Medicare Prescription Drug: Part D and Other Sources of Medication Help

The New Medicare Prescription Drug Benefit

Medicare Part D

The first ever federally subsidized drug program for seniors took effect January 1, 2006. Under this program, private health insurers offer limited insurance coverage for prescription drugs to those persons who are Medicare recipients. This includes disabled persons who also receive Medicare benefits. The drug benefit is available only through private insurance companies who contract with Medicare to provide drug plans.

Keep in mind the following points:

1. The program is solely voluntary, although there is a financial penalty for those who do not sign up during the initial enrollment period.
2. To obtain the coverage, you will pay a monthly premium which, on an average, will run from $11.00 up to $35.00 per month, or more, depending on the coverage you choose. However, it will be waived in instances of those with limited income. Currently, that is $14,355 per year for a single person and $19,245 per year for a married couple.
3. Be careful when you decide to enroll because you normally can only switch plans one time per year.

The standard plan provides for a $250.00 deductible, after which you will pay 25% of the drug cost up to $2,250.00 per year. Coverage will then stop completely until your drug costs reach a total of $5,100.00. This is sometimes called “doughnut hole.” In other words, after you reach the $2,250.00 limit described earlier, you are responsible for the next $2,850.00 in drug costs yourself. After that point, Medicare will pay about 95% of the cost. This is what is known as the “catastrophic coverage.” This means that once you have $3,600.00 in out-of-pocket costs in 2006, then the Part D Program will pay the majority of your drug cost. Be careful, because only the covered drugs under the plan count toward your out-of-pocket costs.

This describes the basic drug coverage; however, each insurer will offer something slightly different, and in some cases, a much more generous coverage. However, for greater coverage, you will generally pay a higher premium.

If you are in a Medicare Advantaged Program; i.e., HMO or PPO, you will generally not have the doughnut hole nor will you pay an additional monthly premium.

WARNING:

Whatever plan you choose, you must be certain that that plan will cover your required drugs. If the plan does not cover your required drugs, then the cost for those drugs will not count towards your out-of-pocket costs nor will any part be picked up by the plan unless you file an appeal with the plan and it is granted. In some cases, you may ask your doctor if different medication covered by the plan would be appropriate for your condition. Drugs purchased from Canada or other countries will not be covered by the Medicare benefit and will not count toward the out-of-pocket limits. Also be careful that the drugs you take are not in a higher tier requiring greater co-pay.

Enrollment

If you are currently eligible for Medicare Part A or Medicare Part B or both, you have until May 15, 2006 to enroll in a Medicare Part D program.

If you become eligible for Medicare in January, 2006, then you have until May 15, 2006 to enroll. If you become eligible for Medicare in February, 2006, you have until May 31, 2006 to enroll. If you become eligible for Medicare during or after March, 2006, your enrollment will be the same as if for Part B of Medicare. That is the period which includes the three (3) months before you become eligible, the month you are eligible and the three (3) months after you become eligible. Example: If you turn sixty-five (65) in July, 2006 and are eligible to enroll in Medicare, then you have from April 1, 2006 up to October 31, 2006 to enroll.

How do you find out about the plans offered in your area?

First, you may call the Apprise Health Insurance Counseling Program at Horizons Unlimited Geriatric Education Association at (610) 566-6248 or COSA at 610-490-1300. Second, you can go onto the Medicare web site at www.medicare.gov.

Hints:

1. If you are under group health insurance provided by your employer, former employer, union, etc., you should have received a letter indicating if it is the equivalent of a Medicare Part D Program. If it is the equivalent, stay with that plan.
2. If you are in a Medicare HMO or PPO which offers prescription coverage, then you must stay with that plan. Do not choose a different plan unless you wish to disenroll from your Medicare HMO or PPO.
3. If you are in Medicaid, then you were automatically enrolled in a Medicare Part D Plan. If you were enrolled in a plan you do not like for any reason, you are one of the few who is not locked into your program for a full year. You can change the plan once a month.
4. If you are in PACE and PACENET, you do not have to enroll in a Part D plan; however, you can choose to do so. The PACE program is encouraging seniors to enroll in a Part D; however, it has not yet completely coordinated the program that will be easiest for you to coordinate benefits. This should happen in 2006 so that there will be a natural exchange of information between PACE, PACENET and five (5) or six (6) plans with which it will operate smoothly.

Late Enrollment Penalties

If you choose not to enroll in Medicare Part D during the initial enrollment period, then the Medicare Part D premium will increase at least one percent (1%) per month of the average national premium until the month that you do enroll. You do not pay the penalty if you are currently enrolled in a drug program through a private insurer, such as through a retirement plan that has creditable or equivalent coverage, nor do you pay a penalty if you are under Medicaid or PACE or Veterans insurance such as Tricare.

Extra Help for People with Limited Incomes

The new Medicare prescription drug program offers extra financial help for people with limited incomes and assets. You may qualify for this extra help if your income is below $14,355 a year (or $19,245 if you are married and living with your spouse—and more if you have dependent children or grandchildren living with you), and if your assets are below $11,500 (or $23,000 if you are married). Your assets include things like bank accounts, stocks, bonds, and life insurance policies. They do not include the house you live in, your cars and other personal possessions, such as your furniture or jewelry.

You may already be receiving some form of government assistance that makes you automatically eligible for the Extra Help—for example, a Medicare Savings Program that pays your Medicare Part B premium, or Supplemental Security Income (SSI). If so, you will automatically be able to get extra help and need not apply.

If you do not participate in one of these government programs but think you may qualify for the Extra Help based on your limited income and assets, you will need to apply for it with the Social Security Administration. You can apply on your own or, if you prefer, someone else can help you. This includes a family member, friend, caregiver, legal representative, social worker or a counselor who helps people with health insurance issues. The application can be made:

• By Mail—Get an application from the Social Security Administration. Fill it out and mail it to the Social Security Administration. If you are married, both you and your spouse must apply separately. Send the application to:
  • Social Security Administration
  • Wilkes-Barre Data Operation Center
  • P.O. Box 1020
  • Wilkes-Barre, PA 18767-9910.
• By Phone—Call the Social Security Administration at 1-800-772-1213 (TTY: 1-800-325-0778). A Social Security worker will complete the application with you over the phone.
• By Internet—You may apply online through the Social Security Administration’s www.socialsecurity.gov. No signature is required.
• In Person—You may apply by going to the local Social Security Office or through the Horizons Apprise Program, but call first for appointment at (610) 566-6248.

Some Common Questions:

What do you do if you have Medigap drug coverage?

The three (3) Medigap plans which provide prescription drugs are Plans H, I and J. These do not equal Part D. Therefore, you can decide to keep your Medigap coverage and not enroll in Medicare prescription drug benefit. However, you will pay a penalty if you ever do enroll in Medicare Part D Plan. You can keep your Medigap policy and enroll in a Medicare prescription drug benefit, but this will generally cause you to lose the prescription coverage under your Medigap policy. You can switch your Medigap policy and enroll in a Medicare Part D Plan (if you keep your current policy, your Medigap premium will be adjusted to reflect the elimination of the drug benefit). There will be no new prescription drug coverage under the three (3) Medigap plans; however, existing Medigap plans may be renewed.

What if you already get retiree drug coverage from your former employer?

Be very careful because if you sign up for Medicare Part D, you will lose your company retiree drug coverage and in some cases, this will also cancel your medical insurance. Find out if the retiree drug coverage is creditable, because if is, you keep what you have.

Sources of Help:

• The Medicare and You 2006 Booklet.
• AARP has numerous publications (Website: www.aarp.org)
• The Facts About Medicare Prescription Drug Plans, Centers for Medicare & Medicaid Services.
• APPRISE Health Insurance Counseling Program at Horizons Unlimited Geriatric Education Association at 610-566-6248 or 1-800-783-7067.
• COSA at 610-490-1300.
• Medicare web site at www.medicare.gov.
• Medicare Help Line 1-800-Medicare or 1-800-633-4227.
• PA Department of Aging web site at www.aging.state.pa.us
• PA Long Term Care Hotline at 1-866-286-3636 or web site at www.aging.state.pa.us/longtermcare
• Social Security Administration web site at www.ssa.gov

PACE AND PACENET

Pharmaceutical Assistance Contract for the Elderly

Pennsylvania has established a limited pharmaceutical assistance program for the elderly (age 65 and over); under the PACE program, citizens are eligible if their annual income is not higher than $14,500 for a single person or $17,700 for a married couple. There is a $9 co-pay for name brand and $6 for generic brand for each subscription.

You must have lived in Pennsylvania for at least ninety days prior to the date of your application and you must not be eligible for pharmaceutical benefits under Medicaid.

The PACE and PACENET programs are based on income only and not on assets. In order to qualify for Pennsylvania's new prescription program called PACENET, you must meet the $40 per month deductible. Thereafter, you will pay $8 for generic drugs and $15 for brand name drugs. In order to receive PACENET benefits, you must be a Pennsylvania resident for at least ninety days prior to application, must be age 65 or older and must have a household income of $23,500 for an individual and $31,500 for a married couple. PACE eligibility is subject to annual renewal and eligibility could be terminated if you move out of state or are found guilty of fraud or abuse by the Department of Aging or if you are covered by another plan which pays the full costs of your prescriptions.

NOTE:

Income for both PACE and PACENET is based on prior year; therefore if you apply in 2006, eligibility is based on 2005 income.

Applications are available from your local area Agency for the Aging, pharmacy, senior citizen center or your local legislator's office. Or you can receive the application online through the website at www.aging.state.pa.us. Your completed application must be accompanied by proof of age and residency. You may apply thirty days prior to your sixty-fifth birthday.

Pennsylvania's prescription program requires the use of generic drugs, unless there are no generic drugs available for the prescription you require or if there are certain medical restrictions which require the use of a brand-name drug. Participating pharmacies display a PACE emblem in their windows; out-of-state pharmacies cannot participate in this program.

If you have other questions about PACE or PACENET, you can call toll-free 800-225-7223. In Delaware County, you can contact County Office Services for Aging (COSA) at 610-490-1300 or the Apprise Program at 610-566-6248.

NOTE:

In light of the Medicare prescription coverage and state proposals on possible expansion of PACE/PACENET, you should contact COSA or the Apprise Program for latest information.

VETERANS BENEFITS

Are you a veteran? If so, the Department of Veterans Affairs (VA) covers prescription drugs (after a small co-payment) for veterans who meet certain guidelines. A VA doctor must prescribe the drugs. Further information is available from the VA at (877) 222-8387 or online at www.va.gov. Also look at the Veterans Benefits section of this book.

PHARMACEUTICAL COMPANY PROGRAMS

Most pharmaceutical companies and drug store chains offer discounts to many of their customers. These programs may have income limits (but sometimes do not) and co-payment requirements. They may require that applicants be Medicare recipients and have no other prescription coverage. These drug discount cards are usually free with no enrollment or annual fees. Most major drug companies even provide free medications in some circumstances.

Many manufacturers participate in the Pharmaceutical Research and Manufacturers’ Association (PhRMA). This program is particularly helpful to persons between 55 and 64 years of age or disabled who do not receive any prescription coverage. Each manufacturer has set its own eligibility guidelines, which include income limits. Typical income limits are $20,000 (single) and $25,000 (married). For more information on PhRMA, call (800) 955-0989 or the Horizons Apprise Program at 610-566-6248.

Consumers can also research company programs through the Partnership for Prescription Assistance Web site at www.pparx.org/Intro.php.

NONPROFIT WAREHOUSE

If an individual is not eligible for any of the above drug discount card programs because he or she exceeds the annual income limit or other requirements, he or she may still be eligible for the Nonprofit Warehouse Drug Discount Card Program which covers all drugs, has no income limits and has no age requirement. There is no charge for the card. The phone number is (770) 541-7777 and the Web site is www.nonprofitwarehouse.com/kscriptcard.asp.

OTHER WAYS TO HOLD DOWN DRUG COSTS

Here are some additional tips:

• Request free samples from the doctor at every visit. Ask for as many free samples as possible. Pharmaceutical companies give doctors millions of drug samples each year. These free samples often go unused, so be sure to ask.
• Buy a 90-day supply. The “per pill” cost may be much less if a 90-day supply is purchased rather than a 30-day supply. In addition, if the insurance requires a co-payment each time the prescription is filled, there may be fewer co-payments if a 90-day supply is purchased.
• Ask the doctor to prescribe generic drugs as much as possible. Also, be sure to ask the doctor to consider less-pricey older drugs that may not cost as much as newer ones.
• Review medications with the doctor at each visit. There may be medications that are no longer needed. It is also a good idea to review the list with the pharmacist.
• Use an online or mail-order pharmacy. They offer competitive pricing on hundreds of the most popularly prescribed medicines as well as over-the-counter medications.
• Talk to the doctor and pharmacist about using a pill splitter. Manufacturers may price some medications the same for all strengths. If so, the medications can be broken in half and save the consumer 50 percent.

Some seniors purchase medications across the border from Canada and the United Kingdom at significant discounts from the price in the U.S. (Warning: the legality of importing drugs from other countries is open to question, and quality concerns may exist.)

A number of states are beginning to provide consumers with assistance in obtaining less-expensive prescription drugs from other countries. Minnesota was the first state to launch Web site with links to Canadian pharmacies. This site provides information about accessing lower-cost prescription medicine from both Canada and the United Kingdom. For information, go to www.state.mn.us and click on “RX Minnesota Connect.”