Medicare Prescription Drug Coverage

by Food and Drug Administration (FDA)

(Page 3 of 4)

Medicare Part D, the new outpatient drug coverage beginning on Jan. 1, 2006, works like other health insurance plans. Medicare beneficiaries will be able to choose from at least two prescription drug coverage plans. Those plans will cover drugs for all medically necessary treatments, will pay for brand-name and generic drugs, and will enable beneficiaries to get prescriptions at a pharmacy or through mail order.

The standard drug coverage in 2006 will require consumers to pay a $250 deductible and a monthly premium of about $35. After beneficiaries pay $250, Medicare will pay 75 percent of a beneficiary's drug expenses up to $2,250, with beneficiaries paying 25 percent of the costs.

After total drug expenditures reach the $2,250 mark, Medicare's standard coverage pays nothing until the beneficiary spends another $2,800. "It's important to know that a lot of people will never reach the $2,250 amount," says CMS spokesman Karr. After spending reaches $5,100, the Medicare benefit will cover about 95 percent for the rest of the year with beneficiaries paying only 5 percent. "None of this applies to the Medicare beneficiaries who qualify for extra help because they will have no premiums, no deductibles, and no gaps in coverage," Karr says.

Some Medicare beneficiaries already get coverage for prescription drugs through union- or employer-provided health plans. If that plan is as good or better than Medicare's prescription drug coverage, Medicare will be providing new support so that coverage stays in place. "Beneficiaries should be hearing from their former employer or union this fall about their coverage options," Karr says.

Some Medicare beneficiaries also currently get drug coverage from a Medicare Advantage plan, and those beneficiaries should expect to hear from their current plan about what kind of coverage they will be offering, he says. Some plans are likely to offer coverage that is even more comprehensive than Medicare's standard drug coverage.

The first enrollment period starts on Nov. 15, 2005, and runs through May 15, 2006. For those who don't join a Medicare prescription drug plan by May 15, 2006, the monthly premium rises 1 percent a month. So for people who wait a year to join, the premium would go up by 12 percent.

People in Medicare who also receive assistance from Medicaid will get drug coverage from Medicare instead of Medicaid starting January 1, Karr says. Medicaid is the state-administered program for people with limited incomes. "If they haven't chosen a plan before January, these 'dual-eligibles' will be automatically enrolled in a prescription drug plan so that no gap in coverage occurs," Karr says. "But they will also have the ability to change plans once a month if they find a plan that better suits their needs." People in Medicaid and Medicare will be automatically eligible for the extra help, giving them comprehensive coverage with no premiums, no deductibles, and no gaps in coverage.

"We have about 50,000 people in Oregon who fall into this category," says Jane-ellen Weidanz, the MMA project manager for Oregon's Department of Human Services. "The automatic enrollment is good because we don't want people to fall through the cracks. At the same time, we will be letting people know they need to review the plan they've been assigned to see if it meets their needs, and we will be giving them assistance to help them make needed changes."

Each state will decide how its assistance programs will work with Medicare coverage. As of May 2005, at least 39 states had established or authorized some type of program to provide pharmaceutical assistance, and 32 states had programs in operation, according to the National Conference of State Legislatures (NCSL).

As of June 1, 2005, 23 states had enacted laws or resolutions responding to or adjusting to the Medicare prescription drug provisions. The Medicare law allows states to "wrap around" the Medicare benefit to fill in gaps in coverage.

The Alabama SenioRx: Partnership for Medication Access program was created in 2002 to help people ages 60 and older who have no prescription insurance coverage and who live below 200 percent of the poverty level. The program helps more than 26,000 Alabama seniors receive free or discounted drugs through PAPs provided by pharmaceutical manufacturers.

"We have brought in approximately 90 million dollars in free and low-cost medications in the three years we have been in operation," says Irene Collins, executive director of the Alabama Department of Senior Services. "About 80 percent of our current clients will be eligible for the low-income subsidy with Medicare Part D."

Collins says her agency continually communicates with contacts at the PAPs to find out how they will change in response to the Medicare drug benefit. "Because we anticipate changes," Collins says, "we have been working over the last several months to ensure that our clients who are eligible for Medicare savings programs are enrolled. We are also conducting many education opportunities about the changes in Medicare and providing one-on-one counseling for our clients and their families and physicians."

The Medicare drug plans starting in January 2006 are different from the Medicare discount drug cards that have been used as a temporary measure. Medicare beneficiaries who have been using the temporary discount drug cards can use those cards until May 15, 2006, or until they sign up for a plan, whichever comes first. "The card is not valid once you sign up for a plan," Karr says.

Karr says Medicare beneficiaries should watch the mail in October 2005 for the "Medicare & You" 2006 brochure. "This will show people what plans are available on a local level," he says.

About the Author

www.fda.gov
FDA is A United States government body that oversees medical devices, including contact lenses, intraocular lenses, excimer lasers and eyedrops. In the US, these products must be approved by the FDA before they can be marketed.