why a late penalty if it’s voluntary? It’s an insurance concept. If there was no penalty, people who have no prescription drug costs now wouldn’t enroll, so you’d have a program that covered only the sickest people and it would be very expensive. Note: Discount cards, doctor samples, free clinics, drug discount websites, and manufacturer’s pharmacy assistance programs aren’t prescription drug coverage and aren’t creditable coverage. Creditable Coverage

Creditable Coverage:

16 How Much Will Your Part D Late Enrollment Penalty Be? When you join a Medicare drug plan, the plan will tell you if you owe a penalty, and what your premium will be. To estimate your penalty amount, count the number of full months that you didn’t have creditable coverage after you were eligible to join a Medicare drug plan. If you multiply this number by $.30 the (“1% penalty calculation”), you can estimate the amount that will be added each month to your Medicare drug plan’s premium for the current year. This penalty amount may increase every year. Creditable Coverage

What Is It All About?:

17 What Is It All About? This plan is meant to be a more modern Medicare - bringing more affordable health care, prescription drug coverage to all people with Medicare, expanded health plan options, improved health care access for rural Americans, and preventive care services, such as flu shots and mammograms. For a typical person with Medicare, this coverage, on average, will pay 50% of their drug costs next year.

What Is It All About?:

18 What Is It All About? This plan was added by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). More than 5.8 million people with Medicare have enrolled online in a drug plan since the program began. The Medicare Part D plans will be sold by private insurers that contract with Medicare. The idea is for competition among insurers to keep the prices down. Is it working?

What Is It All About?:

19 What Is It All About? Beneficiaries not eligible for subsidies have to choose and enroll in a Part D plan. The MMA establishes a standard drug benefit that Part D plans may offer. Plans must let beneficiaries know at least 60 days before a drug being used is removed from the list or if the costs are changing.

What Is It All About?:

20 What Is It All About? Plans must cover at least two drugs in each therapeutic class or category of covered Part D drugs, but can establish formularies and tiered cost-sharing amounts as long as they do not “substantially discourage enrollment by certain Part D eligible individuals” (MMA Final Rule, Section 423.272). Part D plans can also establish networks of preferred pharmacies that charge lower cost-sharing than out-of-network pharmacies. The plan must allow for convenient access to retail pharmacies. The plan needs to have a process to get drugs that are not on the list of covered drugs (formulary) when it is medically necessary The plan is required to provide useful information, such as how formularies and medication management programs work, information on saving money with generic drugs, and grievance and appeal processes.

What Is It All About?:

21 What Is It All About? If your doctor thinks you need a drug that isn’t on the list, or if one of your drugs is being removed from the list, you or your doctor can apply for an exception or appeal the decision. Plans are expected to produce savings by negotiating price discounts and rebates with drug companies. The MMA prohibits Medicare from negotiating drug prices.

What Is It All About?:

22 What Is It All About? Financing for the Medicare drug benefit will come from several sources: Premiums paid by beneficiaries Receipts from states (known as the “clawback”) Medicaid savings General revenues

What Choices Do People Have?:

23 What Choices Do People Have? You can buy a plan that offers the drug benefit alone. You can choose a Medicare Advantage plan that has prescription drug benefits.

What Choices Do People Have?:

24 What Choices Do People Have? You can keep the prescription drug benefits you get from your employer or other health plan (instead of getting drug benefits from Medicare).

How Do You Switch Your Medicare Part D?:

25 How Do You Switch Your Medicare Part D? Depending on your circumstances, you can switch to a new Medicare drug plan simply by joining another drug plan during one of the times listed above. You don’t need to cancel your old Medicare drug plan or send them anything. Your old Medicare drug plan coverage will end when your new drug plan begins. You should get a letter from your new Medicare drug plan telling you when your coverage begins.

Choice of Drug Plans:

26 Choice of Drug Plans The Part D benefit is premised on the notion that individual Medicare beneficiaries should have a choice of private drug plans in order to select a drug benefit that best meets their needs.

Choice of Drug Plans:

27 Choice of Drug Plans The majority of Medicare beneficiaries are in the traditional Medicare program and will be required to purchase drug coverage through prescription drug plans (PDPs) that offer only prescription drug coverage. PDPs will be offered by sponsoring organizations pursuant to a one-year contract with the Centers for Medicare & Medicaid Services (CMS).

Choice of Drug Plans:

28 Choice of Drug Plans Individuals who are enrolled in a Medicare Advantage plan established under Medicare Part C must receive their drug coverage through their Medicare Advantage prescription drug plan, known as an MA-PD.  They may not purchase a separate PDP.

Choice of Drug Plans:

29 Choice of Drug Plans However, individuals who are enrolled in a Medicare Advantage private fee-for-service (PFFS) plan that does not include a prescription drug option may purchase a PDP for their Part D coverage.

State Pharmaceutical Plans:

30 State Pharmaceutical Plans States may be able to provide cost-sharing and supplemental drug coverage for dual eligibles and other low-income residents through their State Pharmaceutical Assistance Program (SPAP). Any payments made by a SPAP on behalf of a Part D enrollee will count toward the enrollee’s true out-of-pocket costs, which count toward meeting the catastrophic threshold which leads to reduced or eliminated enrollee cost-sharing. Medicaid programs, including Pharmacy Plus waivers under Section 1115 of the Social Security Act, ADAPS, and any other programs where the majority of the funding is from federal programs, cannot be SPAPs.

Who Is Eligible To Participate?:

31 Who Is Eligible To Participate? Prescription drug coverage under Part D is voluntary . A beneficiary may purchase Part D coverage if they are entitled to Part A or enrolled under Part B. The beneficiary does not have to have both Part A and Part B coverage to choose prescription drug coverage.

Who Is Eligible To Participate?:

32 Who Is Eligible To Participate? More than 408,000 Medicare beneficiaries in Kansas and more than 930,000 in Missouri can choose to enroll in the voluntary Medicare prescription drug coverage. The beneficiary must enroll in a Part D plan that serves the geographic region in which she resides. Beneficiaries who are incarcerated are not eligible to participate in Part D.

What Will Be Covered?:

33 What Will Be Covered? The MMA establishes a standard drug benefit that Part D plans may offer. This is defined in terms of the benefit structure and not in terms of the drugs that must be covered. Because the deductible, initial coverage limit and annual out-of-pocket threshold will increase each year by the increase in expenditures for Part D drugs, beneficiary out-of-pocket expenses will increase annually. The MMA does not mandate a set premium amount .  Premiums will be determined by a bidding process and will vary from plan to plan and from region to region.

What Will Be Covered?:

34 What Will Be Covered? The MMA establishes a standard drug benefit that Part D plans may offer. Private insurance companies that want to continue participating in the Part D drug benefit must submit new bids each year. Thus, the premium that plans charge is likely to change on a yearly basis. Premium amounts will be especially critical for individuals with low-incomes, as they will only receive full assistance for plans with the lowest premiums. Individuals will have the option of having the premium taken from their Social Security check, paying the premium directly, or having the premium taken directly from a bank account.

What Will Be Covered?:

35 What Will Be Covered? Part D drug plans are not required to offer the standard benefit, but can offer alternative prescription drug coverage. Alternative coverage must be “actuarially equivalent” to the standard benefit. In other words, the value of the benefit package must be equal to or greater than the value of the standard benefit package.

What Will The Cost Be?:

36 What Will The Cost Be? Monthly premium average $53.99 nationwide – increasing every year since inception. This is in addition to Part B premiums. Premiums will vary by plan and by region. The “Affordable Care Act” … beneficiaries with an annual income of over $85,000 (single) or $170,000 (married) will pay a higher monthly premium! Yearly deductible is$330.00 for 2011. 25/75 Co-pay up to $2,930/yr total drug costs for 2012. The insured pays a copayment or coinsurance amount, and his plan pays its share for each drug until his total drug costs (including the deductible) up to $2,930. $4,700 “Doughnut hole” Deductible. (Individual pays $4,700 for $4,700 of Rx). 5/95 Co-pay or $2.40 for generic - $6.00 for brand name if greater. (After individual pays $5,567.50 total out-of-pocket, Medicare pays approx. 95% of Rx.)

How does it add up?:

How does it add up? $ 647.88 average annual premium +$320.00 annual deductible +$ 732.50 (25% of the $2,930 Coinsurance) +$ 318.50-$2,275 for donut hole deductible* =$1,700.38-$3,975.38 potential out-of-pocket *the amount varies depending on whether you take generic or name brand drugs* 37

New Coverage Gap Rebate:

New Coverage Gap Rebate What exactly was the 2010 Medicare Part D $250 Coverage Gap Rebate? This year, as part of the Affordable Care Act, the U.S. Department of Health and Human Services will send a one-time, tax-free $250 rebate check to Medicare beneficiaries enrolled in a Medicare Part D plan, who reach the Coverage Gap (also known as the “Donut Hole” or “Doughnut Hole”). Medicare beneficiaries who are receiving “Extra Help” from Medicare and Social Security will not be eligible for the $250 rebate. 38

Other Changes from2011 …:

Other Changes from2011 … Will Medicare beneficiaries with higher incomes pay a higher monthly 2011 prescription drug plan premium as compared to other beneficiaries? Yes. Starting January 1, 2011, some Medicare beneficiaries will pay a higher monthly drug plan premium based on their annual income. The higher Medicare Part D premium payments are similar in nature to income-based premium increases already in place for Medicare Part B coverage. Medicare beneficiaries with an annual income of over $85,000 (for single people) or $170,000 for married couples will pay a higher monthly Medicare Part D premium. If I go into the 2011 Coverage Gap, will my Doughnut Hole discount be deducted at the pharmacy or will I pay full price and get a refund from my Medicare Part D plan? You will receive the discount directly at the Pharmacy. The 2011 discount on your medications purchased in the Coverage Gap will be calculated at the point-of-sale (or Pharmacy). 39

Other Changes in 2012 …:

Other Changes in 2012 … What kind of discount can we expect in the 2012 Doughnut Hole? A 50% discount on Brand Name drugs and 7% discount on Generic drugs. Starting in the 2011 Medicare Part D plan year, the 100% cost-sharing (what you now pay) will be reduced for non-LIS Medicare beneficiaries on covered drug purchases in the Coverage Gap (or Doughnut Hole). The maximum co-insurance (what you will pay) for generic drugs will be 93% which is a 7% discount on the prescription drug plan’s negotiated generic drug price. Likewise, the negotiated retail cost of brand name drugs will be discounted by 50%. 40

What Will The Cost Be?:

41 What Will The Cost Be? The Congressional Budget Office estimates the typical senior will have an estimated $1,891 in yearly drug expenses. Beneficiaries will benefit from discounted drug prices for all their purchases, regardless whether the plan pays or the beneficiary pays out of pocket. Medicare estimates at 20% reduction in total drug spending from paying retail prices.

Calculating Beneficiary Expenses::

42 Calculating Beneficiary Expenses: Another critical and often over-looked factor is that only the cost of Part D covered drugs are included on a plan’s formulary count toward the deductible and out-of-pocket limits. For example, a beneficiary whose only drug expense in January is $300 for a coverable Part D drug, but that is not on her plan’s formulary, will not meet her deductible.

Calculating Beneficiary Expenses::

43 Calculating Beneficiary Expenses: Payments that count towards the yearly out-of-pocket limit is referred to as true out of pocket expenses, or TrOOP. Only out-of-pocket costs for formulary drugs that are paid for by the beneficiary, a family member or other person acting on her behalf, or by a state pharmacy assistance program are considered TrOOP and are counted towards the out-of-pocket limit.

Calculating Beneficiary Expenses::

44 Calculating Beneficiary Expenses: Not only is the beneficiary responsible for paying the full costs of non-formulary prescriptions, he/she gets no credit towards the Part D out-of-pocket limit for the expenses incurred. Drugs bought from Mexico or Canada during the doughnut hole deductible will not be applied to the deductible.

From www.medicare.com :

45 From www.medicare.com Only 4% of seniors reach the Catastrophic Coverage period. The following conditions or drug classes most frequently reach the Coverage Gap (past the doughnut hole deductible) during the year: Alzheimer’s Oral Anti-Diabetics Proton Pump Inhibitors Anti-depressants Angiotensin Receptor Blockers Statins Osteoporosis ACE Inhibitors

What can I do to prevent hitting the Coverage Gap or Donut Hole?:

46 What can I do to prevent hitting the Coverage Gap or Donut Hole? Find Medicare Part D plans that cover all of your medications. Find out whether there are generic alternatives for any of your medications. Find out if any of the local pharmacies offer your drugs at low cost ($4.00 to $5.00). Buy your medications from a mail-order pharmacy. Mail-order pharmacies typically provide a 3-month supply of your prescriptions for the cost of two co-payments.

What Are Considered Covered Drugs?:

47 What Are Considered Covered Drugs? The MMA defines the drugs that are covered under Part D, and therefore the drugs for which payment will be made under Part D, in relationship to their coverage under Medicaid and under other parts of Medicare. A Part D drug is a drug that is approved by the Food and Drug Administration, for which a prescription is required, and for which payment is required under Medicaid. Biological products, including insulin and insulin supplies, and smoking cessation drugs are also covered under Part D.

What Are Considered Covered Drugs?:

48 What Are Considered Covered Drugs? The MMA excludes from coverage those categories of drugs for which Medicaid payment are optional. Of particular significance to Medicare beneficiaries is the exclusion of drugs for weight gain (Used in connection with treating weight loss due to cancer or HIV/AIDS), barbiturates (Used to treat seizures in older people), benzodiazepines (Used to treat acute anxiety, panic attacks, seizure disorders, and muscle spasms in those with cerebral palsy), and over the counter medications. Many of these excluded medications are used by nursing home residents.

What Are Considered Covered Drugs?:

49 What Are Considered Covered Drugs? MMA also excludes from Part D coverage those drugs for which payment could be made under Medicare Part A or Part B. CMS has determined that such drugs are excluded from Part D coverage even if the beneficiary does not have coverage under the part of Medicare (either Part A or Part B) which would generally pay for the drug.

What drugs are not covered?:

50 What drugs are not covered? There is a small list of drugs that The Centers for Medicare and Medicaid Services (CMS) do not require the plans to cover. These drugs are also known as excluded drugs. However, some plans may decide to include them as an added benefit to their consumers. The Centers for Medicare and Medicaid Services (CMS) does not require these categories of drugs to be covered: Barbiturates (seizure drugs) Benzodiazepines (anxiety drugs) Weight loss or weight gain Fertility Cosmetic (e.g., hair growth) Cough and cold Over The Counter (OTC) Smoking Cessation (prescription smoking cessation drugs are covered)

What Are Part D Formularies?:

51 What Are Part D Formularies? Part D plans are not required to pay for all covered Part D drugs.  They may establish their own formularies, or list of covered drugs for which they will make payment, as long as the formulary and benefit structure are not found by CMS to discourage enrollment by certain Medicare beneficiaries.

What Are Part D Formularies?:

52 What Are Part D Formularies? Part D plans that follow the formulary classes and categories established by the United States Pharmacopoeia will pass the first discrimination test. However, CMS indicates it will still review formularies to determine whether the placement of specific drugs in each category or class, as well as other benefit design issues, discriminates against particular individuals. Plans can change the drugs on their formulary during the course of the year with 60 days notice to affected parties.

“Tiers” in a Medicare RX Formulary:

53 “Tiers” in a Medicare RX Formulary Many Medicare drug plans place drugs into different “tiers.” Drugs in each tier have a different cost. For example, a drug in a lower tier will cost you less than a drug in a higher tier. In some cases, if your drug is on a higher tier and your doctor thinks you need that drug instead of a similar drug on a lower tier, you can file an exception and ask your plan for a lower copayment. Formularies can change. Contact the plan for its current formulary, or visit the plan’s website.

“Tiers” in a Medicare RX Formulary:

54 “Tiers” in a Medicare RX Formulary In most cases the prescription drugs you get in an outpatient setting like an emergency room aren’t covered by Part B. Your Medicare drug plan may cover these drugs under certain circumstances. You will likely need to pay out-of-pocket for these drugs and submit a claim to your plan. Call your plan for more information.

How Much Will it Cost?:

55 How Much Will it Cost? Exact coverage and costs are different for each plan, but all Medicare drug plans must provide at least a standard level of coverage set by Medicare. Your actual drug plan costs will vary depending on the drugs you use, the plan you choose, whether you go to a pharmacy in your plan’s network, and whether you qualify for “extra help” paying your Part D costs.

An Actual Example:

56 An Actual Example Monthly Premium - Ms. Smith pays a monthly premium throughout the year. 1.Yearly Deductible 2. Copayment or Coinsurance 3. Coverage Gap 4. Catastrophic Coverage Ms. Smith pays the first $320 of her drug costs before her plan starts to pay its share. Ms. Smith pays a copayment, and her plan pays its share for each covered drug until what THEY pay (plus the deductible) is $2,930. Once Ms. Smith and her plan have spent $2,930 for covered drugs, she is in the coverage gap. She will have to pay all of her drug costs until she has spent $4,700. Once Ms. Smith has spent $4,700 out-of-pocket for the year, her coverage gap now ends. Now she only pays a small copayment (like $6) for each drug until the end of the year.

Qualifying For Drug Subsidies:

57 Qualifying For Drug Subsidies Almost 1 in 3 people with Medicare will qualify for extra help that will cover between 85% and almost 100% of prescription drug costs. SSA and state Medicaid offices, which are also authorized to take low income subsidy applications, will evaluate applications using criteria similar to the criteria used to evaluate applications for Supplemental Security Income (SSI). The reviewing agency will look at income for both the applicant and the applicant’s spouse who lives with the applicant, even if the spouse is not applying for a subsidy. Both unearned and earned income will be counted, though certain amounts will be disregarded for expenses related to the individual’s medical condition.

Qualifying For Drug Subsidies:

58 Qualifying For Drug Subsidies You may qualify for “extra help” (also called the low-income subsidy) from Medicare to pay prescription drug costs if your yearly income and resources are below the following limits for 2012: Income less than $16,335 and resources less than $12,640—Single person Income less than $22,065 and resources less than $25,260—Married person living with a spouse and no other dependents You may qualify if you have a higher income (like if you still work or if you live in Alaska or Hawaii).

Qualifying For Drug Subsidies:

59 Qualifying For Drug Subsidies If you qualify for extra help, and you join a Medicare drug plan, you will get the following: Help paying your Medicare drug plan monthly premium. Depending on your income and resources and your plan’s premium, you may pay a reduced premium or no premium for a basic plan. For an enhanced plan (a plan that may cover more drugs and generally has a higher monthly premium), you must pay more for the extra coverage.

Qualifying For Drug Subsidies:

60 Qualifying For Drug Subsidies When you qualify for help, you get … Help paying any yearly deductible. Help paying coinsurance and copayments for prescription drugs that are on your plan’s formulary (list of covered drugs). You generally pay all costs for drugs that aren’t on your plan‘s formulary. No coverage gap.

Qualifying For Drug Subsidies:

61 Qualifying For Drug Subsidies You automatically qualify for “extra help” if you have Medicare and meet one of these conditions: You have full Medicaid coverage. You get help from your state Medicaid program paying your Part B premiums (belong to a Medicare Savings Program). You get Supplemental Security Income (SSI) benefits.

What happens if you automatically qualify for “extra help?” :

62 What happens if you automatically qualify for “extra help?” Medicare will mail you a purple letter to let you know you automatically qualify for “extra help.” You don’t need to apply for “extra help” if you get this letter. Keep the letter for your records. If you aren’t already in a plan, you must join a Medicare drug plan to get this “extra help.” If you don’t join a drug plan, Medicare will enroll you in one. If Medicare enrolls you in a plan, Medicare will send you a yellow or green letter letting you know when your coverage begins. Different plans cover different drugs. Check to see if the plan you are enrolled in covers the drugs you use and if you can go to the pharmacies you want. Compare with other plans in your area.

What happens if you automatically qualify for “extra help?” :

63 What happens if you automatically qualify for “extra help?” You can switch to another Medicare drug plan at any time. Your coverage will be effective the first day of the next month. In most cases, you will pay only a small amount for each covered prescription. If you have Medicaid, Medicare will provide you with prescription drug coverage instead of Medicaid. However, some drugs that aren’t covered by Medicare prescription drug coverage may still be covered by Medicaid. Medicaid may still cover other care that Medicare doesn’t cover. If you have Medicaid and live in certain institutions (like a nursing home or long-term care hospital), you may pay nothing for your covered prescription drugs.

Qualifying For Drug Subsidies:

64 Qualifying For Drug Subsidies Excluded from consideration… The home in which a person lives and the land on which it is situated. The car in which they drive. Other non-liquid resources, business or other property necessary for support, housing assistance, and up to $1,500 set aside for burial expenses.

Qualifying For Drug Subsidies:

65 Qualifying For Drug Subsidies Unlike rules for Medicare Savings Programs, which allow for a family unit of only one or two, eligibility rules for  Part D subsidies will recognize larger family units, to the extent that those family members rely on the applicant or her spouse for one half of their financial support. Most people who qualify for extra help will pay no premiums, no deductibles, and no more than $5 for each prescription.

Qualifying For Drug Subsidies:

66 Qualifying For Drug Subsidies If a low-income subsidy application filed with SSA is denied, or if SSA decides to reduce or terminate a subsidy, the individual has 60 days to request administrative review by SSA.

Enrollment in Medicare Plan D:

67 Enrollment in Medicare Plan D Enroll early in the month to give the plan time to mail your membership card, acknowledgement letter, and welcome package before your coverage becomes effective. This way, even if you go to the pharmacy on your first day of coverage, you can get your prescriptions filled without delay.

Enrollment in Medicare Plan D:

68 Enrollment in Medicare Plan D Plans may have the following coverage rules: Prior authorization—You and/or your doctor must contact the plan before you can fill certain prescriptions. Your doctor may need to show that the drug is medically necessary for it to be covered. Quantity limits—Limits how many pills you can get at a time. Step therapy—You must try one or more similar, lower cost drugs before the plan will cover the drug your doctor prescribed. If your doctor believes that one of these coverage rules should be waived, you can ask for an exception.

What Are the Ways to Pay Your Medicare Drug Plan Premium? :

69 What Are the Ways to Pay Your Medicare Drug Plan Premium? You have choices in the way you pay your Medicare drug plan premium. Depending on your plan and your situation, you may be able to pay your Medicare drug plan premium in one of four ways: Deducted from your checking or savings account. Charged to a credit or debit card. Billed to you each month directly by the plan. (Some plans bill in advance for coverage the next month.) Deducted from your Social Security payment. Contact your plan (not Social Security) to ask for this payment option. With this option, your first deductions usually take 2 months to start, and 2 months of premiums will likely be collected at one time. For more information about your Medicare drug plan premium or ways to pay for it, contact your plan. Use the following resources to get more information about Medicare prescription drug coverage: Contact the plans you are interested in.

Changing Medicare Drug Plans::

70 Changing Medicare Drug Plans: Generally, you can only change plans under certain circumstances. You may switch between November 15 and December 31 every year. If you move, or enter a nursing home, you can switch plans at other times.

Factors to Consider When Choosing a Plan: :

71 Factors to Consider When Choosing a Plan: The amount of the monthly premium. Whether the plan formulary includes: The particular drugs need by the Medicare beneficiary. The strengths and dosages of the drugs need by the beneficiary. The number of days covered in each prescription. (Example: 30, 60, 90 days) Whether the pharmacies in the plan’s network include: The pharmacies used by the beneficiary. The pharmacy used by the long-term care facility in which the beneficiary resides.

Factors to Consider When Choosing a Plan: :

72 Factors to Consider When Choosing a Plan: Whether there are price differentials among pharmacies in the network. Whether mail-order is allowed or required. The price differential for mail order. The number of days covered in each prescription. (Example: 30, 60, 90 days) Left click to proceed

Factors to Consider When Choosing a Plan: :

73 Factors to Consider When Choosing a Plan: The plan’s utilization management tools. The prior authorization requirements. Whether the plan requires step therapy (Requirement that certain medication(s) be tried before that prescribed by the beneficiary’s physician). Whether the plan uses tiered cost sharing (Different co-pays for generics, brands, or for specific drugs). The number of tiers. The co-payments/co-insurance per tier. Whether the plan offers therapeutic substitutions. Whether there are quantity limitations. On number of prescriptions in a month. On number of pills in a prescription.

Factors to Consider When Choosing a Plan: :

74 Factors to Consider When Choosing a Plan: Whether the plan offers supplemental benefits. How the plan coordinates with the State Pharmaceutical Assistance Program (ConnPACE). Who is the plan sponsor, has the entity been in the community for a while, is it reliable? The “Transition” process used by the PDP (Temporary use of drug not covered by plan). The “Exceptions” process used by the PDP (Appeal if beneficiary’s drug is not covered by the plan).

Factors to Consider When Choosing a Plan: :

75 Factors to Consider When Choosing a Plan: Whether the individual has other insurance that covers prescription drugs … Through a Medicare HMO or other Medicare Advantage plan.  If so, the individual must keep getting drug coverage through that plan if she wants to stay in that plan. Through a retiree health plan.  If so, has the former employer told the individual whether the insurance is as good as or better than Medicare's coverage (i.e., "creditable coverage)?  If it is creditable coverage, the individual may stay in that plan without getting a late penalty on the premium if she later decides to change to a Medicare drug plan. Through a Medigap (Medicare supplemental) policy?  If so, has the insurer told the individual whether the insurance is creditable coverage?  If it is not, the individual will have to pay a late penalty on the premium if she keeps her Medigap drug coverage and later switches to a Medicare prescription drug plan. Individuals with coverage through the Veteran's Administration, TRICARE, Federal Health Employee Benefit Plan, Railroad Retirement Board, Program All-Inclusive Care for the Elderly (PACE), or Indian Health Service, may continue receiving prescription drug coverage through one of those plans if that coverage is as good as what is offered from Medicare prescription drug coverage.

What to Expect::

76 What to Expect: Standard amounts for deductibles, benefit limits, and catastrophic thresholds are indexed to rise with the growth in per capita Part D spending. The coverage gap between partial and catastrophic coverage (the donut hole deductible) is projected to increase from $2,850 in 2006 to $4,984 in 2014. The net federal cost of the new benefit is projected to be $37.4 billion in 2006 and $724 billion from 2006 to 2015 (HHS, Feb. 2005).

What to Expect::

77 What to Expect: Of the estimated 43.1 million Medicare beneficiaries, 29.3 million are expected to enroll in Part D plans in 2006. Figure 4 Of 14.5 million beneficiaries eligible for low-income subsidies in 2006, HHS expects 10.9 million to receive them. Another 9.8 million are expected to receive drug coverage comparable to Part D under an employer plan. Beneficiary education and counseling will be critical to promote informed decision-making and a smooth transition as the new drug benefit is implemented.

Tracking Polls on Medicare Drug Benefit::

78 Tracking Polls on Medicare Drug Benefit: A Kaiser Health Poll Report Survey found… One in three (32%) seniors have a favorable impression of the benefit and 32% have a negative one. Favorable views are up since April, when about one in five (21%) said they had a favorable impression of it. Overall, 37% of seniors now say they understand the new benefit “very” or “somewhat” well, up from 29% in April. 6 in 10 seniors (60%) say they don’t understand the benefit well or at all. Fewer than 4 in 10 (37%) say that the new drug benefit will be “very” or “somewhat” helpful to them personally, the same share as in April. Kaiser Family Foundation, 8/25/05 www.kff.org/kaiserpolls/med082505pkg.cfm

Slide 79:

79 If you… You might want a Med RX plan that… You might want to… …take specific prescription drugs that are important to your health. …covers the drugs you are taking now. …look at drug plans that have included your drugs on their formularies, then compare costs. …want extra protection for high prescription drug costs. …has a higher than average initial coverage limit and/or provides some coverage during the coverage gap. …look at plans that offer better than the standard coverage after your costs reach the doughnut hole deductible. …want your drug expenses to be balanced throughout the year. …has a zero or low deductible, so you aren’t paying a lot out-of-pocket at the beginning of the year. …look at plans with low deductibles. …use a lot of generic medicines. …offers generic medicines for a lower coinsurance or copayment than brand names. …look at plans with tiers that charge you nothing or low copayments for generic prescriptions. …don’t have many drug costs now, but want coverage for peace of mind and to avoid future penalties. …gives you the lowest premiums. …look for plans with zero or low monthly premiums for drug coverage. If you need prescriptions in the future, all plans still must cover drugs in all categories. …like the extra benefits and lower costs that you might get by getting your health care and prescription drug coverage from one plan. …is included as part of a Medicare Advantage Plan (like an HMO or PPO). …look for Medicare Advantage Plans with prescription drug coverage.

Slide 80:

80

Slide 81:

81

What Do We NOT KNOW, Yet?:

82 What Do We NOT KNOW, Yet? The extent to which private drug plans will be available. How much assistance will be provided for the drugs Medicare beneficiaries require?

Tips for Saving on Drugs:

83 Tips for Saving on Drugs Check to see whether cheaper generic brands are available. Compare prices by calling pharmacies or visiting their Web sites. Check prices of online pharmacies. Compare prices of capsules versus tablets. Ask you pharmacist to match lower prices. Buy in bulk, such as a 90-day supply. Check drug assistance programs offered by drug companies. Check federal programs, if you are eligible. Consumers Union offers best-buy drug reports at www.consumerreports.org/health. Source: Consumers Union www.consumersunion.org

Recommendation From Medicare::

84 Recommendation From Medicare: Make a list of all your current medications, including the name, dose size (ex: 2 pills, 300mg each), dosage frequency (ex: 2 times a day) and monthly costs of your current prescriptions. Use this information to compare the list of drugs (formularies) that are covered under each plan. Get the list of drugs a plan covers by calling the plan or by visiting the plan’s website. This information is available on the Medicare.gov website.

Reference Page:

85 Reference Page Centers for Medicare & Medicaid Services web pages www.medicare.gov, www.cms.hhs.gov/pdps/, www.cms.hhs.gov/medicarereform/ Social Security www.socialsecurity.gov Medicare Advocacy www.medicareadvocacy.org UnitedHealthcare web page www.medicarerxinfosource.com WebMD Health http://my.webmd.com/content/pages/16/98761.htm WebMD Health http://my.webmd.com/content/pages/16/98764.htm

Reference Page:

86 Reference Page The Henry J. Kaiser Family Foundation http://www.kff.org/medicare/upload/The-Medicare-Prescription-Drug-Benefit-Fact-Sheet.pdf The Henry J. Kaiser Family Foundation http://www.kff.org/medicare/rxdrugscalculator.cfm The Lewin Group http://webstudies.lewin.com/pdb/medicare2.htm Medicare Learning Network www.cms.hhs.gov/medlearn/matters Kaiser Family Foundation, 8/25/05 www.kff.org/kaiserpolls/med082505pkg.cfm

Medicare Prescription Drug Benefit:

87 Medicare Prescription Drug Benefit At this time, you may enter the ClassMarker website at http://www.classmarker.com/embedded_quizzes/?quiz=f7ee034b5b6411092c1a5e75def90186 For password type:  ces2010 Click on Enter. Provide the details requested on the following page. Click on “Start Test”. There is no time limit, however if you leave the test for some time, it may require you to begin again. It will show you (and I as the provider) your test results. Upon completion of the test, call me at 913-980-2348, and I will have you fax your signed affidavit to me. My FAX number is 816-987-0461. Upon receipt, I will fax your certificate to you and file the results with the Insurance Department!

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