Medicare and New and Existing Opportunities for Financial Assistance

1. Medicare and New and Existing Opportunities for Financial Assistance National Association of Health Underwriters June 2009

2. What we will cover today • What is the Medicare drug benefit (Part D)? • Who can get extra help? • How do you get extra help? • How do you get drug coverage? • Are there other programs that can help?

3. Six things you should know about the Medicare drug benefit • Medicare drug benefit began January 1, 2006 • Anyone entitled to Medicare Part A and/or enrolled in Part B can buy coverage • All coverage through private drug plans • You pay a premium as well as a deductible and coinsurance up to a maximum of $4,350 in 2009 • Much lower costs for people with low incomes • Your premium does not count toward your maximum • $2.40/$6.00 co-pays or 5% of the price after yearly $4,350 in out-of-pocket spending • You do not have to get the drug benefit, but you might have to pay penalty if you enroll later • Medicare drug benefit might coordinate with drug coverage you already have

4. Which drugs will the Medicare drug benefit cover? • Each Medicare drug plan has its own formulary (list of covered drugs) • Can change formularies throughout the year • Medicare drug plans must cover at least two drugs under each type of drug class • A few drugs are excluded from Medicare coverage by law • Some examples are benzodiazepines, and barbiturates • Drug plans usually provide incentives for you to use generic drugs by offering lower out-of-pocket costs for those drugs (cost tiers) • If a drug is not on the formulary or if you get it from a pharmacy not in the plan's network, you will have to pay the full cost yourself • You can ask your plan to cover the drugs you need • You and/or your doctor can request an exception

5. People with Medicaid • If you had Medicaid, your Medicaid drug coverage ended and Medicare covered your drugs beginning January 1, 2006. • You do not have to pay a premium or deductible (if your plan premium does not exceed the subsidy) • You will have continuous coverage ( no gap) • You may have a small co-pay for each prescription: • At or below 100% FPL (federal poverty level): You pay $1.10 for generic and $3.20 for brand-name • Above 100% FPL: You pay $2.40 for generic and $6.00 for brand-name • FPL $10,830 a year for singles and $14,570 a year for couples in 2009 • No co-pay after reaching $4,350 in out-of-pocket spending (your co-pays plus Medicare’s extra help) • Beneficiaries who have full Medicaid benefits and reside in an institution will have no co-payments.

6. People without Medicaid and incomes below 135% FPL • If you do not have Medicaid, your assets are low and your 2009 income is below $14,620 ($19,670 for couples): • You will not have to pay a premium or deductible (if your plan premium does not exceed the subsidy) • You will have continuous coverage ( no gap ) • You will have a small co-pay for each prescription: • $2.40 for generic and $6 for brand-name • No co-pays after reaching $4,350 in out-of-pocket spending

7. People without Medicaid and incomes below 150% FPL • If you do not have Medicaid, your assets are low and your 2009 income is below $16,245 ($21,855 for couples) you will pay: • Sliding scale monthly premium • Up to a $60 yearly deductible • Continuous coverage prior to reaching the $4,350 in out-of-pocket spending • Coinsurance of 15% up to the out-of-pocket limit ($4,350) • Co-payment of $2.40 and $6.00, respectively, beyond the out-of-pocket limit.

8. How do you get extra help? • Some people will get extra help automatically • Some will have to apply for extra help • Everyone will have to choose a Medicare prescription drug plan to get Medicare drug coverage

9. Who gets extra help automatically? • If you are enrolled in: • Medicaid • Supplemental Security Income (SSI) • Medicare Savings Program (MSP) such as QI-1, SLMB or QMB • You do not have to apply for extra help—you get it automatically • If you are enrolled in: • Medicaid • Supplemental Security Income (SSI) • Medicare Savings Program (MSP) such as QI-1, SLMB or QMB • You do not have to apply for extra help—you get it automatically

10. What happens if you have Medicaid spend-down? • You automatically get extra help the first month you meet your spend-down amount • Get extra help for the rest of the calendar year • Once eligible for extra help, treated like everyone with Medicaid

11. What if you do not automatically get extra help? • You have to fill out an application • You can apply through: • Social Security Administration • Print application • Online application http://www.ssa.gov/prescriptionhelp/ • Medicaid

12. Does it matter where you apply? • Social Security—generally an easier process • You can self-attest to your income and assets • You can apply online or mail-in application • No in-person interview • But will not check to see if you are eligible for other assistance programs • Medicaid • Will check to see if you are eligible for other programs that could help you with your health care costs • If your assets are higher than limits, but state has no asset test for MSP, you can get extra help that way • May have more liberal income calculations • You may need to show proof of income and assets • May require in-person interview

13. How do you apply through Social Security? • Online application available on http://www.ssa.gov/prescriptionhelp/ • Print applications mailed to people with low Social Security income • On a monthly basis • Must use original print application • No photocopies • At local Social Security office

14. How should you count your income and assets? • Must include income and assets of spouse unless separated • Earned income: wages, earnings from self-employment • Unearned income: Social Security, Veterans Benefits, pension, etc. • Assets: stocks, bonds, mutual funds, retirement accounts, checking and savings accounts • Certain income and assets will not be counted, so apply even if it looks like you are over the limits

15. Can you get help completing your application? • Call SSA at 800-772-1213 • Talk to a counselor at your local Medicaid office • Call your State Health Insurance assistance program (SHIP) • Ask a friend or relative for help • A personal representative can fill out the application for you

16. What if you are denied assistance? • If you apply through Social Security, request an administrative review from Social Security. • Choose a telephone hearing or case review. • You can appoint a personal representative. • SSA decision can be appealed in federal court. • If you apply through Medicaid, you must appeal through Medicaid.

17. How do you get drug coverage if you have Medicaid? • You must enroll in a Medicare private drug plan • You will be randomly assigned and enrolled in a plan if you do not sign up for one • Medicare will send you a letter telling you which plan it is enrolling you in if you do not sign up for one on your own • Medicare determines the prospective effective date • You can change your drug plan once a month

18. How do you get drug coverage if you have an MSP or SSI? • Enroll in a Medicare private drug plan • You will be randomly assigned and enrolled in a plan if you do not enroll in one • Medicare will send you a letter telling you which plan it is enrolling you in if you do not sign up for one on your own • Medicare determines the prospective effective date • You can change your drug plan once a month

19. How do you get drug coverage if you applied for extra help? • Once you get notice saying you qualify for extra help you should select and enroll in a Medicare private drug plan. • Medicare will determine when your coverage begins • Medicare will automatically enroll you in a plan if you do not enroll in one. • You can change your drug plan once a month

20. There are other programsthat can help • If your state has a prescription drug program, sign up • If your income is low and you do not have Medicaid or help paying your Part B premium through a Medicare Savings Program: • Find out if you are eligible for a Medicare Savings Program • If you enroll in an MSP you will not have to apply for the extra help paying for your Medicare drug costs

21. Extra help could affect other assistance programs • What you pay for prescription drugs now is deducted from your income to qualify for: • Food Stamps • Help paying your rent or public housing (such as Section 8 Housing) • Help paying your heat (LIHEAP) • If Medicare pays for your prescription drugs, your income will be higher • If you are in several of these programs, call your local social services department and ask for a counselor who can help you

22. Timeline: important dates Mid-May • Social Security LIS and MSP Outreach Letter: Informs people who may be eligible for Medicare Savings Programs about MSP and the extra help available for prescription drug plan costs.

23. Late August Social Security - Letter to Review Eligibility for Extra Help (SSA Form No. 1026) Informs people selected for review that they should see if they continue to qualify for extra help. Includes an “Income and Resources Summary” sheet.

24. September CMS Loss of Deemed Status Letter (GREY Letter) Informs people that they no longer automatically qualify for extra help as of January 1. • Early October CMS Change in Extra Help Co-payment Letter (ORANGE Letter) Informs people that they will continue to automatically qualify for extra help, but their co-payment levels will change as of January 1.

25. October Plan LIS Rider By October 31, all people who qualify for the LIS will get an LIS rider from their plan telling them how much subsidy they will get in the new year towards their Part D premium, deductible, and copayments. • Late October/ Early November CMS LIS Choosers Letter (TAN Letter) Informs LIS beneficiaries who chose a plan on their own that their plan’s premium is rising above the regional LIS premium subsidy amount, and they will be responsible for paying a portion of their plan’s premium unless they join a new plan.

26. Late October/Early November CMSReassignment Letter (BLUE Letter) Informs people that their current plan is leaving the Medicare Program and they will be reassigned to a new plan effective January 1, unless they join a new plan on their own by December 31. • Late October/ Early November CMS Reassignment Letter (BLUE Letter) Informs auto-enrollees that because their plan’s premiums are increasing above the regional LIS premium subsidy amount, they will be reassigned to a new plan effective January 1, unless they join a new plan on their own by December 31.

27. November Social Security Part B Income-Related Premium Adjustment Notice - Tells higher-income consumers about income-related Part B premium adjustments. • November Social Security LIS Redetermination Decision Letter Begins - Social Security begins mailing decision letters about LIS eligibility for the coming year.

28. Late November Social Security LIS and MSP Outreach Letter (Form SSA-L441) Informs people who may be eligible for QDWI about the Medicare Savings Programs and the extra help available for Medicare prescription drug plan costs. • Daily - ongoing CMS Deemed Status Letter (Pub No. 11166) (PURPLE Letter beginning in Sept/Oct) Informs people that they will automatically get extra help, including people 1) with Medicare and Medicaid, 2) in Medicare Savings Program, and 3) who receive Supplemental Security Income (SSI) benefits.

29. Timeline: important dates November 15 to December 31st • Annual enrollment period for Medicare drug benefit. January 1st • Medicare drug benefits begin.

30. Things to remember • Getting extra help is a two-step process: • Qualify for extra help (automatically or by applying) • Enroll in a Medicare private drug plan • People with Medicare and Medicaid (including spend-down) started getting their drugs through Medicare January 1, 2006 • You can apply for extra help through Social Security or your local Medicaid office • Generally, applying through Social Security will be easier

31. Any Questions?