Costs and Cost Sharing

Costs for drugs under Part D.
Yes, there are several levels of costs under the Part D standard benefit. However, low income individuals can apply for extra help in paying these costs. Dually eligible individuals automatically qualify for extra help. Also, many plans offer cost sharing that is more generous than the standard benefit. (The vast majority of Medicare beneficiaries living with HIV/AIDS have lower costs than those under the standard benefit.)

• Monthly Premium. This is the amount the individual must pay each month, regardless of how many drugs are used. (Those who enroll late will be charged a premium penalty—1% for every month after the deadline.)

• Deductible. The individual must spend this amount on prescription drugs before the plan starts paying for drugs.

• Co-Pay. The individual next pays 25% of total drug costs in the co-pay cost sharing band.

• Coverage Gap. At this point Part D does not cover any costs. The individual pays 100% of costs. This is called the coverage gap or “donut hole.”

• Catastrophic Coverage. After spending the designated amount of total drug costs and true out-of-pocket costs (TrOOP), the individual pays 5% of costs or a certain amount per prescription, whichever is greater.

Cost Category	2008	2009
Deductible	$275	$295
Co-Pay (25% for enrollee)	$276 to $2,510	$296 to $2,700
Coverage Gap (100% for enrollee)	$2,511 to $5,726.25	$2,701 to $6,153.75
Catastrophic Coverage	>$5,726.25 and $4,050 in TrOOP	$4,350 in TrOOP
Cost Sharing Per Drug Generic/Brand Name	5% or $2.25 / $5.60	5% or $2.40 / $6.00

* In addition to monthly premiums.

TrOOP costs.
In moving along the various levels of cost sharing under the Part D standard benefit, the individual must pay such costs as the initial deductible and subsequent co-payments before Part D’s full “catastrophic coverage” begins. After reaching the catastrophic level, the individual is only obligated to pay 5% of prescription drug costs or co-pays for each drug, whichever is higher. Medicare will pay the rest.

These costs to the beneficiary are called TrOOP, or true out-of-pocket costs. In general, when an individual incurs the required TrOOP costs, they reach the catastrophic coverage level. Certain low income individuals do not have to pay these costs if they qualify for extra help under Low Income Subsidies.

Ryan White funds and TrOOP.
Entities, such as Ryan White grantees (ADAPs and other Ryan White programs) can help individuals with HIV/AIDS by covering Medicare drug plan premiums, deductibles, co-insurance and/or co-pays. However, there is an important limitation to this: Ryan White funds (such as ADAP payments) cannot be counted toward TrOOP, which is essential in reaching the catastrophic level where Medicare picks up most costs. Thus, Ryan White funds, such as ADAPs, can pay the individual’s deductible or co-payments, but these payments will not count as TrOOP.

In contrast, payments made by CMS on behalf of a low-income enrollee who qualifies for Low Income Subsidies count toward TrOOP. In addition, cost sharing payments made by individuals (such as family members), charitable organizations, and State pharmacy assistance programs also count as TrOOP costs, thus helping the individual reach the catastrophic coverage level.

How Ryan White HIV/AIDS programs (Parts A, B, C, D, F) can help clients pay Medicare Part D out-of-pocket costs.
Although such contributions do not count towards TrOOP, Ryan White CARE Act grantees (ADAPs and other Ryan White programs) can help individuals with HIV/AIDS pay their Medicare drug plan premiums, deductibles, co-insurance and/or co-pays. However, doing so entails numerous administrative and operational challenges. Among these are mechanisms to make payments to prescription drug plans on behalf of clients (Ryan White payments cannot be made directly to clients for Part D) and to track Part D contributions made for specific clients to ensure coordination of payments across payer sources. Standardized procedures are also essential in managing emergency situations where Medicare payment authorization is denied and clients cannot pay co-payments. Finally, since ADAP programs must assess and compare the costs of providing medications through a health insurance option (such as Part D) versus ADAP, any Medicare Part D payments made by other Ryan White programs would complicate their ability to undertake such analyses.

The above challenges suggest that coordination with Part D may best be handled at the State level. Ryan White Part A, C, and D grantees considering Medicare Part D cost sharing assistance for Medicare-eligible clients should coordinate with their Ryan White Part B programs so that standardization of approaches and administrative efficiencies can be achieved. Such coordination can also enhance decisions about funding drug assistance, such as Ryan White Part A contributions to State ADAP programs. Grantees are encouraged to contact their Federal project officers to discuss these issues.

Pharmacists and filling prescriptions if the individual cannot afford the co-pay.
Yes. Under the new Part D benefit, pharmacists can refuse to fill a prescription if the individual cannot afford the co-pay. (This differs from Medicaid, where dual eligibles were not refused medications if they did not pay the Medicaid co-pay.) However, pharmacies are permitted to waive cost-sharing on an individual basis. They can do so if they do not always waive cost-sharing, if they do not advertise, and if they have made a good faith effort to determine that the beneficiary is unable to pay their cost-sharing.