Pharmaceutical Assistance Contract for the Elderly (PACE) Program began July 1, 1984

1. PACE / PACENET Program What is PACE / PACENET? • Pharmaceutical Assistance Contract for the Elderly (PACE) • Program began July 1, 1984 • PACE Needs Enhancement Tier (PACENET) • Program began January 1, 1997 • State Prescription Assistance Program • Funded by the Pennsylvania Lottery • $216.2 million spent annually on prescriptions (2011)

2. Who is Eligible for PACE / PACENET? Of the 1.9 million older Pennsylvanians… • 1.5 million are eligible for the program • Current Enrollment (Aug. 2012): • PACE 111,000 • PACENET 178,000 • Total 289,000 • Average PACE cardholder • Female, 79 years old, widowed, 4-5 disease states • 83% are enrolled in Medicare Part D

3. Program Eligibility Requirements Who Qualifies for PACE / PACENET? • Pennsylvania resident • Age 65 or older • Can apply 30 days before 65th birthday – benefit effective on 65th birthday • Income – based on previous calendar year • PACE: less than $14,500 for single person • less than $17,700 for married couple • PACENET: less than $23,500 for single person • less than $31,500 for married couple • Assets are not counted

4. Program Benefit PACE • Prescription drugs, including insulin, insulin syringes & needles • Generic medications: $6 copay (30-day supply) • Brand name medications: $9 copay (30-day supply) • Can get 90-day supply with PACE & Part D • PACENET • Prescription drugs covered including insulin, insulin syringes & needles • Generic medications: $8 copay (30-day supply) • Brand name medications: $15 copay (30-day supply) • Can get 90-day supply with Part D • Pay PACENET deductible or Part D monthly premium

5. Part D and Low Income Subsidy Medicare Part D • PACE/PACENET coordinates benefits with Part D • No coverage gap • Lower copayments • Program pays Part D premium for most PACE cardholders • Part D deductible coverage for members with Part D • PACE/PACENET is creditable coverage • Extra Help / Low Income Subsidy • Enrollees with low income and few assets • Provides for no or reduced Part D premium and deductible • No coverage gap • Low copayments • Contact APPRISE Program for help in applying • 1-800-783-7067

6. STANDARD MEDICARE PART D PRESCRIPTION DRUG BENEFIT, 2012 Beneficiary OOP Costs: Total Drug Costs: Catastrophic Coverage 5% $6,730 Coverage Gap 50% After Brand Discount 86% After Generic Discount BENEFICIARY PAYS $3,725.50 $2,930 Initial Coverage Phase 25% BENEFICIARY PAYS $652.50 $320 Deductible 100% BENEFICIARY PAYS $320 TOTAL BENEFICIARY OUT-OF-POCKET (OOP) COSTS EQUALS $4,700 PRIOR TO CATASTROPHIC COVERAGE.

7. PACEPLUS MEDICARE PART D PRESCRIPTION DRUG BENEFIT, 2012 Beneficiary OOP Costs: Total Drug Costs: Catastrophic Coverage 5% $6,730 Initial Coverage Gap 12% After Brand and Generic Discounts BENEFICIARY PAYS $456 $2,930 Coverage Phase 12% BENEFICIARY PAYS $313 $320 Deductible 12% BENEFICIARY PAYS $38 TOTAL BENEFICIARY OUT-OF-POCKET (OOP) COSTS EQUAL $807 PRIOR TO CATASTROPHIC COVERAGE.

8. Safe and Effective Rx Utilization Program History • Comprehensive and aggressive drug utilization review with prescription payment stopped at pharmacy counter • Developed by physicians and pharmacists • Tailored for older patients • Goals are safety and effectiveness • Dose • Duration • Concurrent Usage

9. Safe and Effective Rx Utilization Prospective Drug Review (since 1992) • Physician focused medical exception process • Step therapy for selected therapeutic classes • Sulfonylurea, insulin or metformin before pioglitazone (Actos) • Calcium acetate (Phoslo) before sevelamer (Renagel) • A-rated generic substitution • Drug utilization review coordinated with Part D drug plans • Supplemented by academic detailing since 2005

10. How Do You Reach the Program? • Enrollment https://pacecares.magellanhealth.com • Phone 1-800-225-7223 • PACE Portalhttps://papaceportal.magellanhealth.com