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NOTES and Updates - Fall
2005
"Autumn is a second
Spring, when every leaf is a flower."
The Medicare prescription drug plan, enacted by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), begins on January 1, 2006. This very complex plan will provide prescription drug coverage for over 43 million seniors. This article discusses the basic drug program and rules regarding eligibility, costs, the standard benefit plan and alternative plans, what drugs will be on the plans, and enrollment. To begin, you should understand that each participant will select and enroll in one of a number of stand alone Prescription Drug Plans (PDP) and Medicare Advantage-Prescription Drug plans (MA-PD) offered by various private providers in the participant's area. Any person entitled to Medicare Part A benefits or enrolled under Medicare Part B is eligible to enroll in a prescription drug program, except an incarcerated person. The costs a person enrolled in a PDP or MA-PD will pay, unless he qualifies for a low-income subsidy or is on Medicaid/Medi-Cal, include a monthly premium, a deductible, coinsurance, and co-payments. The first cost is a monthly premium for being on the benefit plan. The average premium per month for the PDPs available in California is expected to be about $23. MA-PDs (which are HMOs and PPOs) which do not now include a prescription drug plan for members will add a premium for the drug plan. Further, all plans will require participants to make out-of-pocket payments for a deductible, coinsurance, and/or co-payments for the drugs purchased, depending on the plan in which he or she enrolls and the total cost of the drugs he or she purchased during a year. A standard benefit plan, which will usually be a PDP, will require the following annual out-of-pocket payments (OOPs) by the participant for the prescription drugs purchased during a year in addition to the monthly premiums: Deductible: Each participant on a standard benefit plan will pay out-of-pocket for the entire cost of the first $250 in covered drugs purchased each year as a "deductible." Coinsurance: Once the deductible is met, the plan participant pays a "coinsurance" out-of-pocket for the covered prescriptions he or she purchases in that year. This coinsurance is equal to 25% of the cost of the next $2000 in covered drugs purchased that year. Doughnut hole: After $2250 in covered prescription purchases, the participant must pay out-of-pocket for 100% of the cost for the next $2850 of covered drugs purchased. That is, the participant must pay the entire cost of covered drug purchases from $2250 to $5100. This range is called the "doughnut hole." Co-payment: Once the beneficiary has purchased covered prescription drugs of $5100 (and by then paid a total of $3600 out-of-pocket on these drugs for the year), he or she makes an out-of-pocket co-payment for all additional covered prescription drugs purchased that year equal to the greater of either $2 per generic or non-preferred brand-name drug and $5 per preferred brand-name drug or 5% of the cost. A prescription drug plan provider may offer an alternative to the standard benefit plan. The value of an alternative plan must be equal to or greater than the value of the standard benefit plan, and the deductible and out-of-pocket limit on the alternative plan may not be higher than those in the standard benefit plan. These alternative plans will often involve tiered co-payments and may eliminate or reduce the standard deductible and/or coinsurance. Providers who offer a standard or ordinary alternative plan in a region may also offer an enhanced alternative plan. These enhanced alternative plans, offered at a higher monthly premium cost, often will reduce or eliminate the standard benefit plan deductible, coinsurance, and/or co-pays and may include coverage of drugs not included in the standard benefit plan. Individuals/couples with limited savings (and income at or below 150% of the poverty line) and individuals and couples on Medicaid/Medi-Cal will qualify for government subsidies reducing or eliminating most of the costs of a standard benefit PDP or MA-PD. For eligible individuals with a monthly income of $1097 (for 2005) or less and couples with a monthly income of $1464 (for 2005) or less, there will be no premiums and no deductible, and the participant will have a co-pay for all covered drugs purchased of only $2 per generic or non-preferred brand-name drug and $5 per preferred brand-name drug. For eligible individuals or couples with a monthly income of over the above amounts but at or below $1217 for an individual (for 2005) or $1624 for a couple (for 2005), the participant will pay a sliding scale monthly premium, the entire cost of the first $50 of covered drugs purchased (the deductible), and a coinsurance payment equal to 15% of the cost of the covered drugs bought plus a co-payment for each drug of $2 per generic or non-preferred brand-name drug and $5 per preferred brand-name drug up to a total of $3600 paid out-of-pocket by the participant and by the government to subsidize the participant. The drugs that will be included in the Part D plans are called "covered drugs" and consist only of prescription drugs approved by the Food and Drug Administration (that are required to be covered by Medicaid/Medi-Cal) and certain biological products like insulin and smoking cessation drugs. Prescription drugs for which Medicaid/Medi-Cal payment is optional and drugs for which payment would be covered by either Medicare Part A or Part B are NOT included in the Part D plan. Furthermore, an individual Part D plan is not required to pay for all Part D plan-covered drugs. The list of drugs on a specific plan, called the plan’s "formulary," need only include one or more drugs from each class and category of drugs established by the US Pharmacopoeia. Finally, a plan may change the drugs on its formulary during a year by giving 60 days notice to all affected persons. An eligible individual wishing to enroll in a Part D PDP may do so by filing an enrollment form with the specific plan. The initial open enrollment period for individuals who are already eligible for Medicare Part D, or who become eligible before March 1, 2006, will be from November 15, 2005 through May 15, 2006. The initial open enrollment period for persons who become eligible for Medicare Part D on or after March 1, 2006 will begin the 3 months before the individual turns age 65 and end 3 months after the month the individual turns age 65. After the end of a person’s initial enrollment period, he or she may enroll in a benefit plan, or dis-enroll from one PDP and enroll in another PDP, only during an annual coordinated election period, which is from November 15 to December 31 of each year, beginning in the year 2006. Under certain specific exceptional circumstances, however, a person may enroll in a PDP, or dis-enroll from a PDP and enroll in another PDP or in a MA-PD plan, for a specific special period related to the circumstances involved. If an eligible person fails to enroll in a PDP or MA-PD during the initial enrollment period without “creditable prescription drug coverage” as defined below, he will be subject to a penalty if he wants to join later. The penalty will be an added cost of his Part D premium equal to 1% of the monthly premium for each month the person stays out of the program after his initial open enrollment period. Creditable prescription drug coverage, “creditable coverage,” is a private prescription drug plan with benefits at least as good as the Part D standard benefit plan. Such plans are often part of a retirement package or of a Medi-gap insurance plan. Naturally, there is much more involved in the new Part D plan than we can include in this article. At our Fall client seminar, we will go over more of the basics, review the plans that will be available to persons residing in Santa Clara County, and explain how to determine whether a specific plan will pay for the prescription drugs you take, how to calculate whether a plan will save you money on your covered prescription drugs, and how to appeal to have your drug provider pay for a drug that you need that is not on the plan’s formulary. This may be one of our most popular seminars ever, so please call our office early to let us know that you will be joining us for it on November 10th. SB-1061: Nursing Home Admissions On Elders and the Holidays Holidays are traditionally times of joy and togetherness, but they are also strong reminders of days gone by and friends or loved ones lost, especially for the elderly. While nostalgic feelings can be nurturing, it is important that family members and/or caretakers be alert to signs of depression in older adults, who may be feeling more acutely the passing of time; the absence of parents, siblings and friends who have died; or the distance and separation from people who have moved away. What signs could indicate that an elder needs assistance from a mental health professional? Some of these are obvious, such as suicidal thoughts, a sudden increase in the use of alcohol or medication, and the desire for isolation. Other symptoms are more subtle in nature, like confusion or inability to concentrate, crying more than might be expected due to sentiment, or even irritability. Mood changes of any kind, espcially if they persist beyond a week or two, may indicate that a senior’s temporary sadness is escalating to full-blown clinical depression. Friends, family members or caregivers can do much to help. Take time this holiday season to communicate with the older adults in your life, both near and far. Even a brief phone call or visit can make a significant difference. Be sure to offer regular social outings, including transportation and whatever other services might be needed. If all else fails, provide a listening ear to the elderly, and don’t be afraid to suggest the possibility of depression if you think that is appropriate. Be willing to accompany the individual to a doctor if necessary. Provide a voice of encouragement, being careful not to invalidate a senior adult’s feelings. If you are a senior adult yourself, you can take steps to avoid depression (or at least lessen its effects) in your life. Plan activities that you enjoy during the holidays, and don’t be shy about contacting friends and family members with whom you want to spend time. Of course, you will need to take care of your health by getting enough sleep, eating well, and staying physically active. It is also a good idea to limit the amount of alcohol you drink, as it is a depressant. Good physical health always supports good mental health. Of course, you may do all of these things and still experience depression. If so, speak to your doctor, spiritual advisor, or a trusted friend. Remember that depression is not a sign of weakness, nor is it a normal part of aging that must be borne. Depression is a medical illness, and help is available to those who seek it. back to top
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