Covering Medicare’s Part D prescription benefit

Interactive Roundtable on Medicare Part D Presented by the Association of Health Care Journalists and the Kaiser Family Foundation The live webcast is over, but still viewable on the Kaiser Family Foundation's Web site. Be prepared to help your readers, viewers and listeners. Tune in to a special health care roundtable focusing on the new Medicare prescription drug benefit known as Part D, designed to help Medicare beneficiaries pay for their medications. This webcast – a partnership between AHCJ and the Kaiser Family Foundation – will allow you to ask questions via e-mail and telephone. Or just listen and learn. Among the questions our experts will address: Who should sign up for the benefit? At what point does it make financial sense not to sign up? What are the options people have for covering their prescription costs? How do drug plans vary? What kind of coverage will be available to fill the so-called donut hole? How do people fit the new benefit with health insurance they already have? Moderator: Trudy Lieberman, director, Center for Consumer Health Choices, Consumers Union and president of AHCJ Panelists: Juliette Cubanski, senior policy analyst, Kaiser Family Foundation Tom Paul, chief pharmacy officer for Ovations, a UnitedHealth Group Company and president of Pharmacy Solutions Vicki Gottlich, attorney, Center for Medicare Advocacy Please note: The program is accessible via webcast on the Internet and not via teleconference. If you have never viewed a webcast before, please read these instructions .

As you know, this is a big year for Medicare. In the fall, the federal government will ask Medicare beneficiaries to sign up for the new Part D prescription benefit that kicks in Jan. 1. The benefit was created under a federal law passed in 2003.

Expect widespread confusion among the many seniors and disabled people eligible for the Medicare program. Many of you will be asked to write or broadcast reports that clarify the situation.

To give you a jump start on this mess, here's a timeline put together by AHCJ. There's also a longer timeline put together by the Kaiser Family Foundation. We hope this helps:

May 27, 2005 — The government (specifically, the Social Security Administration) will start sending mailings to low-income Medicare beneficiaries eligible for a subsidy. The recipients won't all get the mailings at the same time; instead, they will be staggered out over 2 1/2 months.

The order in which people will receive them will depend on the last two digits of their social security numbers. That means that in your hometown, some people will get the mailings right away. Others won't get them until as late as mid-August.

These mailing are particularly important to low-income Medicare beneficiaries who are NOT dual eligibles.

Dual eligibles are people who are enrolled in both Medicare and Medicaid. These people have been getting their drug coverage through state Medicaid programs, and will automatically be enrolled in new Medicare Part D prescription plans. The dual-eligibles who are switched over will not have to pay premiums or deductibles when the new Part D benefit kicks in.

Dual eligibles will be getting the SSA mailings, but won't have to do anything about it.

But there's another group of Medicare beneficiaries, with incomes below 150 percent of the federal poverty level, who are not enrolled in Medicaid but are eligible for the subsidies. They will have to apply for the subsidies, at their local Social Security or state Medicaid offices. They can also apply online or by phone. The government is asking them to apply before Jan. 1.

These non-dual eligibles can apply for government subsidies to help them pay the Part D monthly premium (currently estimated to cost about $37) and annual deductible ($250). Non-dual eligibles with incomes less than 135 percent of the federal poverty level will pay no premiums or deductibles. Non-dual eligibles with incomes between 135 and 150 percent of the federal poverty level will pay reduced premiums and deductibles.

Later, in November, all of these non-dual eligibles will also be asked to choose a Part D plan.

June 20, 2005 — CMS mails informational letters to dual eligibles regarding transition to Medicare plans.

July 1, 2005 — State Medicaid offices and local SSA offices begin accepting applications for low-income subsidies.

Sept. 16, 2005 – Medigap plans will begin informing policyholders whether those plans are "creditable" – i.e., if they are actuarially equivalent to the Medicare plans. These people can continue their Medigap drug coverage if they want, but should know that if their coverage is not creditable, the policyholders will face late-fee penalties if they switch from the Medigap plan to a Part D plan after May 15. New Medigap policies that offer a drug benefit will not be sold after Dec. 31.

Oct. 1, 2005 — Approved Medicare Part D plans begin marketing efforts. The drug plans will be sold to the public by private companies.

Nov. 15, 2005 — This is a big day.

Medicare beneficiaries can begin enrolling for the drug benefit. They have until May 15 to make a choice before late sign-up penalties kick in.

Also on this day, employers that currently sponsor prescription drug coverage for retirees will have to begin notifying the retirees whether the plans are "creditable" – i.e., if they are actuarially equivalent to the Medicare plans.

Retirees should pay attention to this: If an employer-sponsored plan is not creditable, the retirees will face late-fee penalties if they switch from the employer plan to a Medicare plan after May 15. If the coverage a retiree has through an employers' plan is creditable, then there will be no penalty for a later switch.

Dec. 31, 2005 — Medicaid coverage for dual eligibles ends. So does the Medicare drug discount card program.

Jan. 1, 2006 — Another big day. The Part D prescription benefit begins.

Feb. 25, 2006 — States begin making clawback payments for federal government for dual eligibles.

What's a clawback? In 2006, state Medicaid programs no longer will have to pay the costs for dual eligibles' prescriptions. But the federal government isn't letting the states completely off the hook for those costs.

The feds will require states to pay Washington 90 percent of the dual eligibles' drug costs, at least initially. Gradually, these clawback payments will drop to 75 percent.

 

For more information, here are two sources who can help with the basics:

Craig Palosky, spokesman Kaiser Family Foundation 202-347-5270, www.kff.org

Peter Ashkenaz, spokesman, U.S. Centers for Medicare & Medicaid Services 202-690-6149, www.cms.gov