Medicare Prescription Drug Coverage

1. Medicare Prescription Drug Coverage

2. Medicare Prescription Drug Coverage Referred to as Medicare Part D Available to everyone with Medicare Drug plans approved by Medicare Run by private companies Must be enrolled in a plan to get coverage Coverage provided through Medicare Prescription Drug Plans (PDPs) Medicare Advantage with Prescription Drugs (MA-PDs) Understanding Medicare Prescription Drug Coverage

3. Part D Eligibility Requirements To be eligible to join a Prescription Drug Plan You must have Medicare Part A and/or Part B To be eligible to join Medicare Advantage plan with drug coverage You must have Part A and Part B You must live in plan’s service area You cannot be incarcerated You must be enrolled in a plan Understanding Medicare Prescription Drug Coverage

4. Covered Drugs Prescription brand-name and generic drugs Approved by FDA Used and sold in U.S. Used for medically-accepted indications Includes drugs, biological products, and insulin Supplies associated with injection or inhalation Medicare Drug Coverage Under Part A, Part B and Part D

5. Required Coverage “All” drugs in 6 categories must be covered Cancer medications HIV/AIDS treatments Antidepressants Antipsychotic medications Anticonvulsive treatments for epilepsy and other conditions Immunosuppressants Understanding Medicare Prescription Drug Coverage

6. Vaccines All Part D drug plans must cover: All commercially available vaccines e.g., shingles vaccine Note: Except those covered under Part B e.g., flu shot Contact drug plan for more information Medicare Drug Coverage Under Part A, Part B and Part D

7. Drugs Not Covered by Part D Excluded by law from Medicare coverage Anorexia, weight loss or weight gain drugs Erectile dysfunction drugs Fertility drugs Drugs for cosmetic or lifestyle purposes e.g., hair growth Drugs for symptomatic relief of coughs and colds Prescription vitamin and mineral products except prenatal vitamins and fluoride preparations Non-prescription drugs Barbiturates and benzodiazepines To be covered in 2013 Medicare Drug Coverage Under Part A, Part B and Part D

8. Drugs Not Covered by Part D (continued) Medicare Part A or Part B covered drugs Unless you don’t meet Part A or B coverage requirements Plan may choose to cover excluded drugs At their own cost, or Share the cost with members Understanding Medicare Prescription Drug Coverage

9. Access to Covered Drugs Plans must cover at least two drugs in each category Coverage and rules vary by plan Plans can manage access to drug coverage through Formularies (list of covered drugs) Prior authorization (doctor requests before service) Step therapy (type of prior authorization) Quantity limits (limits quantity for period of time) Understanding Medicare Prescription Drug Coverage

10. Formulary • A list of prescription drugs covered by the plan • May have “tiers” that cost different amounts Understanding Medicare Prescription Drug Coverage

11. Prior Authorization Doctor must contact plan for prior authorization Before prescription will be covered Must show medical necessity for that particular drug Ask plan for prior authorization requirements Process for requests may vary by plan Understanding Medicare Prescription Drug Coverage

12. Step Therapy Type of prior authorization Person must try a similar, less-expensive drug that has been proven effective Doctor can request an exception if Tried similar, less expensive drug and it didn’t work, or Step-therapy drug is medically necessary Understanding Medicare Prescription Drug Coverage

13. Quantity Limits Plans may limit the quantity of drugs they cover Over a certain period of time For reasons of safety and/or cost Understanding Medicare Prescription Drug Coverage

14. If Your Prescription Changes Get up-to-date information from plan By phone or on plan’s website Give doctor copy of plan’s formulary If the new drug is not on plan’s formulary Can request a coverage determination from plan May have to pay full price if plan still won’t cover drug Understanding Medicare Prescription Drug Coverage

15. Formulary Changes Plans may change categories and classes Only at beginning of each plan year (Plan year is January through December) May make maintenance changes during year Plan usually must notify you 60 days before changes May be able to use your drug until end of calendar year May ask for exception if other drugs don’t work Plans may remove drugs withdrawn from market By the manufacturer or the Food and Drug Administration, without 60 day notification Understanding Medicare Prescription Drug Coverage

16. Medicare Drug Plan Can be flexible in benefit design Must offer at least a standard level of coverage May offer enhanced benefits Benefits & costs can change from year to year Monthly premium varies by plan Some plans have no premium Possible yearly deductible No more than $320 in 2012 Copayments or coinsurance May depend on how much spent that year Understanding Medicare Prescription Drug Coverage

18. Monthly Premiums • Starting January 1, 2011 part D monthly premiums may be higher based on income • Includes PDP and MA-PD plans • If income is above • $85,000 filing individual tax return • $170,000 filing a joint tax return Additional monthly adjustments will be charged in addition to part D premiums • SSA will be contacting those who have to pay higher premiums in November

19. True Out-of-Pocket Costs (TrOOP) TrOOP is the amount of money (out-of-pocket) that can be used to reach catastrophic coverage Payment sources that count Plan member Family members or other individuals Illinois Cares Rx payments SSA “Extra Help” (low-income subsidy) Charities Not if established/controlled by current/former employer or union Indian Health Services and AIDS Drug Assistance Programs Part D manufacturerdiscount for covered Brand-name drugs during coverage gap Understanding Medicare Prescription Drug Coverage

20. Out-of-Pocket Costs that Do Not Count Payment sources that do not count Monthly drug premium payments Group health plans Including employer or union retiree coverage Government-funded programs including TRICARE and VA Manufacturer Patient Assistance Programs Other third-party payment arrangements Part D plan discounts for covered drugs during coverage gap Understanding Medicare Prescription Drug Coverage

21. Coverage Gap Discount • If you reach the coverage gap in 2012 you may receive discounts on both brand-name and generic drugs • 50% discount on brand-name prescription drugs in 2012 • 14% discount on generic drugs in 2012 • Additional savings in coverage gap each year • Gap to be closed in 2020 Understanding Medicare Prescription Drug Coverage

22. Cost Sharing for Brand-name Drugs in the Medicare Part D Coverage Gap, 2010-2020

23. Cost Sharing for Generic Drugs in the Medicare Part D Coverage Gap, 2010-2020

24. Understanding Medicare Prescription Drug Coverage

25. Understanding Medicare Prescription Drug Coverage

27. Understanding Medicare Prescription Drug Coverage

28. Creditable Drug Coverage If you have other drug coverage It may or may not be creditable If creditable, it meets or exceeds Medicare’s minimum standards With creditable coverage Will not have to pay a late-enrollment penalty Plans inform yearly about whether creditable e.g.; employer group plans, retiree plans, VA, TRICARE and FEHB Understanding Medicare Prescription Drug Coverage

29. Penalty Calculation Late Enrollment National base beneficiary premium $30.23 in 2012 Can change each year Pay 1% (of $30.23 in 2012) for every month eligible but not enrolled Unless person has creditable coverage Penalty added to premium payment Understanding Medicare Prescription Drug Coverage

30. Extra Help with Drug Cost Sometimes called the Low-Income Subsidy (LIS) For people with lowest income and resources Pay no premiums or deductibles & small or no copayments Those with slightly higher income and resources Pay reduced deductible and a little more out of pocket No coverage gap for people who qualify for LIS Understanding Medicare Prescription Drug Coverage

31. Qualifying for Extra Help Some will automatically qualify if they have Medicare and; Get full Medicaid benefits Supplemental Security Income (SSI) Medicare Savings Program Medicaid help with some Medicare cost All others must apply with Social Security Online at www.socialsecurity.gov, or Call 1-800-772-1213 (TTY 1-800-325-0778) Ask for “Application for Help with Medicare Prescription Drug Plan Costs”(SSA-1020) Understanding Medicare Prescription Drug Coverage

32. Income and Resource Limits • Income • Below 150% Federal poverty level • $16,335 per year for a single person* or • $22,065 per year for a married couple* • Based on family size • Resources • Up to $12,640 (individual) • Up to $25,260 (married couple) • Includes $1,500/person funeral or burial expenses • Counts savings and stocks • Does not count home you live in 2011 amounts 2011 amounts *Higher amounts for Alaska and Hawaii Understanding Medicare Prescription Drug Coverage

33. Auto- and Facilitated Enrollment CMS identifies and enrolls people each month Randomly assigned to plans Premiums at or below regional low-income premium subsidy amount May join MA plan meeting special needs If you are already enrolled in an MA plan You’ll be enrolled in the same plan with Rx coverage (MA-PD) If offered by your current plan Understanding Medicare Prescription Drug Coverage

34. Medicare and Full Medicaid You are auto-enrolled in a plan unless You are already in a Part D plan You choose and join a plan on your own You call the plan or 1-800-MEDICARE to opt out You are covered 1st month you are covered by Medicaid and are entitled to Medicare Will get auto-enrollment letter on yellow paper You have a continuous Special Enrollment Period Understanding Medicare Prescription Drug Coverage

35. Others Qualified for Extra Help Facilitated into a plan unless You already are in a Part D plan You choose and join own plan You’re enrolled in employer/union plan receiving subsidy You call the plan or 1-800-MEDICARE to opt out Coverage is effective 2 months after CMS notifies Will get facilitated enrollment letter on green paper Have continuous Special Enrollment Period Understanding Medicare Prescription Drug Coverage

36. People New to Extra Help You can apply for Extra Help any time If denied, can reapply if circumstances change If in a Medicare drug plan and later qualify Plan is notified you qualify for Extra Help Plan refunds costs back to effective date of Extra Help Deductibles/Premiums Cost-sharing assistance Understanding Medicare Prescription Drug Coverage

37. Enrollment Notices CMS notifies people of enrollment in a PDP Auto-enrollment letter on yellow paper Facilitated enrollment letter on green paper Denotes either full or partial subsidy Includes list of area plans at/below regional low-income premium subsidy amount MA plan sends notice if enrollment in MA-PD Understanding Medicare Prescription Drug Coverage

38. Re-establishing Eligibility for People Who Automatically Qualify CMS re-establishes eligibility in the Fall For next calendar year If you no longer automatically qualify CMS sends letter in September on gray paper Includes SSA application If you automatically qualify & your copayment changed CMS sends letter In early October on orange paper Understanding Medicare Prescription Drug Coverage

39. Extra Help – What You Pay *If you join a basic plan with a premium at or below the regional low-income premium subsidy amount. Understanding Medicare Prescription Drug Coverage

40. LI-NET • Limited Income Newly Eligible Transition Program (LI-NET) • Combined auto-enrollment and Point-of-Sale Facilitated Enrollment • For full duals and SSI-only beneficiaries • Provides Part D coverage for all uncovered • Full duals and SSI-only beneficiaries retroactively • LIS eligible beneficiaries on a current basis Understanding Medicare Prescription Drug Coverage

41. LI-NET Coverage and Enrollment • Coverage • Full Dual/SSI-only up to 36 months • Partial Dual/LIS Applicants up to 30 days • Unconfirmed up to 7 days • Enrolled in LI NET for temporary coverage • In Standard PDP for future coverage • Open Formulary, No Prior Authorization, No Pharmacy Restrictions • Standard PDP Rights for Enrollees, Eligibility Reviews for Non-Enrollees Understanding Medicare Prescription Drug Coverage

42. Access to LI-Net • Three ways to access the LI-NET program • Auto: Enrollment by CMS • Point of Service (POS) • Submitting a receipt for drugs already paid out-of-pocket • During eligible periods

43. State Pharmacy Assistant Program (SPAP) • In Illinois, SPAP is Illinois Cares Rx • Two types of coverage • Illinois Cares Rx Basic • formerly Pharmaceutical Assistance Program • Illinois Cares Rx Plus • formerly SeniorCare • Can also assist individuals not on Medicare

44. Illinois Cares Rx for those on Medicare • Will assist with some cost sharing with a coordinating plan • Deductible up to $320 of total drug cost • Initial coverage up to $2,930 of total drug cost • Coverage gap from $2,930- $6,657.50 of total drug cost • Catastrophic coverage begins at $6,657.50 – provides NO wrap coverage NOTE: Applicants must apply for LIS through Social Security at least once and follow instructions from SSA if qualify for any portion of assistance

45. State Pharmacy Assistance Program Medicare and Illinois Cares Rx • Provides wrap-around coverage • Must be enrolled in a coordinating PDP or MA-PD plan in order to get the wrap • Pays the premium for a coordinating Part D plan, or • Expands greatly the population served by the state of Illinois • Costs incurred by IL Cares Rx can count toward out-of-pocket limit • Applications can be filed on line at www.cbrx.il.gov/

46. Medicare and Illinois Cares Rx • Must meet annual income requirement of • $21,780* for a household of 1 • $29,420* for a household of 2 • $37,060* for a household of 3 • Must follow Part D plan rules for coverage • Must Apply for SSA “Extra Help” • At least once, even if you do not meet requirements * Income amounts are based on an application filed in 2010 using 2009 income

47. Illinois Cares Rx • For individuals who need drug assistance but are not on Medicare will have to • Meet income requirements • For Plus or Basic coverage • Be 65yrs or older; or • Persons with disability • Follow Illinois Cares Rx formulary list

48. Illinois Cares Rx Basic • Must be without Medicare coverage and either • Age 65 or older, or • A person with disabilities • Annual income of no more than • $21,780* for a household of 1 • $29,420* for a household of 2 • $37,060* for a household of 3 * Income amounts are based on an application filed in 2010 using 2009 income

49. Illinois Cares Rx Plus • Illinois Cares Rx Plus provides coverage for almost all prescription drugs • Must be a citizen or qualified non-citizen 65 or older without Medicare • Annual income of no more than $21,780* (single) or $29,420* (married couple) * Income amounts are based on an application filed in 2010 using 2009 income

50. Things to Consider Before Joining a Plan Important questions to ask Do you have other current health insurance coverage? What about current prescription drug coverage? Is any prescription drug coverage you might have as good as Medicare drug coverage? How does your current coverage work with Medicare? Could joining a plan affect your current coverage? Could joining a plan affect a family member’s coverage? Understanding Medicare Prescription Drug Coverage