PI Perspective #40

January 2006     View PDF     En español

Understanding Medicare Part D

Getting started: the standard Medicare benefit
Everyone who gets Medicare is eligible for prescription drug coverage through the standard benefit. Under the standard benefit, you are responsible for a plan premium (the amount you pay to keep your plan benefits). The average premium nationwide is $32.20 per month for 2006. Some plans will have higher premiums, some lower. Once the premium is paid, you are responsible for a $250 deductible before you start getting coverage for your drugs.

From $251 to $2,250 in total drug cost, Medicare will pay 75% of the cost; you will pay 25%. At $2,251 in total drug cost, you reach the coverage gap, or donut hole. You are responsible for all of your drug costs until you reach $5,100 (including your deductible). At that point, you reach the catastrophic coverage level and Medicare pays about 95% of your drug costs. You will then be responsible for the greater of 5% of your drugs or $2 for generic and preferred brand name drugs that are multi-sourced and $5 for all others.

Medicare also offers extra help or a low-income subsidy to all who qualify. People who have both Medicaid and Medicare and some others automatically qualify for extra help. Others must apply. People who have incomes at or below $15,000 for an individual and $20,000 for a married couple may qualify and should apply. Extra help is based on both income and financial assets. It will get rid of the donut hole or coverage gap and make a significant difference in how much you have to pay for your drugs. It is very important that you apply if you think you might qualify.

Enrolling in the Medicare prescription drug benefit
If you have Medicare and get your prescription drugs through Medicaid (known as Medi-Cal in California), your drug coverage will automatically change from Medicaid to Medicare on January 1, 2006. You will no longer have Medicaid coverage for most of your prescription drugs. You will be automatically assigned to a Medicare plan in October, 2005 and if you don’t make changes, you will be enrolled in that plan in late December 2005.

If you have only Medicare and get your drugs from the AIDS Drug Assistance Program (ADAP) or pay for them yourself, you have until May 15, 2006 to sign up for the new benefit. After May 15, you will pay 1% more for your coverage for each month you delay signing up. However, if you need assistance from ADAP to cover costs associated with Medicare, you will have to sign up for a Medicare plan before you can continue to get ADAP benefits.

If you have Medicare and another type of insurance that pays for your prescription drugs, you may sign up for Medicare Part D or keep your other insurance. To avoid the late sign-up penalty, be sure that your plan is similar to the Medicare benefit. You should receive a letter from your plan outlining your options but if you have not been contacted, the only way to be sure that your plan qualifies as similar is to check directly with the plan.

If you receive your healthcare through the Veteran’s Administration, this new benefit should not change the way you get your prescription drugs.

Choosing a Medicare drug plan
The Medicare benefit allows you to get drugs through either private plans that will provide just your prescription drugs (known as prescription drug plans—PDPs) or private managed care plans that offer you healthcare and prescription drugs (known as Medicare Advantage Plans with Prescription Drug coverage—MA-PDs).

Everyone will have at least two plans to choose from; but depending on where you live, you could have more than 40. Each plan will have a different list of drugs (formulary). All anti-HIV drugs will be included on all formularies. However, other drugs you need may not be. Plans will also have different costs, including different premiums and different co-pays for individual drugs. If you qualify for extra help, some of these costs will be paid for you. In most places, you will also have to decide if you will use a stand alone prescription drug plan or a managed care plan that also offers prescription drugs. If keeping your doctor is important to you, you should discuss choices with your doctor as well.

Information about plans will be available at www.medicare.gov in October 2005. As well, a Medicare and You 2006 handbook with information on plans in your area will be mailed to you. The handbook does not have enough information to make a good plan choice but will be a starting point for your decision-making process. Additionally, the handbook has a mistake in it regarding extra help. It states that if you qualify for extra help, it will pay the entire premium in all plans. In fact, it will cover only some premiums completely. The website will have the correct information. You can also call 1-800-MEDICARE for information.

If you have Medicaid and Medicare, you will be automatically assigned to a plan in October. If you don’t make any changes, you will be enrolled in that plan in December. If that plan doesn’t meet your needs, you can choose a plan that works for you starting November 15, 2005. You may change your plan as often as you need to.

If you have Medicare only or Medicare and ADAP, you can sign up for a plan starting November 15, 2005. However, once you make your decision, you have to stay in that plan for the entire year, so it is important to make a careful and informed decision.

How ADAPs will work with Medicare Part D
ADAP is allowed by law to cover premiums, deductibles, co-insurance and co-pays. However, not all ADAP have the money or the set up to pay all these cost-sharing obligations. Each state ADAP will make a decision about what assistance it can provide to Medicare beneficiaries. The requirements for receiving assistance will also differ by state. To find out how your state ADAP will work with Medicare, call your ADAP and ask for their policy. Be aware that the policy may not be in place yet, and ask how you can find out when it will be.

Getting help
You will need much more information about this important and complex benefit in order to make good decisions. HIV-specific information on Medicare Part D can be found at www.taepusa.org. General information can be found at www.medicare.gov, www.medicareadvocacy.org and www.cms.hhs.gov. You can also get general information by calling 1-800-MEDICARE.

Information specific to California can be found at www.sfaf.org. Information specific to New York can be found at www.gmhc.org. Check with community-based organizations and on the above websites for updates.

The Medicare prescription drug benefit is very complex. Many people will find it hard to make all the necessary decisions on their own. If possible, consult with a friend, advocate, case manager or benefits counselor. Your medical provider or pharmacist may have information on the benefit. Check for Medicare workshops in your area as well. Although it may at first seem overwhelming, it is very important to make good decisions about what plan will best fit your needs and search out additional coverage for costs you can’t afford.

Anti-HIV Drugs In Brief

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