Questions from the Medicare Conference Call
February 16, 2005
1. If people have only Medicare Part A but not Medicare Part B, can they get into a Medicare Part D plan?
To be eligible to enroll in a Part D plan, an individual must have either Medicare Part A or Medicare Part B. In other words, a beneficiary must currently have coverage for Part A services or currently have coverage for Part B services.
To maximize the benefits available through Medicare and one’s choice among Medicare prescription drug plans, a beneficiary should have both Medicare Part A and Part B.
- Without Part B, an individual won't have Medicare coverage for outpatient prescription drugs covered under Part B including self-administered chemotherapy agents, anti-emetics, immunosuppressants, or medications that must be administered "incident to a physician's services."
- Without Part A, an individual cannot get coverage for important hospital services, some home health care, and/or hospice care through Medicare.
- Both Parts A and B are needed to enroll in a Medicare Advantage plan or an MA prescription drug plan (MA-PD). (Over the next few months, we'll offer many opportunities to discuss the important factors beneficiaries must consider when deciding about choosing Medicare Advantage (MA) plans and MA-PDs.)
2. Will medically needy Medicaid recipients be automatically given the low-income subsidies? Will they be automatically enrolled in Part D plans?
Individuals who have met their income spend-down and are on full Medicaid will get the full subsidies and will be automatically enrolled in the subsidies. They will receive a notice from CMS that is being sent to all dual-eligbles about the subsidies. They will remain eligible for full subsidies for the remainder of the year without interruption, even if they periodically lose their Medicaid eligibility because they must meet a new spend-down. However, if an individual loses his/her Medicaid eligibility and does not go back on Medicaid before the end of the year, he/she will have to apply for the low-income subsidies for the next year.
Fully dually-entitled beneficiaries receive the full subsidies meaning that:
· They get the maximum premium subsidy: they do not pay a monthly premium to the Part D plan, but only if they choose a plan that has a premium that is no more than the average premium charged by most plans in their region. To date, CMS has not explained how beneficiaries will know which plans in their geographic area will allow them to get the premium paid in full by Medicare.
· They do not pay any annual deductible.
· Their cost-sharing is limited: they must pay fixed co-payments for their prescriptions depending on their income.
o Dual-eligible beneficiaries with incomes of no more than 100% of the federal poverty level have co-pays of $1 per each generic or preferred multi-brand prescription drug or $3 per prescription for all other drugs until total drug costs, including those paid by Medicare and those paid out-of-pocket by the beneficiary, reach $5,100.
o Dual-eligible beneficiaries with incomes greater than 100% of the federal poverty level have co-pays of $2 per each generic or preferred multi-brand prescription drug or $5 per prescription for all other drugs until total drug costs, including those paid by Medicare and those paid out-of-pocket by the beneficiary, reach $5,100.
· After reaching the catastrophic limit of $5,100 in total drug costs, their prescription drugs are free.
Because individuals who spend their so-callled "surplus income" to get Medicaid are considered full benefit dual-eligibles, they will be automatically enrolled into a Part D plan in their region on a random basis. They will be able to switch to a different Part D plan of their choice at any time during their subsidy eligibility period.
(back to top)
3. How does income count in determining eligibility for the low-income benefit?
The amount of help available to low-income beneficiaries depends on the amount of most types of income they receive, also known as countable income. In general, Supplemental Security Income (SSI) rules will be used to determine if beneficiaries meet the income limits for the low-income subsidies.
Countable income generally includes Social Security benefits, Railroad Retirement benefits, pensions, interest, and any income from wages or self-employment. For more information, see HAP’s “Income and Asset Checklist” on common sources of countable income.
4. Does eligibility for the low-income benefit depend upon the beneficiaries’ resources?
The amount of help available to low-income beneficiaries depends on the amount of many types of resources they own, also known as countable resources or assets. In general, Supplemental Security Income (SSI) rules will be used to determine if beneficiaries meet the resource limit for the low-income subsidies.
Countable resources generally include those that can be turned into cash within twenty (20) days. These are called liquid resources. Real estate that is not the beneficiary’s primary residence is also a countable resource. The beneficiary’s primary home does not affect his/her eligibility for a low-income subsidy. Other non-liquid resources (such as a car) that cannot be quickly turned into cash will not be counted in determining one’s eligibility for a subsidy. See HAP’s “Income and Asset Checklist” on the many common resources that are counted.
5. How will beneficiaries pay the Part D premium?
The Part D premium is paid to the PDP (prescription drug plan) or MA-PD in which the beneficiary is enrolled. The beneficiary can choose to pay the Part D premium by having the amount withheld from his/her Social Security benefit check (similar to the way Part B premiums are withheld). According to the final rules, “beneficiaries who do not receive a Social Security checks or otherwise have premiums deducted from other benefits or annuities will pay us [CMS] directly” (p. 4305).
Another option is to pay the premium directly to the PDP sponsor or the MA organization through an electronic funds transfer mechanism such as having it automatically deducted from a bank account or charged to a credit card.
6. What about fully dually-entitled people who are on a Medicaid waiver that provides full Medicaid benefits? Are they eligible for low-income subsidies even if their income is above 150 percent of the federal poverty level (FPL)?
Idividuals who receive full Medicaid benefits through a Medicaid waiver are considered full benefit duals and therefore will qualify for the maximum premium and cost-sharing subsidies (see Question 2). According to the final rules, "All individuals who qualify for Medicaid, including expansion populations and persons eligible for Medicaid in long-term care facilities under a State's special income standard which does not exceed 300 percent of the SSI payment standard will qualify as full benefit dual eligible beneficiaries eligible for a full subsidy" (p. 4200).
Individuals enrolled in Medicaid waivers that permit recipients to have incomes above 100 percent of the FPL will be required to pay the higher co-pays of $2 and $5 depending on the type of prescription.
7. What happens to individuals who are eligible for the QI-1 program but cannot be enrolled in the state's QI-1 program because the state's allocation of QI-1 funding has been completely used up? Will they be automatically enrolled in the full subsidies or will they have to apply for the subsidies?
CMS has not yet answered this question and we have asked for clarificiation. (back to top)
8. Can State Pharmacy Assistance Programs (SPAPs) enroll beneficiaries into preferred plans?
SPAPs are not allowed to enroll its enrollees into one preferred Part D plan or even into one of several preferred plans. According to the final rules, “SPAPs, if they offer premium assistance or supplemental assistance for Part D cost-sharing, must not only offer equal assistance to beneficiaries enrolled in all Part D plans available in the State, but also may not steer beneficiaries to one plan or another through benefit design or otherwise. We believe that the law intends that all Part D plans in a state be given comparable opportunities. Requiring States to coordinate with all Part D plans without discrimination, levels the playing field for Part D plans that want to provide benefits in a particular state” (p.4320).
SPAPs are prohibited from automatically enrolling beneficiaries into a preferred plan because auto-enrollment of beneficiaries into one or a few Part D plans would be discriminatory. “Thus, even if under State law a State is the authorized representative of its SPAP enrollees for purposes of enrolling them in a Part D plan elected by the State, if it auto-enrolls beneficiaries into a select plan, the State program will no longer meet the statutory definition of SPAP” under the MMA (p. 4321).
Source: Medicare Program; Medicare Prescription Drug Benefit; Final Rule. Federal Register: January 28, 2005; Volume 70, Number 18; Rules and Regulations; Page 4193-4585.
State Pharmacy Assistance Programs: Proposals to Wrap-Around or Supplement Medicare Part D
1. Maryland Senior Prescription Drug Program (SPDP), House Bill 324
2. New York Elderly Pharmaceutical Insurance Coverage (EPIC) Program
3. Massachusetts Prescription Advantage (PA)
State Agency Workgroups: Proposed Bills
Illinois House Bill 1476: A bill to create an inter-state agency workgroup to coordinate state programs that provide prescription drug coverage with the Medicare Part D benefit to ensure that all Medicare beneficiaries "who are eligible for or enolled in State pharmaceutical or medical assistance programs maintain their current pharmaceutical coverage to the extent allowed under federal law." (back to top)
