November 16, 2005
As of November 15, Medicare beneficiaries can begin signing up for prescription drug coverage. The actual benefit goes into effect on January 1, 2006 and the initial enrollment period will run through May 15, 2006. As is being widely report in the press, the drug benefit offers multiple plan options that many elderly and disabled beneficiaries are finding confusing and overwhelming. Much of this confusion stems from the wide variation in coverage options and costs that vary across separate geographic regions.
Coverage under the Medicare drug benefit (known as Part D) is voluntary for most beneficiaries, except for extremely low-income beneficiaries who are concurrently eligible for Medicare and their state Medicaid program. These vulnerable beneficiaries (approximately 1/3 of whom have a severe mental illness) will be automatically assigned to Part D drug plans to ensure continuous coverage starting on January 1, 2006.
Help for Medicare beneficiaries in making decisions about enrollment and which specific drug plan to select is available from the Centers for Medicare and Medicaid Services (CMS). The official Medicare website (www.medicare.gov) contains two separate search tools that can sort through available plan options and search for coverage of specific medications across all available plans. Problems with the speed and information on these websites have been reported and some beneficiaries may want to consider calling 1-800/MEDICARE (1-800/633-4227) and seek direct one-on-one assistance. By calling this number, beneficiaries can get (by mail) a personal profile of the three least expensive drug plan options available to them that discloses specific costs for enrollment, coverage for the specific drugs they have been prescribed and available pharmacies in a plan's network.
In order to get this personalized profile of drug plan options, beneficiaries will need to provide their Medicare enrollment number, zip code, their list of drugs (with specific dosages) and their preferred local pharmacy. All information provided is protected by confidentiality and is not retained by CMS. The beneficiary option profile will disclose monthly premiums, deductibles, and how various plans cover each prescribed drug (placement on the plan's formulary, cost sharing, and whether a medication is subject to prior authorization or other access restriction). The profile will also detail whether or not a preferred local pharmacy is part of a given plan's network.
Additional on-line resources are available to assist Medicare beneficiaries with mental illness in selecting a drug plan including:
Starting last week, CMS began forwarding "auto-enrollment" notices to dual eligible beneficiaries. These notices include disclosure of the specific drug plan that each dual eligible has been assigned to. Once assigned to a plan, a dual eligible can switch to an alternative drug plan at any time (either prior to January 1, or any time after), so long as it is at or below "benchmark." Benchmark plans are those at or below the national average in terms of cost. In every region of the country, there are at least six plan options.
Once enrolled in a Medicare drug plan, dual eligibles will receive comprehensive drug coverage with no monthly premium, no annual deductible, and no gap in coverage. The only costs imposed on drug coverage for dual eligibles will be $1 for generic prescriptions, and $3 for brand name prescriptions. Drug plans that enroll dual eligibles will be required to provide immediate coverage for all medications that were prescribed to an individual as of December 31, 2005 (this requirement is known as "continuity of care"). The text of the letter CMS is forwarding to dual eligible beneficiaries can be viewed here.
For Medicare beneficiaries who are low income, but above Medicaid eligibility (i.e., below 150% of poverty, or just over $14,000 for an individual and just over $19,000 for a couple), deep subsidies are available to purchase drug coverage. These subsidies will allow most who qualify to get coverage with little or no premium, no annual deductible, and cost sharing limited to $2 for generic medications and $5 for brand name medications Beneficiaries who think they qualify for this assistance can apply through the Social Security Administration. Applying for the low-income subsidy is separate from enrollment in a drug plan.
Beyond coverage for dual eligibles and individuals eligible for the low-income subsidy, the coverage options vary widely. In most states, coverage is available at premiums as low as $10 to $15 per month. Some Medicare Advantage (MA) plans (HMOs & PPOs that offer comprehensive coverage) are offering drug coverage with no additional monthly premium. Nationally, premiums average about $30 per month with a maximum allowable annual deductible of $250. Plans are allowed to impose a gap in coverage between $2,500 and $3,600 on drug costs (the so-called "doughnut hole") in which beneficiary cost sharing is 100%. Above the catastrophic cap of $3,600, plans will cover approximately 95% of drug costs. Not every plan is imposing the doughnut hole, and many high premium plans are offering uninterrupted coverage below $3,600.
Individuals above 150% of poverty who do not enroll in a drug plan before May 15, 2006 could face a late enrollment penalty that compounds over time if they did not have other coverage (e.g. that offered by a former employer) as good as coverage available under Part D. Medicare beneficiaries with existing alternative drug coverage (including retiree coverage, veterans benefits, military coverage, etc.) are allowed to keep that coverage and can later enroll in a Part D plan and pay no penalty.
CMS is requiring every Part D drug plan to cover "all or substantially all" of the medications within six specific therapeutic categories. Among these categories are anti-depressants, anti-psychotics, and anti-convulsants. As a result, coverage for medications to treat major mental illnesses such as schizophrenia, bipolar disorder, and major depression is expected to be broad and comprehensive. Further, within these six therapeutic classes, plans will be limited in their ability to impose access restrictions such as prior authorization, step therapy, and "fail first" to "extraordinary circumstances" (for clinical reasons, as opposed to simply higher cost).
At the same time, the law authorizing the Medicare Part D benefit does include an important mandatory exclusion. This exclusion bars drug plans from offering coverage of benzodiazepines, including a number of medications commonly prescribed to treat acute mania in bipolar disorder and severe anxiety disorders. However, CMS is allowing states to continue to use Medicaid as a supplement and cover benzodiazepines for their dual eligible population.
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