Medicare Part D Unraveled: What Do You Need to Know

Many people with disabilities will be eligible for a new prescription drug benefit beginning January 1, 2006. This benefit is called The Medicare Prescription Drug Program, or Medicare Part D.

The first and most important thing to know is that Medical Assistance (MA) beneficiaries currently receiving prescription drug coverage through Medicaid will have their coverage discontinued as of December 31, 2005. If an MA beneficiary wishes to receive prescription drug coverage from then on, it will come through Medicare Part D. (People who are on MA and who are not receiving Medicare will continue to get their medications through MA.)

The Social Security Administration (SSA) and The Centers For Medicare and Medicaid Services (CMS) will be partnering to bring this new program to people with disabilities. There are two steps to complete in order to receive this new benefit:

• Apply for what is called “Extra Help” (EH) from SSA.

• Select and enroll in a prescription drug plan through CMS.

Between May and the end of August 2005, SSA will be sending out letters to beneficiaries explaining what Medicare Part D is, who’s eligible for the “Extra Help,” and how to apply. It is imperative that people with disabilities read through this information to be informed of their rights and responsibilities in the application process for this new benefit. If a beneficiary isn’t sure about whether he/she qualifies for the “Extra Help,” it’s best to fill out an application and send it to SSA for determination.

Applying for Extra Help (EH)

Who Is Eligible?

SSA will facilitate the application process for the “Extra Help.” EH is available for individuals who wish to receive prescription drug coverage but are unable to pay for the monthly premiums, deductibles, and co-pays. There are some people who will automatically be deemed eligible for the “Extra Help”:

• Individuals who receive both Medicare and MA;

• Individuals who are enrolled in Medicare Savings Programs such as Qualified Medicare Beneficiaries (QMBI), Specified Low-Income Medicare Beneficiaries (SLMB), and Qualified Individuals (QI), and Individuals who receive SSI and Medicare.

These people automatically qualify for assistance with the costs of the Medicare Prescription Drug coverage. They do not need to fill out an application for EH with the costs, but they will need to choose a prescription drug plan in the fall. Under all of these programs, MA helps pay the costs for Medicare Parts A and B.

Who Is Not Automatically Eligible?

The following are not automatically eligible:

• Medicare beneficiaries who have limited resources and low income;

• Individuals who do not have Medicaid, or SSI, or who are not enrolled in a Medicare Savings Program.

These individuals may still be eligible and are encouraged to apply.

Individuals with an income of $14,355 or less, OR a married couple living together with a joint income of $19,245 or less annually, may qualify for the “Extra Help.” Another way to calculate eligibility is to determine whether individuals are at 150 percent of the federal poverty guideline with limited income and resources. These people will be eligible for the “Extra Help.” This figure may change annually. Individuals with an income higher than 150 percent of the poverty guideline may still qualify for some “Extra Help.”

What Gets Counted as a Resource?

Individuals with assets or resources up to $10,000 and married couples with resources up to $20,000 may qualify for the EH. Resources are things like bank accounts, stocks and bonds, and even money allocated for burial plots up to $1,500. Vehicles and an individual’s home are not counted as resources.

How To Apply

In the packet of information sent out by SSA between May 27 and August 31, 2005, MA beneficiaries will receive an application. Follow the directions carefully, fill it out and return it as soon as possible. If a beneficiary doesn’t receive an application, or doesn’t want to wait for the packet to arrive in the mail, they can call SSA at 1-800-772-1213 or (TTY 1-800-325-0778) to request an application.

Beneficiaries may call the toll free number for SSA to ask for help in filling out the application. Beginning July 1, 2005, MA beneficiaries may apply on-line at www.socialsecurity.gov.

After a beneficiary submits their application for the “Extra Help,” SSA will send them a letter indicating whether they qualify.

Enrolling in a Prescription Drug Plan

How to Enroll

After sending in an application, the next step is to enroll in a prescription drug plan. CMS will notify beneficiaries of how to proceed when information becomes available on the various prescription drug plans beginning in October 2005. Enrollment in the program runs from November 15 through December 31, 2005. Coverage begins January 1, 2006.

Can You Still Apply After the Initial
Enrollment Period?

Yes, if a beneficiary does not sign up in the initial enrollment period, he/she may still apply and qualify for the program. For example, if an individual hasn’t made up their mind, they can still apply in January 2006 and coverage will begin in February 2006. Individuals may still apply between January 1 and May 15, 2006. In order to avoid a gap in coverage, it is highly recommended that interested beneficiaries apply during the initial enrollment period of November 15 to December 31, 2005. Enrolling early also means beneficiaries will pay a lower premium.

If a dually eligible beneficiary doesn’t apply during the enrollment period from November 15 to December 31, 2005, they will automatically be enrolled in a plan with a premium covered by the low-income premium assistance. Coverage will begin January 1, 2006. They can change plans at any time.

What’s Covered?

Formulary requirements will be posted on the CMS web site, www.cms.hhs.gov. Two drugs in each category must be covered with the exception of drugs for anorexia, weight gain, non-prescription drugs, and prescription vitamins. Six classes of drugs must be covered in full including: anti-depressants, anti-convulsants, anti-psychotics, drugs for HIV/AIDS, anti-neoplastics, and immuno-suppressants.

What Does Typical Coverage Look Like?

An average premium will be $37.00 per month with a $250 deductible. Once the deductible is met, Medicare will pay 75 percent of drug costs from $250 to $2,250. The MA beneficiary’s responsibility is 25 percent out-of-pocket. From $2,250 to $5,100 the MA beneficiary’s responsibility for drug costs is 100 percent out-of-pocket. If an individual is receiving “Extra Help,” this does not apply. After $3,600 in out-of-pocket costs (or $5,100), Medicare pays approximately 95 percent of the individual’s drug costs.

What If I Live In a Nursing Home?

Beneficiaries will receive their prescription drugs from a pharmacy selected by the facility in which they reside. Access for these qualified beneficiaries must be convenient.

An excellent local resource for questions on this new benefit is the Senior Linkage Line at 1-800-333-2433.

Watch Access Press for further information on this new Medicare Prescription Drug Program in the coming months.