In the news ... 2006 archive

Federal Medicare Part D Update

November 7, 2006

Important Dates (these are expected dates and may not be exact):

September
Centers for Medicare Services (CMS) mails notices to beneficiaries who were deemed eligible (automatically considered to be eligible) for Low Income Subsidy (LIS) for 2006, but will not be in 2007.

October 1
Prescription Drug Plans send marketing materials.

Early October
Notices sent to beneficiaries whose plans won’t participate in 2007. Notices sent to deemed LIS beneficiaries whose co-pay amounts will change.

Mid October
Plan information available at 1-800-Medicare and www.medicare.gov.

End of October
Notices sent to LIS beneficiaries who will be reassigned to a new Part D plan due to changes in their current plan.

All beneficiaries will receive the Annual Notice of Change from their plans. This should be reviewed carefully. There will be plan changes in formularies and coverage that could dramatically affect an individual’s plan choice.

Early November
Medicare and You Handbook mailed.

November 15–December 31
Annual Open Enrollment period. All beneficiaries should review options carefully to determine if they are in the best plan. Californians living with HIV should check the state’s premium assistance program before enrolling. Plan changes and enrollment should be done, if possible, by December 8 to ensure January 1, 2007 start date.

January 1, 2007
New plan year begins; plan reassignments and changes in LIS eligibility should be effective.

CMS Releases 2007 Part D Plan Information
CMS, which oversees Medicare, released some information on 2007 stand alone Part D plans in late September. There will be 8 new national Part D plans making a total of 17. CMS has not released information about Managed Care Part D plans yet.

Information on plan formularies and coverage is available in the Medicare plan finder at www.medicare.gov. Unfortunately, not all plans have their 2007 information in the database yet. CMS has no definite date when complete information will be available although it is expected to be in by the first day of open enrollment, November 15.

Beneficiaries should receive an Annual Notice of Change from their current plan. It will be essential for beneficiaries to review the notices carefully as plans may change their benefits in 2007. For example, Humana Complete offered coverage on all formulary drugs through the Medicare coverage gap (donut hole) in 2006. In 2007, Humana Complete will offer coverage on generic drugs only through the gap. If beneficiaries have questions about the plan benefits, it is probably best to call the plan.

Will People Have to Re-Enroll in 2007?
Beneficiaries will receive information regarding plan changes in their Annual Notice of Change from their plan. Those who have reviewed the 2007 version of their plan and want to continue in their current plan do not have to take any action. They do not have to re-enroll. However, before deciding to stay in the same plan, beneficiaries should carefully read the plan changes and check the plan’s year 2007 formulary, requirements and costs as changes may negatively affect the beneficiary.

Beneficiaries who want to make changes can do so during open enrollment period of November 15–December 31. CMS advises making changes by December 8, 2006 to ensure a start date of January 1, 2007.

Full benefit dual eligibles can change plans at any time during the year but should also make their changes by December 8 if possible.

Plan Re-Assignment for 2007
Most LIS beneficiaries were auto-assigned to plans in 2006. Some of them elected to change plans in 2006.

Two categories of beneficiaries will be re-assigned in 2007:

• LIS beneficiaries who are still in their original assigned plan if the plans’ premiums are more than $2 above the 2007 benchmark (the average plan cost in a region), and
• LIS beneficiaries in their original plan whose plan is no longer a Part D plan.

Reassignment will not be done for people who either changed their original plan or were not auto-enrolled in 2006. If the plan they are in increases the premium, they will pay the difference between the benchmark and the new plan premium unless they change plans. The plans are supposed to let the beneficiaries know of any increased premium costs by October 31.

CMS is responsible for reassignment and will mail the notices on blue paper. The notices are expected to get to beneficiaries in early November. The beneficiary will have to review his or her old plan if it is still offered and the new plan. If beneficiaries want to stay in their current plan, they should contact the plan once they get their notice. However, it is possible that the reassignment process will have to go through before the beneficiary can transfer back to his or her original plan. Beneficiaries should be aware that some of the same problems they saw with auto-enrollment may happen with re-assignment, delays and problems with processing, and difficulty getting their drugs. If they elect to change plans, they might want to get an extra supply of essential drugs if possible before January 1, 2007.

However, there is confusion about which beneficiaries will receive the notice of reassignment. For example, in California two benchmark plans will not be offered in 2007. The plan sponsor will have another benchmark plan in 2007. Beneficiaries will be moved from their original plan to the new plan but CMS may not term it reassignment and therefore may not send a blue notice. CMS may consider movement from one benchmark plan to another offered by the same sponsor “shifting”. If this is the case, beneficiaries may receive the information about their new plan in the Annual Notice of Change sent by the plan as opposed to receiving a separate notice. Regardless, all beneficiaries will have to carefully review their annual notice of plan changes before making final decisions.

Will People Continue to Get Low Income Subsidies (LIS) or
Extra Help for plan year 2007?
Dual Eligibles: People who are full dual eligibles (eligible for Medicaid and Medicare, including those who are in Medicare Savings Programs) are “deemed eligible” for the Low Income Subsidy (LIS) or assistance provided by Medicare to cover some of the cost burdens of the Part D benefit. They do not have to apply separately. CMS is charged with ensuring that LIS will continue for plan year 2007.

Starting in July 2006, anyone eligible for their state Medicaid program and Medicare will be deemed eligible for full LIS in their Medicare Part D plan. CMS will check every month from July 2006 to December 2006 for eligibility. Those in a medically needy program who meet their spend down or share of cost in any one month during this period will be deemed eligible for the full LIS for the Medicare plan year 2007.

People in Medically Needy Programs with a spend down or share of cost that is not met during the eligibility months: Those who were deemed eligible for LIS for 2006 and will not be deemed for 2007 should receive a letter from CMS in September advising them that they will have to apply for the LIS in order to receive it. The letter will include an application for LIS with a stamped return envelope.

Many people living with HIV who are in medically needy programs may have had their spend down or share of cost paid by the AIDS Drug Assistance Program (ADAP) in 2005. With the advent of Medicare Part D in 2006, ADAP no longer was able to pay the Medicaid spend down or share of cost.

Because Medicare now pays for drugs, it is unlikely that many will incur their Medicaid spend down and they will receive the letter advising them to apply for LIS. Even if they don’t meet the LIS criteria, they should apply. It is important to keep copies of all interactions with Medicaid or Medicare. In California, people will need to show that they have applied for LIS to continue their ADAP assistance. Other state ADAPs may also have that requirement. Those who meet spend down or share of cost in any month from July 2006 to December 2006 will be deemed eligible for the full LIS.

People who applied and qualified for their LIS: The Social Security Administration (SSA) is charged with reviewing eligibility for people who applied and qualified for LIS before May 2006. Those who qualified after that time won’t be reviewed until August 2007. SSA will be sending a letter explaining the process and asking people to review what SSA currently has on file for their income and assets. If their income and assets remain the same, they do not need to take action.

If it has changed, they must return the form to CMS within 15 days. CMS will send another letter and form. People must fill out the form and return it to SSA within 30 days in order to continue their LIS assistance.

SSA expects to send out more than a million letters in the first couple of weeks in September 2006.

Problems with Medicare Part D Premiums
Paid Directly from Social Security Checks
People who pay a premium for their Medicare Prescription Drug plan can pay it directly to the plan or have it withheld from their monthly Social Security checks. The choice is made on the Part D plan application. We advise people not to have their premium payments withheld because of the number of errors associated with this mechanism. Beneficiaries who choose the withholding option should watch their Social Security checks closely. If problems arise, notify the plan and CMS.

A recent error resulted in 230,000 people mistakenly receiving a premium refund in their August Social Security check. The refund was either a check or a direct deposit to their bank account. CMS has sent a letter to these beneficiaries explaining how they can return the money. However, the letters didn’t fully explain beneficiaries’ rights.

The Center for Medicare Advocacy filed a lawsuit alleging that CMS did not give adequate notice concerning their rights for repayment to people who received mistaken Social Security overpayments. A preliminary injunction was granted. For the time being beneficiaries shouldn’t take any action on repayment until CMS sends additional information.

In addition to the mistaken refunds, some people who have switched plans continue to have premiums withdrawn from their checks for the plans they dropped. Some have had delays in the withdrawal causing a very large amount representing several months’ premiums to be taken out of one check, causing them financial hardship. Others have opted to have premium withdrawals from their checks but are still receiving bills from their Medicare Part D plan. Some who should have their premium covered by their LIS are having premiums withdrawn from their check.

People who experience a problem with premium withdrawal should contact CMS at 1-800-633-4227. For further information, check the updates available at National Senior Citizen Law Project at www.nsclc.org.

Getting Through the Part D Gap (or Donut Hole)
Many people living with HIV will have help from ADAP through the Medicare Part D coverage gap or donut hole. However, in some states, ADAP may not be able to assist or people may not qualify. People without assistance will face difficult cost burdens and be looking for help with costs. CMS published tip sheets on how to find assistance during the coverage gap. The tip sheet for beneficiaries can be found at www.medicare.gov.

Unfortunately there are mistakes in the information and some of it is misleading. Before relying on the tip sheet for Guidance, see the Center for Medicare Advocacy’s analysis at www.medicareadvocacy.org.

Additionally, the CMS materials provide a link to a website (www.rxassist.org) that lists pharmaceutical patient assistance programs that may be available to Medicare Part D beneficiaries. (PAPs are patient assistance programs that provide free or low-cost drugs to people who can’t access them any other way.) However, this information may not be up to date or entirely accurate. The link provides a good starting point to check on coverage but calling the individual PAP is the best way to get accurate information.

New Medicare Beneficiaries Who Also Receive Medicaid (Medi-Cal in California)
On July 21, 2006, CMS advised states that it wasn’t necessary to tell Medicaid beneficiaries who were becoming eligible for Medicare that their Medicaid prescription drug coverage was being terminated. Prior to that, state Medicaid programs had to let newly eligible Medicare beneficiaries know that their Medicaid prescription coverage was ending in advance of actually ending the benefit. Now some beneficiaries may have their Medicaid coverage ended without notice.

People who find themselves cut off from their Medicaid coverage without having a Medicare plan should ask their pharmacist to use the Point of Service option (called Wellcare or Anthem) to enroll them in a plan so that they can get their medications.

The Politics of Medicare Part D
There continues to be major problems with Medicare Part D that can only be resolved by Congress. Unfortunately, Congress has not moved in this session. Among many issues, advocates have called on Congress to delay the penalty for late enrollment in Medicare Part D due to the confusion and difficulty of getting information during the rollout of Part D. In addition, although people affected by Hurricane Katrina were granted a waiver of the late enrollment penalty, people affected by Hurricane Rita were not. Congress failed to address either of these issues before it went on recess and advocates are urging them to address it upon their return.

Allowing ADAP assistance to count toward True Out of Pocket (TrOOP) expenditures in Medicare would be of great assistance to people living with HIV. However, this issue has not been taken up in this Congress.

Congressman Waxman sent a letter to Secretary Leavitt regarding what he and his staff believe to be inaccurate claims on the costs of Medicare. Congressman Waxman claims that rather than the costs remaining stable or decreasing as CMS has publicly claimed, Mr. Waxman’s staff’s analysis shows costs increasing for Medicare Part D beneficiaries. The letter can be viewed at www.democrats.reform.house.gov.

New Resources
The National Senior Citizens Law Center published two new Part D resources, Medicare Part D Exceptions and Appeals: A Practical Guide and Medicare Part D Comparison of PDP and MA-PD plans Enrollment, Change of Enrollment and Disenrollment. They are available at www.nsclc.org by clicking on the appropriate “quick link”.

Thanks to the National Senior Citizens Law Center for their research on many of these issues.