Changes for Medicare Part D and Medicare Advantage for 2012
October 6, 2011
The Centers for Medicare and Medicaid Services (CMS) recently announced that, on average, Medicare Advantage premiums will be four percent lower in 2012 than in 2011, and plans project enrollment to increase by ten percent. Of people with Medicare, 99.7 percent will continue to enjoy access to a Medicare Advantage plan and benefits remain consistent with those offered in 2011. This follows an earlier announcement that average prescription drug plan premiums will remain virtually unchanged in 2012.
For 2012, CMS was able to use authority provided by the Affordable Care Act to protect beneficiaries from significant increases in costs or cuts in benefits in 2012, leading to average premium declines for the second year in a row: 2012 premiums are projected to be 11.5 percent below 2010 premiums. In 2012, all beneficiaries will have access to Medicare-covered preventive services without paying a co-pay or deductible, including an Annual Wellness Exam with their physicians. Those who reach the Part D coverage gap, also known as the “donut hole” will receive deep discounts on brand name drugs and expanded coverage for generic drugs under provisions of the Affordable Care Act.
This year marks an important change in Medicare’s annual open enrollment, the time period during which people can choose to change plans or shift from Medicare Advantage to Traditional Medicare. Open Enrollment starts earlier – on Oct. 15, 2011 – and lasts longer (seven full weeks) to give beneficiaries more time to review and make changes to their coverage. As a result, most beneficiaries will need to make their elections for next year’s Medicare coverage by Dec. 7, 2011 rather than the usual date of Dec. 31. It is important to note that dual eligibles (those eligible for both Medicare and Medicaid), receive additional protections that allow them to switch plans at any time during the year.
For the first time, in 2012 CMS will provide financial rewards to those Medicare Advantage plans with high quality scores, under its Five-Star rating methodology. CMS is also allowing Five-Star Medicare Advantage and Part D plans to continuously market and enroll beneficiaries throughout the year, as an extra incentive for high quality performance. Only one percent of Medicare beneficiaries are enrolled in plans that will not be available in 2012 and those enrollees should have already received a notice of non-renewal from their plan. Beneficiaries currently enrolled in a Medicare Advantage plan will revert to Original Medicare if they do not choose a plan on their own; however everyone will need to enroll in a Part D plan to keep their drug coverage. Dual eligible beneficiaries, as well as those eligible for the Part D low-income subsidy (LIS), will be enrolled in a zero-premium drug plan by CMS and will have the option to select a different Medicare plan throughout the year.
Users of the Medicare Plan Finder, available at www.medicare.gov, are now able to compare plans’ quality summary rating from the previous year, identify which drugs may or may not be on a plan’s formulary or be restricted, and compare the cost ranges for plans available in their community. Information on 2012 plans is also available online at www.medicare.gov/find-a-plan/questions/home.aspx.
In addition, Medicare Health and Drug Plan State-by-State Fact Sheets are available at www.cms.hhs.gov/center/openenrollment.asp. The 2012 Plan “Landscape” is available at www.cms.hhs.gov/PrescriptionDrugCovGenIn/.
Plan Changes for “Dual Eligibles” and Low-Income Subsidy (Extra Help) Recipients for 2012
As in each year since 2007, some low-income Medicare beneficiaries that are either concurrently (dually) eligible for Medicaid, or are eligible for the Low-Income Subsidy (also known as “Extra Help”), will be forced to go through a process of plan reassignment for 2012. In many states, a significant number of dual eligibles and LIS live with a serious mental illness. This reassignment process results from changes in plan premiums relative to regional “benchmarks” for 2012. Included below is additional information to assist dual eligibles and LIS recipients going through the reassignment process.
Reassignments and Related Notices to Dual Eligibles and LIS Recipients for 2012
CMS has already begun notifying beneficiaries that are being “auto-reassigned” to new PDPs with a two-page letter on blue paper and an attachment listing the zero premium plans in their region. The letter will have different content, depending on the reason the beneficiary is being reassigned. The following groups of beneficiaries will receive one version of this notice:
- Full-subsidy eligible individuals who will retain their full subsidy eligibility for 2012, that were originally auto-assigned to a plan and who remained in that plan;
- Those whose plan premium for 2012 exceeds the regional benchmark level and, in the case of a plan with a “de minimis” premium increase, whose plan has not elected to waive the increase; or
- Those whose standard benchmark plan has become an enhanced plan.
The notice sent to these individuals will identify three options:
- The individual can remain in the plan to which she or he has been auto-reassigned;
- The individual can stay in the plan in which she or he is currently enrolled, but must inform the plan if making that choice; or
- The individual can choose a different plan at any time.
The letter then refers the recipient to the list of zero premium plans attached to it.
The reassignments are conducted for individuals who meet the criteria on a single day in October when CMS makes the reassignments. CMS will not subsequently sweep enrollment lists for people who meet the criteria later.
Another blue letter from CMS will go to a different group of Extra Help recipients. This letter will also be sent in early November. It will go to:
- Full and partial subsidy eligible individuals, regardless of whether they were auto-assigned to or chose their current plan, who will retain their subsidy for 2011; and
- Individuals whose PDP or MA-PD is terminating in 2012.
The letter will inform individuals that their plans have withdrawn from Part D for 2012 and that they have two options:
- They can remain in the free-standing Part D plan to which CMS has assigned them (the plan is named in the letter); or
- They can, at any time, choose a new Part D plan or a new Medicare Advantage plan.
Both groups receiving letters,whether for plan termination or loss of benchmark status, will receive additional blue letters from CMS in December in which CMS identifies which of the individual's drugs are covered under the plan to which she or he has been assigned. The requirement to send more detailed formulary information to subsidy-eligible individuals who are reassigned was added by the Affordable Care Act.
Obligations of Plans Receiving Dual Eligibles and LIS by Reassignment and Plan Termination
Part D plans that are taking dual eligibles and LIS upon reassignment will be required to meet a number of requirements with respect to drug coverage for these individuals. They must:
- provide an automatic 30-day refill of any existing prescription without imposing utilization management such as prior authorization, step therapy or quantity limits; and
- provide a 90-day transition period for any current or new prescription before attempting to enforce any existing utilization management technique such as prior authorization or step therapy.
In addition, it is important to note that any dual eligible beneficiary that wishes to switch to a different Part D plan can do so, at no cost, at any time during 2012, so long as the plan is at or below the regional “benchmark” level.
Tips for Dual Eligible Beneficiaries Subject to Plan Reassignment
Any dual eligible or LIS recipient that received the blue reassignment letter from CMS needs to first read it carefully and contact their new prescription drug plan as soon as possible, every Part D plan is required to maintain an 800 customer assistance number. It is critical to:
- check to make sure that all prescribed medications are on the new plan’s formulary – all Medicare drug plans are required to have “all or substantially all” antipsychotics, antidepressants and anticonvulsants on their formularies (lists of covered drugs);
- inquire as to whether the new plan has any utilization management policies in place for any medications currently prescribed (prior authorization, step therapy, quantity limits);
- remind the new plan that they are required to refill any currently prescribed medication within the first 30 days of coverage after Jan. 1, 2011; and
- remind them that they cannot impose utilization management within the first 90 days of coverage.
It is also critical that all physicians prescribing to the dual eligible or LIS individual be notified before Jan. 1, 2011, of the plan switch. Likewise, the pharmacy that fills prescriptions for the dual eligible should be notified to see if they are part of the new plan’s network.
Finally, it is strongly recommended that refills of as many medications as possible be obtained in the final days and weeks of December 2011 to avoid problems at the pharmacy counter in the early days of January 2012 as enrollment in the new prescription drug plan is verified and new membership cards arrive in the mail.
Choosers (People That Have Selected Their Own Plan)
CMS refers dual eligibles and LIS recipients that chose their own plan initially, or who change out of the plan into which they are initially auto-enrolled, as "choosers." Generally speaking, CMS does not re-assign choosers when their benchmark plan loses its benchmark status. As noted above, it does re-assign those whose plan is terminating. Choosers receiving the full subsidy who are in a plan that is not benchmarked (either because it lost its benchmark status in a previous year or because it never was a benchmark plan) received a tan letter from CMS a few months ago, reminding them of the amount of premium they are currently paying and of their opportunity to join a benchmark plan in which they would pay no premium. The letter was supposed to include a list of benchmark plans in the recipient's region.
Redeterminations of Eligibility for Low-Income Subsidy (LIS) or “Extra Help”
The letters described above are sent only to those individuals who satisfy the criteria for re-assignment and who are either a dual eligible or eligible for LIS (Extra Help) for 2012. Some Extra Help recipients will be subject to redeterminations of their eligibility.
Individuals who qualify for LIS (Extra Help) because they receive SSI, Medicaid or a Medicare Savings Program (MSP) benefit and who then lose their eligibility for the underlying program should have received a gray letter from CMS and the Social Security Administration in September explaining that they have lost Extra Help because of the loss of the other benefit and inviting them to apply directly for Extra Help. Or, if after the loss of the underlying benefit, they re-qualify for it, CMS will be notifying them that they qualify for LIS (Extra Help) again.
Alternatively, those who qualify for LIS (Extra Help) through a Social Security Administration (SSA) application, rather than through another program, may be subject to a redetermination of their eligibility. Those so affected should have already received a letter from SSA in September and should return it promptly to ensure continued eligibility if, in fact, they continue to meet the criteria.
View all the letters from CMS at www.cms.gov/LimitedIncomeandResources/LISNoticesMailings/list.asp#TopOfPage.
Oct. 15, through Dec. 7, 2011, is a busy time for individuals with Medicare Part D and more so for those receiving Extra Help. Recipients should carefully read all letters received from their plans, from CMS and from SSA. Most importantly, recipients should:
- Respond to SSA's letter about eligibility for Extra Help,
- Review the newly assigned Part D plan to see if it covers all the beneficiary's drugs; and
- Compare formularies and utilization management requirements under the new plan with those of other benchmark plans in the region to see if other plans provide more comprehensive coverage.
Remember, every person who is reassigned has the right to change plans at any time.