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1: Medicare Part D Drug Benefit and HIV Care
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Mary
R. Vienna
Deputy Director, HRSA/HAB/DTTA
Rockville, Maryland
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Talking
points: This presentation
was prepared by HRSA's HIV/AIDS Bureau (HRSA/HAB)
and is intended to explain the Medicare prescription
drug benefit (Part D) and its implementation,
with a focus on implications for HIV/AIDS
care. |
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| Slide
2: Medicare 101 Topics Covered |
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Medicare
prescription drug program
- Benefit structure
- Low income subsidies
- Formulary requirements
- Implications for those on both Medicare
and Medicaid
- Role of the AIDS Drug Assistance Program
- Cost sharing information for 2007
Slides cover only the basics
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| Slide
3: Medicaid versus Medicare |
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Medicaid
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Medicare
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Structure
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Federal
and State program with State flexibility
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Federal
program
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Means
Test
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Yes
- takes into account financial resources
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No
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Eligibility
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Poor
AND
- Disabled on Supplemental Security
Income (SSI)
- Parents, children, pregnant women
- Medically Needy
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65
or older OR
Permanently
disabled (under 65 and receiving Social
Security Disability Income (SSDI)
for 2 years)
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Eligible
with HIV/AIDS
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266,247 with HIV/AIDS (about 50% of
those in care)
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Approx
100,000 with HIV/AIDS (25% of those
in care); more likely to have AIDS
diagnosis and CD4 count 0-199*
*
CMS estimates, March 2006
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Talking
Points:
Talking Points: To understand Part D probably
requires some background information about
the largest public health insurance programs:
Medicaid and Medicare, the latter of which
is where Part D resides. People living with
HIV disease (PLWH) are unusually reliant on
Medicaid and Medicare for their health insurance
coverage. Fifty percent of all PLWH are covered
by either Medicaid, Medicare, or a combination
of the two. Most individuals with HIV/AIDS
qualify for Medicare or Medicaid by being
disabled due to AIDS. Medicaid is a
health insurance program paid for by federal
and state funds. It is for people with low
income AND disabled, children, pregnant women,
and families. Medicaid is administered by
state Medicaid agencies and the Centers for
Medicare and Medicaid Services (CMS). Medicaid
eligibility is determined by income status
and one of the following: disabled and on
Supplemental Security Income (SSI - payments
to the blind, aged, and disabled individuals
who are low income); pregnant women, children
and teenagers, or medically needy (which is
a state option under Medicaid where medical
expenses can be subtracted from the individual's
income to qualify them for Medicaid (a process
called spend-down)). Medicare is a federal
entitlement program for the aged and disabled.
It is administered by CMS. Prior to Part D,
there was no prescription drug coverage under
Medicare. Medicare eligibility is determined
by being 65 or older or being on Social Security
Disability Income (SSDI) for 24 months. SSDI
is a benefit for those who cannot work due
to disability and have acquired a sufficient
number of work credits to qualify for Social
Security payments. |
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| Slide
4: Medicare and HIV/AIDS |
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There are about
100,000Medicare beneficiaries with HIV/AIDS
- Most qualify by
being on Social Security Disability Income
(SSDI) for
2+ years
- 70% of Medicare
eligible PLWH (60,000-70,000) also qualify
for Medicaid and are called
- dually eligible'
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Talking
Points: The Medicare Modernization
Act (MMA) (Part D) gives prescription drug
coverage to an estimated 100,000 people living
with HIV/AIDS (PLWH/A) who are receiving Medicare
benefits, along with roughly 42 million other
Medicare beneficiaries. PLWH/A on Medicare
qualify primarily due to their disability
status in terms of being on Social Security
Disability Income (SSDI) for 2+ years. The
majority of Medicare eligible PLWH/A, about
70%, also qualify for Medicaid. The term dually
eligible is a Medicare beneficiary who also
qualifies for Medicaid. |
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| Slide
5:Medicare Modernization Act (MMA)
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Addeda prescription drug benefit to Medicare, known
as Medicare Part D
- Most Medicare beneficiaries
must elect the benefit and choose a plan
- Dual eligible beneficiaries
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Talking
Points: The Medicare Prescription
Drug, Improvement and Modernization Act (MMA)
of 2003 was signed into law on December 8, 2003. It is the biggest
change to Medicare in 40 years. The
benefit started January
1, 2006. It added a prescription
drug benefit to Medicare called Medicare Part
D. Dual eligible beneficiaries were automatically
enrolled in Medicare Part D plans because
prescription drug coverage switched from Medicaid
to Medicare January
1, 2006. A key feature of
Part D plans is that formularies (meaning
the list of drugs that are covered under a
plan) must include all antiretroviral, antidepressant,
antipsychotic, anticonvulsant, antineoplastic
and immunosuppressant drugs. |
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| Slide
6: Basic Prescription Drug Benefit Scenarios
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- " Benefit will differ depending
on beneficiary's residence
- " Benefit requires coordination
with the Centers for Medicare and Medicaid
Services (CMS), the Social Security Agency
(SSA) and State Medicaid Agencies to ensure
people are enrolled in Part D and get
extra help
- " Medicare is not the primary payer
- " Actual plans offered will vary
from standard plan structure but must
be actuarially equivalent
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Talking
Points:
Because the Medicare Part D benefit varies
depending on the beneficiary's residence,
coordination among programs is essential and
includes CMS, the Social Security Administration
and State Medicaid Agencies to ensure that
individuals are enrolled in Part D and get
the assistance they qualify for.
When it comes to looking at an individual
who relies on other sources of payment for
drug costs, keep in mind that Medicare is
considered as the secondary payer. This means
that other sources must pay first, before
Medicare does. This requires coordination
with other drug plans/payers.
The prescription drug plans offered under
Part D also varies by state/location. This
is because the private companies offering
plans have flexibility in designing the benefits,
subject to certain constraints such as an
actuarially equivalent standard (the overall
cost of the plan's benefit must be equal to
the standard model), in establishing the structure
of their plans. |
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| Slide7:
Part D Drug Benefit
Varies |
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- " Differences exist in the Part
D benefit received by Medicare beneficiaries
depending on their Medicaid status, income
and assets
- " Variance due to low income subsidies
(known as "extra help") that
Medicare pays to the plan the person is
enrolled in
- " Four types of benefits
- Full subsidy dual eligible <100%
FPL
- Full subsidy
- Partial subsidy
- Standard benefit
- Drugs
cost $1,300 per month
- Jane
pays $6 in co-pays per month for two scripts
(income < 100% FPL so $3 brand name
co-pay applies) for three months
- By
4 th month, total drug costs of $5,200
exceeds $5,100 catastrophic coverage level
($1,300 x 4)
- No
cost to Jane after that
- Jane
pays $18 for the year [3 months of $6
co-pay]
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Talking
Points: Slide
seven illustrates this top bar on Slide 6
in more detail. This is a case study of a
hypothetical person named Jane Matthews. She's
on Social Security disability and she's dually
eligible. For purposes of comparison, she's
receiving a disability income benefit of $780
per month, which is less than 100 percent
of the federal poverty level. And she's on
an (antiretroviral) regimen of (Sustiva) and
(Truvada), which has a cost of approximately
$1,300 per month. So to play out the Medicare
benefit as Jane experiences it, she would
pay $6 in co-pays per month for two brand
name prescriptions. And by the fourth month,
her total drug costs of $5,200 exceed the
$5,100 level. And so she doesn't pay any co-pays
after that. And so her total costs for the
year are $18. |
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| Slide
8: Low-Income Subsidies
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- " Most Medicare beneficiaries with
HIV/AIDS will qualify for some type of
low-income subsidy
- " Dual eligibles, Medicare beneficiaries
on Supplemental Security Income (SSI)
or in a Medicare Savings Program (QMB,
SLMB, QI) are automatically eligible
- " Beneficiaries who aren't included
in the group above but meet income and
asset criteria need to apply to Social
Security or Medicaid to qualify for a
subsidy
- " Subsidy counts toward out-of-pocket
costs and reaching catastrophic coverage
level
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Talking
Points:
Low Income Subsidies that help individuals
pay for Part D costs are called extra help.
Most Medicare beneficiaries with HIV/AIDS
qualify for some type of low-income subsidy.
Some people with Medicare automatically qualify
for this help, and they do not need to do
anything to qualify. They include: (1) dually
eligible, meaning they also receive full Medicaid
benefits; (2) are in a Medicare Savings Program,
in which they get State help with Medicare
premiums and/or copayments (these programs
include Qualified Medicare Beneficiaries,
Specified Low- Income Medicare Beneficiaries,
and Qualified Individuals); and (3) get Supplemental
Security Income (SSI) benefits.
Beneficiaries who aren't included in the group
above but meet income and asset criteria need
to apply to Social Security or Medicaid to
qualify for a subsidy. This low income subsidy
counts toward out-of-pocket costs and reaching
the catastrophic coverage level under the
standard benefit. |
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| Slide
9: Variations in Benefits,
Full/Partial Subsidies, 2007 |
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Full subsidy dual
eligibles with income ? 100% FPL*
$0 monthly premium and no deductible 
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Talking
Points:
These charts represent how the benefit and
out-of-pocket costs apply to dual eligibles.
The top chart is for full subsidy dual eligibles
with income below 100% of the federal poverty
level. Their copays are from $1-3.10 per drug.
They have no monthly premium and no deductible
to pay. The middle chart is for full
subsidy eligibles. They include those with
income over 100% of the federal poverty level,
SSI recipients, Medicare Savings Programs
Groups, and applicants with income < 135%
FPL who also meet resource test. They have
copays of from $2.15-5.35 per drug. Their
monthly premium is $0 and they have no deductible.
The bottom chart is people who qualify for
some assistance but not a full subsidy. This
includes applicants with income <150% FPL
who also meet the resource test. They pay
85% of costs up to the out-of-pocket catastrophic
cost threshold. After that point, they pay
copays of $2.15-5.35 per drug.
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| Slide
10: Case Study: Jane
Matthews |
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- On SSDI, Medicare
and Medicaid (dual eligible)
- SSDI benefit $780/month
(less than100% FPL)
- Antiretroviral
regimen is Sustiva + Truvada
- Drugs cost $1,
- Jane pays $6.20
in co-pays per month for two scripts
(income < 100% FPL so $3.10
brand name co-pay applies) for
- By 5
- No cost to Jane
after that
- Jane pays $
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Talking
Points: On
the bottom bar on slide 10, which is the same
slide as six and eight (we're just repeating
them here for clarity), this illustrates what's
called the partial low income subsidy or partial
extra help. Everyone in this group has to
apply for extra help to get this benefit.
This applies to Medicare eligibles with an
income less than 150 percent of the federal
poverty limit who meet a different asset test
that's a little bit higher than the others.
These individuals, if you're reading from
the left to the right, pay a $50 deductible.
And then up until $5,100 worth of drug costs,
they pay 15 percent co-insurance for their
drug. Once they reach that $5,100 limit, then
they pay $2 generic, $5 brand name co-pay
for the rest of their drugs for the year.
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| Slide
11: Case Study: Jason
Smith |
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Full
subsidy – this includes:
- Dual eligibles with income >100%
FPL
- SSI Recipients
- Medicare Savings Programs Groups
- Applicants with income < 135%
FPL who also meet resource test
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Talking
Points:
This bar chart shows the full subsidy category.
This includes a dual eligible with income
above 100% FPL and those who qualify for the
full low-income subsidy because they are deemed
eligible or apply and qualify by income and
asset level (includes SSI Recipients, Medicare
Savings Programs Groups, applicants with income
< 135% FPL who also meet resource test).
People in this category have no monthly premium
and no deductible. Their per drug copays are
$2.15-$5.35 per drug.
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| Slides
12: Case Study #2: Joseph Black
Full Subsidy >100% FPL |
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- On SSDI and Medicare
- SSDI benefit is
$950/month (less than120% FPL)
- Antiretroviral
regimen is Sustiva + Truvada
- Drugs cost $1,2
- Joseph pays $10.70 in co-pays per month for two scripts
($5.35 brand name co-pay times two) for
- By
- No cost to Joseph
after that
- Joseph pays $42.80
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Talking
Points: Let’s examine
a case study of an individual who falls in
the description on the full low income subsidy.
This person is on SSDI and Medicare but not
on Medicaid. Thus, he is not dual eligible
and is not auto-enrolled in Part D.
He applies to SSA and because his income is
under 130% of FPL, and he meets the individual
asset test, he qualifies for the full LIS.
For purposes of comparison, he’s on
the same ARV regimen as Jane, with the same
costs. He pays $32.10 for the year.
These costs could be decreased if his doctor
wrote him 60 or 90 day scripts instead of
monthly scripts. |
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| Slide
13: Variation in Benefits,
Partial Subsidy, 2007 |
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Partial
subsidy: applicants with income <150% FPL
who also meet the resource test
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Talking
Points:
This
category is people who qualify for some
assistance but not a full low income subsidy.
This includes applicants with income
<150% FPL who also meet resource test. They pay 85% of costs up to the catastrophic
drug coverage level, after which they pay
copays of $2.15-5.35 per drug.
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| Slide
14: Case Study #3: Jason Smith,
Partial Subsidy |
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- On SSDI, Medicare and small
private disability insurance benefit
- Income $1,100 per month (138%
FPL)
- Antiviral regimen is Sustiva
+ Truvada
- Drugs cost $1,
- Jason pays:
o
Month 1: $225.05: $53 deductible plus $172.05
(15% coinsurance of $1,147 balance [$1,200
- $53 = $1147])
o
Month 2: $180: 15% coinsurance of $1,200
o
Month 3: $180: 15% coinsurance of $1,200
o
Month 4: $180: 15% coinsurance of $1,200 (total drug
costs are $4,800)
o
Month 5: $97.69: 15% coinsurance on $651.25 balance
to bring total drug costs to catastrophic
coverage level of $5451.25 [$4,800 + 651.25 = $5461.25]
o
Months 6-12: $10.70 per month ($5.35 brand name
co-pays times two)
- Jason pays
$1,033.64
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Talking
Points: This
scenario is for an individual eligible for
a partial low income subsidy.
Jason Smith is someone on SSDI income
and a private disability insurance benefit. His income is 138% of FPL and he meets
the asset limit requirements for Part D. He applies to SSA for a LIS and is
qualified for a partial LIS.
For
purposes of comparison with Jane and Joseph,
Jason is on the same ARV regimen at the
same cost.
Because Jason’s income is at
138% of FPL, he qualifies for a 75% premium
subsidy and thus only has to pay 25% of
the $32 monthly premium cost.
This comes to $8 per month in premiums.
In month one, he pays $255.05, which
includes the $53 deductible + $202.05 (15%
co-insurance of the $1,347 balance).
By
month 4, he has reached the catastrophic
drug coverage level in drug costs.
Thus, at no time is Jason in the
“donut hole.”
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| Slide
15: Sliding Scale Premium Assistance |
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| FPL &
Assets |
% of Premium Subsidy Amount |
Income at or below 135%
FPL, and meet the resource test for
individuals or couples
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100% |
| Income above 135% FPL
but at or below 140% FPL, and meet the
resource test for individuals or couples
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75%
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Income above 140% FPL
but at or below 145% FPL, and meet the
resource test for individuals or couples
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50%
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Income above 145% FPL
but below 150% FPL, and meet the resource
test for individuals or couples
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25% |
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Talking
Points:This is the sliding
scale premium grid, meaning the monthly premium
for Part D. It shows the percentage that CMS
contributes as the subsidy amount toward premiums.
Notice that the CMS contribution decreases
in proportion as income increases. |
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| Slide
16: Standard Benefit
, 2007 Beneficiary Cost Excluding LIS |
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- Monthly premium
- $265 deductible
- 25% coinsurance >
$266 to $2,400*
- 100% coinsurance >
$2,401 to $5,451.25 (coverage gap—the
“donut hole”)
- Catastrophic coverage
level: co-pay of 5% or $2.15/$5.35 (whichever
is greater) after total drug costs reach
$5,451.25 AND beneficiary has paid $3,850
in true out-of-pocket costs (TrOOP)
Coinsurance is a term used in Medicare Part D
that refers to the beneficiary’s contribution
toward prescription drug costs until the
catastrophic coverage limit has been reached
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Talking
Points: For the minority of Medicare beneficiaries with
HIV who are not eligible for Low Income Subsidies
(LIS), what does this benefit look like?
This slide outlines their standard
benefit.
In calculating TrOOP,
or true out-of-pocket, monthly premiums
are not counted.
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| Slide
17: Standard
Benefit in 2007 |
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Talking
Points: This chart represents the standard benefit. Yellow
represents what the beneficiary pays. Blue
and striped areas are what the plan and/or
CMS pays. |
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| Slide
18: Case Study #4: Peter Jones Standard Benefit |
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- 65 years old, HIV positive, aged into
MedicareIncome $1,600 per month (200%
FPL)
- Antiretroviral regimen is Sustiva + Truvada
- Drugs cost $1,
- Peter pays:
-
Peter pays $4,654 for the year [$384
in premiums, $3850 out-of-pocket and
$420 in co-pays
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Talking
Points: This case study illustrates
how the benefit would play out for the consumer
who does NOT qualify for a low income subsidy,
or "extra help." He is called Peter
Jones and has income of 200% of the federal
poverty level, which means he would not qualify
for LIS. In month 1, Peter would pay $548.75
towards his drugs In month 2, he would pay
an additional $650; in month 3 an additional
$1,400, and $1,258.69 in month 4. Toward the
end of this 4 months, his cumulative TrOOP
would be $3,850. He would thereafter be responsible
for his 5% co-pay for the remainder of this
year. |
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| Slide
19: Variance in Part D Costs |
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| Slide
20: Further Help With Costs |
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- AIDS Drug Assistance Programs (ADAP),
in accordance with State program policy,
can pay:
- Premiums
- Deductible
- Coinsurance (15%, 25% and 100%)
- Co-pays
- ADAP contributions do not count toward
the $3,850 in out-of-pocket costs needed
to reach the catastrophic coverage level
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| Slide
21: What Counts Toward TrOOP? |
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- Payments made by:
- The beneficiary
- Another individual (e.g. family
or friends)
- Certain charities
- A State Pharmacy Assistance Program
(SPAP)
- A personal health savings vehicle
(Flexible Spending Accounts, Health
Savings Accounts, and Medical Savings
Accounts)
- CMS to the plan as low income subsidies
- Co-pays waived by a pharmacy
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| Slide
22: What Does NOT Count Toward TrOOP? |
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- Premiums
- Payments made by:
- Group health plans (employer/retiree
plans)
- Federal government programs (e.g.,
Indian Health, Medicaid, Tricare,
VA, Ryan White CARE Act)
- State-run programs that are not
SPAPs (e.g., Workman’s Compensation)
- Drugs:
- Not covered by the Medicare drug
plan the person is enrolled in and
not obtained through the exceptions
and appeals process
- Purchased outside the U.S.
- Not covered under Medicare Part
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| Slide
23: Drugs Covered by Part D: Required |
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- All FDA Approved Drugs with exceptions
to follow
- In order to protect against discrimination,
CMS will review six drug classes in the
formulary to ensure there is access to
all drugs in that class:
- Antidepressants
- Antipsychotics
- Anticonvulsants
- Antiretrovirals
- Antineoplastics
- Immunosuppressants
- Plans to cover all Part D drugs or
use formulary
- Part D covered versus Plan covered
medications
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| Slide
24: Drugs NOT Covered by Part D |
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- Part A and Part B drugs
- Barbiturates
- Benzodiazepines
- Non-prescription drugs (over the counter)
- Drugs for anorexia, weight loss or weight
gain (except for cachexia due to AIDS
or cancer)
- Fertility drugs
- Drugs for cosmetic purposes or hair
growth
- Cough and cold medication
- Prescription vitamins and minerals,
except fluoride and prenatal vitamins
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| Slide
25: ADAP Considerations |
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- Medicare beneficiaries must enroll
- ADAPs determine their role
- Number of Medicare clients
- Cost-neutrality
- Extra-help vs standard benefit (donut
hole)
- Switching back to ADAP
- Plans with no coverage gap
- Communicating ADAP role to providers
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| Slide
26: Key Dates |
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- November 15 – December 15 of
each year—open enrollment period
to make plan changes if any
- If creditable coverage is lost, individual
has 63 days to enroll in Medicare Part
D to avoid a penalty
- Dual eligibles will be enrolled as
they become eligible
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| Slide
27: Web Site Resources |
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| Slide
28: Contact Information |
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Mary R. Vienna
5600 Fishers Lane, Rm 7-29
Rockville, MD 20857
Telephone: 301/443-1380
Email: MVienna@hrsa.gov
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