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Medicare Drug Benefit Update: 2007 Open Enrollment Period Begins Today; New Plan Options Available
November 15, 2006
Today the Medicare Part D Open Enrollment period begins for 2007. Between today and December 31, Medicare beneficiaries will be able to make plan selections for prescription drug coverage for calendar year 2007. In order to avoid a repeat of enrollment verification and transition problems that occurred at the pharmacy counter in the early days of January 2006, Medicare is ensuring that all beneficiaries that enroll in drug plans before December 8 will have their coverage guaranteed effective on January 1, 2007.
This "open season" process that starts today and runs through December 31 and allows enrollees to switch plans, or stay in the same plan they had for 2006. For 2007, many of the Medicare prescription drug plans changed coverage options by:
- Changing premiums and cost sharing,
- Adjusting formularies (the list of covered drugs),
- Moving specific drugs to different cost sharing tiers, or
- Imposing different utilization management policies on specific medications (prior authorization, step therapy, quantity limits, etc.).
If a Medicare drug plan made any of these adjustments to their coverage policies for 2007, then they were required to notify all enrollees in writing by October 31 through an “Annual Notice of Change” or ANOC letter. In addition, Medicare has also been sending notices of changes in coverage in recent, especially for dual eligibles whose status as “Low Income Subsidy” is changing (see details below).
How to Find Out if Your Rx Coverage is Changing?
Most Medicare beneficiaries who are happy with their prescription coverage will not have to switch plans in 2007. As noted above, any change in premiums, cost sharing or coverage of specific drugs required notice in writing by October 31. In addition, all Medicare beneficiaries can explore different coverage options for 2007 through several web-based search tools offered by CMS (the Centers on Medicare and Medicaid Services, the federal agency that administers Medicare).
The plan "landscape" that lists available drug plans by state is available from Medicare.gov.
The Medicare personal plan finder allows a beneficiary, family member, case manager or counselor to compare available plans on the basis of cost and coverage of specific medications.
Finally, the CMS "formulary finder" allows a beneficiary, family member, case manager or counselor to search plans on the basis of placement of specific medications on a formulary:
NAMI Guide to Medicare Drug Plans
NAMI is now compiling – and will soon be publishing – a rating and assessment of the major Medicare prescription drug plans. This report card will rate the major plans on the basis of they provide access to (or restrict access to) medications prescribed to treat serious mental illness including anti-convulsants, anti-depressants and anti-psychotics. It is important to note that for 2007 (as in 2006) all Medicare drug plans are required to provide coverage for "all or substantially all" of the medications in these three therapeutic classes.
Drug Plan Choices for Dual Eligibles and Low-Income Subsidy
A key priority population for NAMI in the drug benefit remains the 6.2 million extremely low-income Medicare beneficiaries simultaneously eligible for Medicaid in their state (also known as dual eligibles) and the nearly 2.8 million Medicare beneficiaries receiving “extra help” or the Low-Income Subsidy (LIS).
In most states, as many of 40% of dual eligibles have a serious mental illness. These dual eligible individuals will continue to participate in the Medicare drug benefit on a mandatory basis. LIS recipients applied for (or were deemed eligible for) a deep subsidy that makes coverage affordable. So long as dual eligibles selected a drug plan that is "at or below benchmark," they are able to access coverage with no monthly premium, no annual deductible and no gap in coverage (the so-called "doughnut hole" gap), with their only costs being $1 for a generic and $3 for a brand name prescription. Likewise, LIS recipients that select a plan "at or below benchmark" access drug coverage with no monthly premium (or in some cases, discounted premiums), no deductible, no "doughnut hole" gap in coverage and cost sharing limited to $3 for a generic and $5 for a brand name.
Because of the lower than projected premiums, in some states the cost of the average "benchmark" plan has gone down for 2007. As a result, some dual eligibles and LIS are in drug plans for 2006 that will not be "at or below the benchmark" for 2007, i.e. they will not be able to re-enroll in these plans in 2007 at the $0 premium level. There is also a $2 de minimus threshold whereby if a plan is $2 or less above the new 2007 benchmark, the higher $2 premium is waived.
For those dual eligibles in plans shifting above the benchmark (for which dual eligibles can no longer enroll with a $0 monthly premium), CMS is planning to automatically re-assign them to a new drug plan with the same sponsoring organization or with an identical formulary list in an attempt to avoid disruption. It is important to note that if a dual eligible switched to different plan in 2006, CMS will NOT disenroll them from that plan.
CMS has already sent out written notices to all dual eligibles that may be subject to this re-assignment for 2007 – these re-assignment letters were all mailed by October 30 and were printed on blue paper. In other words, if you (or a family member) are a dual eligible or LIS recipient and you have not received this blue letter from CMS, then you will continue in the same drug plan for 2007. Finally, all dual eligibles who switch plans for 2007 will get an automatic 30 day initial transition period during which their new plan must automatically refill all of their prescriptions.
"Re-Deeming" of Certain Dual Eligibles
There are some low-income Medicare beneficiaries who had dual eligible status in 2006, who will not in 2007. These are individuals that prior to 2006 qualified for Medicaid in their state as a result high medical expenses and "spend-down" eligibility. Most of these dual eligibles were automatically enrolled in a Part D plan for 2006.
For 2007 however, many will not have dual eligible status because they never reached the Medicaid "spend-down" level in 2006. Others have experienced some other "change in status" that has prevented CMS from "deeming" them (making them automatically) eligible for LIS or dual status in 2007.
These individuals will need to send in a new application for the Medicare Part D "Low Income Subsidy" (LIS) in order to access affordable drug coverage for 2007 (in most cases, coverage with no monthly premium, no deductible, no gap in coverage and as little as $3 for a generic, and $5 for a brand name prescription). A number of Part D drug plan sponsors have already announced their intentions to provide a 90-day grace period in which higher cost sharing and deductibles will not be assessed against anyone losing "deemed" dual eligible or LIS status. Further, CMS is providing a special 90-day open enrollment period (through March 31, 2007) under which low-income beneficiaries losing automatic dual eligible for LIS can select a different drug plan if they wish.
Notices from CMS to these "deemed" individuals were sent in September, with an LIS application and postage paid envelope. For more information on this important issue, view the resources below:
Introduction to the Re-deeming Notice: Loss of (Extra Help) Status Version (PDF, opens in a new window)
Low Income Subsidy (LIS) Redetermination Q&A (PDF, opens in a new window)
More Web-Based Tools Available
In addition to the resources listed above, more web-based information about the Medicare prescription drug benefit is available through the following links. The new "My Health/My Medicare" Campaign designed to promote on-line personalized information:
My Health/My Medicare