Medicare and Part D

Federal Medicare Part D Update

November 7, 2006

Important Dates (these are expected dates and may not be exact):

September	Centers for Medicare Services (CMS) mails notices to beneficiaries who were deemed eligible (automatically considered to be eligible) for Low Income Subsidy (LIS) for 2006, but will not be in 2007.
October 1	Prescription Drug Plans send marketing materials.
Early October	Notices sent to beneficiaries whose plans won’t participate in 2007. Notices sent to deemed LIS beneficiaries whose co-pay amounts will change.
Mid October	Plan information available at 1-800-Medicare and www.medicare.gov.
End of October	Notices sent to LIS beneficiaries who will be reassigned to a new Part D plan due to changes in their current plan. All beneficiaries will receive the Annual Notice of Change from their plans. This should be reviewed carefully. There will be plan changes in formularies and coverage that could dramatically affect an individual’s plan choice.
Early November	Medicare and You Handbook mailed.
November 15– December 31	Annual Open Enrollment period. All beneficiaries should review options carefully to determine if they are in the best plan. Californians living with HIV should check the state’s premium assistance program before enrolling. Plan changes and enrollment should be done, if possible, by December 8 to ensure January 1, 2007 start date.
January 1, 2007	New plan year begins; plan reassignments and changes in LIS eligibility should be effective.

 

CMS Releases 2007 Part D Plan Information
Centers for Medicaid and Medicare Services (CMS), which oversees Medicare, has released information on 2007 Medicare Part D plans. There are 8 new national Part D plans making a total of 17 national plans. Choices have also increased in many states.

Information on plan formularies and coverage is available in the Medicare plan finder at www.medicare.gov. Finalized formulary information should be posted by November 13th. Beneficiaries should also have received the 2007 Medicare and You Handbook. Advocates have noted that there are discrepancies between the Handbook and the information on line. CMS says that on-line information is more reliable and more frequently updated than the written information provided in the Handbook.

Beneficiaries will receive an Annual Notice of Change from their plan. It will be essential for beneficiaries to review the notices carefully as plans may change benefits and cost sharing obligations in 2007. For example, Humana Complete offered coverage on all formulary drugs through the Medicare coverage gap (donut hole) in 2006. In 2007, Humana Complete will offer coverage on generic drugs only through the gap.

Getting assistance: If beneficiaries have questions about comparing and selecting plans, they should check with their local AIDS Service Organization to see if it offers help, if not people should contact their State Health Insurance Program (SHIP). Telephone numbers for SHIPs can be found online at www.medicare.gov. Go to “Find Helpful Phone Numbers” and then “Related Websites” and click on “State Health Insurance Counseling and Assistance Programs (SHIPS)”, from there most, but not all, individual state programs can be located

Cost Sharing Changes in 2007
All Medicare Part D cost sharing has increased in 2007. An analysis done by Congressman Waxman (D–CA) shows average premium costs increasing across the board, particularly for the least expensive plans. The amount of money individuals with no low income subsidy (LIS) assistance from Medicare will have to bear in order to reach a meaningful level of coverage has increased from about $3,600 plus premiums to about $3,850 plus premiums. Co-payments have also increased even for those with a LIS. Co-pays for those with full LIS will range from $1–$5.35 for each drug, rather than last year’s co-pay range of $1–$5 for each drug.

Open Enrollment for Medicare Part D is November 15–December 31, 2007
Will People Have to Re-Enroll in 2007?
Beneficiaries will receive information regarding plan changes in their Annual Notice of Change. Those who have reviewed the 2007 version of their plan and want to continue in their current plan do not have to take any action. They do not have to re-enroll. However, before deciding to stay in the same plan, beneficiaries should carefully read the plan changes and check the plan’s year 2007 formulary, requirements and costs to be sure it is still the best plan for them.

If people have questions about their plan, they should compare it to other plans before making decisions. To get assistance, people should refer to “getting assistance” in the first section of this information. Beneficiaries who want to make changes can do so during open enrollment period of November 15 - December 31, 2007. CMS advises making changes by December 8, 2006 to ensure coverage by the start of the new plan year, January 1, 2007.

Full benefit dual eligibles can change plans at any time during the year but should also make their changes by December 8 if possible.

Plan Re-Assignment for 2007
Most LIS beneficiaries were either auto-assigned or auto-facilitated to plans in 2006. Some elected to change plans in 2006.

According to CMS, two categories of beneficiaries will be re-assigned in 2007:

• LIS beneficiaries who are still in their original assigned plan if the plans’ premiums are more than $2 above the 2007 benchmark (the average plan cost in a region), and
• And all LIS beneficiaries whose plan is no longer offered in 2007.

Again, according to CMS reassignment will not be done for people who either changed their original plan or were not auto-enrolled in 2006, if their plan is still offered but is above the benchmark. They should receive notice of the increased premium but if they take no action, they will pay the difference between the benchmark and the new plan premium. If a plan is not being offered at all in 2007, all LIS recipients will be reassigned to a new plan.

To complicate the reassignment process further, not all plans will follow the process outlined above. If people are going to a new plan that is offered by the same sponsor of their old plan (this means the plan name changes but the company that offers the plan remains the same), they may be reassigned regardless of whether they were originally auto-assigned or auto-facilitated.

CMS is responsible for reassignment and will mail notices to some people on blue paper. The notices are expected to get to beneficiaries in early November. But not all beneficiaries who are being reassigned will get a blue notice from CMS. Some will receive notices from the plan sponsors (not necessarily the plan they are currently enrolled in) along with their annual notice of change and other information. Those notices may or may not be on blue paper.

If beneficiaries know they are being re-assigned they should look over the new plan benefits and cost sharing obligations and ensure that the plan works for them. If it works; no action is necessary. If it doesn’t they will need to compare plans and make a different enrollment decision.

Many beneficiaries may not be aware that they are being reassigned. All beneficiaries should be urged to review their 2007 plan information even if they believe they are staying in the same plan. Full dual eligibles should be reminded that they can change plans each month if they find themselves in a plan that doesn’t work for them in January.

Everyone should be aware that some of the same problems they saw with auto-enrollment could occur with re-assignment including delays and problems with processing enrollments and LIS, and difficulty getting their drugs.

Low Income Subsidies (LIS) or Extra Help for plan year 2007
Dual Eligibles: People who are full dual eligibles (eligible for Medicaid and Medicare, including those who are in Medicare Savings Programs) are deemed eligible for the Low Income Subsidy (LIS) or assistance provided by Medicare to cover some of the cost burdens of the Part D benefit. They do not have to apply separately. CMS is charged with ensuring that LIS will continue for plan year 2007.

Starting in July 2006, anyone eligible for their state Medicaid program and Medicare will be deemed eligible for full LIS in their Medicare Part D plan. CMS will check every month from July 2006 to December 2006 for eligibility. Those in a medically needy program who meet spend down or share of cost in any one month from July 2006 to December 2006 will be deemed eligible for the full LIS for the Medicare plan year 2007.

People in Medically Needy Programs with a spend down or share of cost that is not met during the eligibility months: Those who were deemed eligible for LIS for 2006 and will not be deemed for 2007 should have received a letter from CMS in September advising them that they have to apply for the LIS in order to receive it. The letter will include an application for LIS with a stamped return envelope.

Many people living with HIV who are in medically needy programs may have had their spend down or share of cost paid by the AIDS Drug Assistance Program (ADAP) in 2005. With the advent of Medicare Part D in 2006, ADAP no longer was able to pay the Medicaid spend down or share of cost.

Because Medicare now pays for drugs, it is unlikely that many will incur their Medicaid spend down during the qualifying months and they will receive the letter advising them to apply for LIS. Even if beneficiaries don’t meet the LIS criteria, they should apply. It is important to keep copies of all interactions with Medicaid or Medicare. In California, people will need to show that they have applied for LIS to continue their ADAP assistance. Other state ADAPs may also have that requirement.

People who no longer qualify for LIS in 2007 have a three month special enrollment period (SEP). People losing LIS on January 1, 2007 will be able to change, enroll or drop plans once between January1, 2007 and March 31, 2007.

People who applied and qualified for their LIS: The Social Security Administration (SSA) is charged with reviewing eligibility for people who applied and qualified for LIS before May 2006. Those who qualified after May won’t be reviewed until August 2007. SSA has sent a letter explaining the process and asking people to review what SSA currently has on file for their income and assets. If their income and assets remain the same, they do not need to take action

If it has changed, they should have returned the form to CMS within 15 days. CMS sends another letter and form. People must fill out the form and return it to SSA within 30 days in order to continue their LIS assistance.

SSA sent out more than a million letters in the first couple of weeks of September 2006.

No Enrollment for 2006 Coverage through Web or 1-800-Medicare
2006. CMS has instructed new beneficiaries or those new to Part D to enroll directly with plans, but advocates have reported that many plans are refusing to enroll new clients until the annual open enrollment period starts, on November 15, 2006.

Beneficiaries who are unable to enroll could face late enrollment penalties. Therefore, it is important to report plans that will not take new enrollments to 1-800-Medicare and to document attempts to enroll with plans. Advocates have found that persistence with plans, reminding them that they do have to take new enrollments for 2006 has worked in some cases.

Problems with Medicare Part D Premiums
Paid Directly from Social Security Checks
People who pay a premium for their Medicare Prescription Drug plan can pay it directly to the plan or have it withheld from their monthly Social Security checks. The choice is made on the Part D plan application. We advise people not to have their premium payments withheld because of the number of errors associated with this mechanism. Beneficiaries who choose the withholding option should watch their Social Security checks closely. If problems arise, notify the plan and CMS.

A recent error resulted in 230,000 people mistakenly receiving a premium refund in their August Social Security check. The refund was either a check or a direct deposit to their bank account. CMS has sent a letter to these beneficiaries explaining how they can return the money. However, the letters didn’t fully explain beneficiaries’ rights.

The Center for Medicare Advocacy filed a lawsuit alleging that CMS did not give adequate notice concerning their rights for repayment to people who received mistaken Social Security overpayments. A preliminary injunction was granted. For the time being beneficiaries shouldn’t take any action on repayment until CMS sends additional information.

In addition to the mistaken refunds, some people who have switched plans continue to have premiums withdrawn from their checks for the plans they dropped. Some have had delays in the withdrawal causing a very large amount representing several months’ premiums to be taken out of one check, causing them financial hardship. Others have opted to have premium withdrawals from their checks but are still receiving bills from their Medicare Part D plan. Some who should have their premium covered by their LIS are having premiums withdrawn from their check.

People who experience a problem with premium withdrawal should contact CMS at 1-800-633-4227. For further information, check the updates available at National Senior Citizen Law Project at www.nsclc.org.

Transition Drug Coverage in 2007
CMS issued a transition coverage memo for 2007 in early November. Beginning in 2007, plans have to give a beneficiary a 30 day supply of any medication they are currently using once within the first 90 days of coverage under a new plan, or after the plan changes its formulary to exclude or restrict a drug.

If people are remaining in the same plan, but the plan is making a formulary change that affects them, the plan is encouraged to provide an effective transition process or an exception review before January 1, 2007. If a plan is not in place by that date, the beneficiary is entitled to the same transition policy as a new member.

It is not as clear what happens if a person has an exception that is pending for more than 30 days. In that case, CMS “expects”, but doesn’t require, the plan to provide on-going transition coverage on a case by case basis.

Getting Through the Part D Gap (or Donut Hole)
Many people living with HIV will have help from ADAP through the Medicare Part D coverage gap or donut hole. However, in some states, ADAP may not be able to assist or people may not qualify. People without assistance will face difficult cost burdens and be looking for help with costs. CMS published tip sheets on how to find assistance during the coverage gap. The tip sheet for beneficiaries can be found at www.medicare.gov.

Unfortunately there are mistakes in the information and some of it is misleading. Before relying on the tip sheet for Guidance, see the Center for Medicare Advocacy’s analysis at www.medicareadvocacy.org.

Additionally, the CMS materials provide a link to a website (www.rxassist.org) that lists pharmaceutical patient assistance programs that may be available to Medicare Part D beneficiaries. (PAPs are patient assistance programs that provide free or low-cost drugs to people who can’t access them any other way.) However, this information may not be up to date or entirely accurate. The link provides a good starting point to check on coverage but calling the individual PAP is the best way to get accurate information.

New Medicare Beneficiaries Who Also Receive Medicaid (Medi-Cal in California)
On July 21, 2006, CMS advised states that it wasn’t necessary to tell Medicaid beneficiaries who were becoming eligible for Medicare that their Medicaid prescription drug coverage was being terminated. Prior to that, state Medicaid programs had to let newly eligible Medicare beneficiaries know that their Medicaid prescription coverage was ending in advance of actually ending the benefit. Now some beneficiaries may have their Medicaid coverage ended without notice.

People who find themselves cut off from their Medicaid coverage without having a Medicare plan should ask their pharmacist to use the Point of Service option (called Wellcare or Anthem) to enroll them in a plan so that they can get their medications.

The Politics of Medicare Part D
There continues to be major problems with Medicare Part D that can only be resolved by Congress. With the advent of the new Congress there may be opportunities to fix some of the Medicare problems. Among many general issues, advocates have called on Congress to delay the penalty for late enrollment in Medicare Part D due to the confusion and difficulty of getting information during the rollout of Part D. In addition, although people affected by Hurricane Katrina were granted a waiver of the late enrollment penalty, people affected by Hurricane Rita were not. Congress failed to address either of these issues before it went on recess and advocates are urging them to address it upon their return.

Others have advocated allowing Medicare to negotiate directly with the manufacturers of pharmaceuticals for lower prices for drugs. The Low Income Subsidy (LIS) doesn’t reflect the cost of living in various areas of the US, nor does it account for individuals who spend a large percentage of their income on un-reimbursed medical expenses. Reconsidering the LIS criteria could be very helpful to many who can’t afford the cost burden associated with Medicare Part D. Many advocates feel strongly that there should be at least one plan option in every state that offers coverage through the doughnut hole.

Specific to HIV, ensuring that the six protected classes of drugs remain protected will be very important. Allowing ADAP assistance to count toward True Out of Pocket (TrOOP) expenditures in Medicare would be also of great assistance to people living with HIV.

On another note, Congressman Waxman sent a letter to Secretary Leavitt regarding what he and his staff believe to be inaccurate claims on the costs of Medicare. Congressman Waxman claims that rather than the costs remaining stable or decreasing as CMS has publicly claimed, Mr. Waxman’s staff’s analysis shows costs increasing for Medicare Part D beneficiaries. The letter can be viewed at www.democrats.reform.house.gov.

New Resources
The National Senior Citizens Law Center published two new Part D resources, Medicare Part D Exceptions and Appeals: A Practical Guide and Medicare Part D Comparison of PDP and MA-PD plans Enrollment, Change of Enrollment and Disenrollment. They are available at www.nsclc.org by clicking on the appropriate “quick link”.

Thanks to the National Senior Citizens Law Center for their research on many of these issues.