October 11, 2007
Getting Ready for the Medicare Drug Benefit in 2007
CMS Announces Drug Plan Offerings the New Plan Year Beginning on January 1, 2007
The Centers for Medicare and Medicaid Services (CMS) this past week announced new prescription drug plan offerings for 2007, initiating an open season process that will continue until the new plan year begins on January 1.
For 2007, there will be as 50 to 60 drug plan choices in most states, on average 10 to 15 more than were available in 2006. In most states, average monthly premiums will be below what they were in 2006, with the average national premium falling to $24 per month – down substantially from the standard monthly premium of $37 that was set forth by Congress in 2003.
In addition to lower than predicted prices, some plans are planning to offer enhanced benefits in 2007, including elimination of cost sharing for generic medications.
Two national plans – United-AARP and Wellpoint – will be offering coverage of benzodiazepines (medications commonly prescribed for acute mania in bipolar disorder and anxiety disorders) that were excluded in 2006. This coverage is only being offered in so-called “enhanced” plans that require a supplemental premium, i.e. coverage beyond a basic drug plan.
Open Season Starts Officially on November 15
The process for selecting a Medicare prescription drug plan (PDP) mirrors the process that has existing for more than 25 years for the Federal Employees Health Benefits program – an “Open Season” in the fall during which participants select from a menu of plan options, with coverage going into effect on January 1.
As noted above, CMS has already posted available plan options available in each state. By next week, CMS will be posting all available information, including each plan’s formulary (list of covered drugs), cost sharing information and utilization management policies (prior authorization, step therapy and quantity limits applied to specific medications).
Beginning on November 15, and running through December 31, Medicare beneficiaries will be able to enroll in a plan for 2007. CMS is requiring every drug plan to have enrollment and coverage effective by January 1 for anyone who enrolls by December 8 – in other words, an enrollment decision by December 8 can guarantee seamless coverage available during the first week of January.
It is important to note that most beneficiaries who want to stay with the coverage they had for 2006 will not have to re-enroll for 2007 (there are some key exceptions for certain low-income dual eligible beneficiaries, see below). Others may want to change coverage as a result of changes in coverage policy, cost sharing or removal of a drug from a formulary for 2007.
How To Find the Medicare Drug Plans Available in Your State
CMS has already posted charts for plans available in each state with monthly premiums, deductibles, gaps in coverage and whether or not plans are available to dual eligibles and other low-income beneficiaries. Click here to view this chart.
Drug Plan Choices for Dual Eligibles
A key population for NAMI in the drug benefit remains the 6.2 million extremely low-income Medicare beneficiaries simultaneously eligible for Medicaid in their state. In most states, as many of 40% of these dual eligibles have a serious mental illness.
These dual eligible individuals will continue to participate in the Medicare drug benefit on a mandatory basis. So long as they stay with a plan that is “at or below benchmark,” they will get coverage with no monthly premium, no annual deductible and no gap in coverage (the so-called “doughnut hole” gap), with their only costs being $1 for a generic and $3 for a brand name prescription.
Because of the lower than projected premiums, in many states the cost of the average “benchmark” plan has gone down for 2007. As a result, some dual eligibles are in drug plans for 2006 that will not be “at or below the benchmark” for 2007, i.e. they cannot enroll for a $0 premium for 2007. For these dual eligibles, CMS is planning to automatically re-assign them to a new drug plan with the same sponsoring organization or with an identical formulary list in an attempt to avoid disruption.
“Re-Deeming” of Certain Dual Eligibles
There are some low-income Medicare beneficiaries who had dual eligible status in 2006, who will not in 2007. These are individuals that prior to 2006 qualified for Medicaid in their state as a result high medical expenses and “spend-down” eligibility. Most of these dual eligibles were automatically enrolled in a Part D plan for 2006.
For 2007 however, many will not have dual eligible status because they never reached the Medicaid “spend-down” level in 2006. These individuals will need to send in a new application for the Medicare Part D “Low Income Subsidy” (LIS) in order to access affordable drug coverage for 2007 (in most cases, coverage with no monthly premium, no deductible, no gap in coverage and as little as $3 for a generic, and $5 for a brand name prescription).
Notices from CMS to these “deemed” individuals were sent by mail late last month, with an LIS application and postage paid envelope. For more information, see:
Reaching Low-Income Individuals Eligible for “Extra Help”
Of extreme concern to NAMI since 2005 has been the large number of low-income Medicare beneficiaries who are ineligible for Medicaid, but yet are still very low-income and cannot afford drug coverage without a very deep subsidy to make coverage affordable, minimize cost sharing and avoid any gap in coverage (deductibles and the “doughnut hole”).
The Low-Income Subsidy (LIS) or “Extra Help” allows many of these beneficiaries with limited incomes (about $20,000 for couples and about $15,000 for individuals) to get drug coverage with little or no premium, no gap in benefits and minimal cost sharing.
Of the projected 7.5 million Medicare beneficiaries eligible for LIS, only about 2 million have applied and been approved. In order to improve on this, CMS and a range of non-profit partners have undertaken a major outreach and enrollment effort. NAMI is supporting these efforts – including an effort by the Access to Benefit Coalition (ABC).
NAMI affiliates are strongly encouraged to share these announcements and enrollment materials with their members and partner organizations to help reach low-income beneficiaries and get them all the assistance they are entitled to.
- Outreach kit for those eligible for Extra Help
- Extra Help resources from CMS
- Partnering with CMS Center
- "Benefits Check-Up" online tool
Lots of Web-Based Tools Available
In addition to the resources listed above, more web-based information about the Medicare prescription drug benefit is available through the following links: