April 28, 2006
On April 27, the federal Centers for Medicare and Medicaid Services (CMS) released new guidelines requiring Medicare drug plans to continue covering medications for any beneficiaries already enrolled in the plan after a plan removes a medication from its list of covered drugs (also known as a formulary). This change is in response to concerns raised by NAMI and other patient advocacy groups about the ability of drug plans to change their formularies – by removing a drug or imposing higher cost sharing for a specific drug – in the middle of a plan year, with only 60 days notice.
Under the announced change announced, if a drug plan seeks to remove a particular medication, or shift it to a higher tiered co-payment level, the plan would be required to continue covering the drug (at the same co-payment) for any beneficiary prescribed the medication prior to the change, for the rest of the year.
By contrast, most plan enrollees (except for extremely low-income individuals dually eligible for Medicare and Medicaid) would have had to wait until the next plan year to switch out of the plan. This would have been especially difficult for someone who selected a drug plan solely on the basis of favorable coverage for a specific drug. With this new rule, enrollees will be assured that when they select a Medicare drug plan, the list of covered drugs, and the cost sharing levels for each drug, will not change throughout the year.
This change to the formulary rules comes with the end of the initial enrollment period only two weeks away. This looming deadline has created significant controversy for Medicare beneficiaries that have not yet enrolled. This week, enrollment in the new drug benefit topped 30 million. Many of those that have not enrolled thus far have other coverage. However, an important segment of those that are not enrolled by May 15 will not be able to enroll until next fall and could be subject to a late enrollment penalty once they decide to enter the program (a penalty that compounds over time, and stays with the beneficiary indefinitely).
It is important to note that the May 15 enrollment deadline, as well as the late enrollment penalty, do NOT apply to individuals who are dually-eligible for both Medicare and Medicaid. In addition, the enrollment deadline and the late enrollment penalty does not apply to people who are eligible for a separate program that provides subsidies for those who cannot afford Medicare drug coverage on their own (a program known as “Low-Income Subsidy” or “Extra Help”). Individuals must be at, or below, 150% of the federal poverty level (about $15,000) to qualify for this program. Last week, CMS announced that the May 15 deadline had been extended for these beneficiaries.
Finally, it is important to note that Medicare beneficiaries that have other drug coverage that is just as good, or better than the Medicare program (known as “creditable coverage”) do not have to sign up and will NOT face any late enrollment penalty if they ever decide to enter the program. This includes individuals with retiree health coverage, veterans served by the VA, federal retirees, etc…
Medicare beneficiaries with mental illness that have not signed up for drug coverage are strongly encouraged to do so. There are numerous web-based tools designed to assist beneficiaries and their family members in finding the plan that most effectively covers their medications. In most regions of the country, drug coverage is available for as little as $8 to $10 per month. For those uncomfortable using the internet, enrollment information is available at 1-800-MEDICARE.
Among the recommended web-based tools for researching drug plan options are:
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