Got Medicare? What People Living With HIV Need to Know About the New Medicare Drug Benefit -- "Part D" -- Starting January 1, 2006
About one in five people in HIV care has Medicare coverage and most of those also get Medicaid benefits. For everyone eligible for Medicare, a complicated new program called Part D will help pay for medicines starting January 1, 2006. For Medicare recipients not on Medicaid, the program is optional, but if they choose to enroll after May 15, there will be a penalty of higher premiums. Everyone who gets both Medicaid and Medicare benefits ("dual eligibles") will automatically be enrolled in Part D.
Choosing a Plan
Because the lawmakers who passed it favor free-market capitalism over simplicity, there will be "50 to 100 different plans, all advertising" to consumers, says Tom McCormack, a public benefits policy consultant at Title II Community AIDS National Network (TIICANN). Beneficiaries can select the plan they expect will work best for them. Beginning in late October, extensive information about each plan's formulary, which pharmacies they will cooperate with, and what monthly premiums and co-pays they will charge will appear on www.medicare.gov
. Those who do not have access to the Internet can call 1-800-MEDICARE (1-800-633-4227). TTY users can call 1-877-486-2048.
If you are on Medicare and your medications are currently paid for by Medicaid, they will no longer be paid for by Medicaid starting January 1, 2006. Dual eligibles will have a plan randomly chosen for them to make sure that they have Part D in place on time and their treatment is not interrupted. Advocates had worried that many dual eligibles would be too incapacitated by their illness to deal with the paperwork to choose their own plan. Still, those who are able to and want to can make their own choice. In October, a notice should be mailed explaining the plan chosen for you (if you are on both Medicare and Medicaid), and how you can choose another plan if you prefer. You can join a Medicare Part D drug plan starting November 15, 2005.
None of the Part D plans may reject a patient for having an "expensive-to-treat" condition like HIV. And all antiretrovirals must be covered by every plan. However, for most classes of other medications, a plan only has to cover a minimum of two drugs for each condition. For example, there are more than two drugs commonly used to treat PCP pneumonia, but under some of these plans, doctors may need to choose between two that are covered by their patient's Part D plan.
McCormack says it looks like there won't be problems getting newer drugs. "The plans don't appear to be chintzy," he says. But if a drug you need isn't on your plan's formulary, there is a "clunky, hard-to-use appeals process" to get the plan to cover it.
Low Costs for Low-Income Beneficiaries
Part D doesn't pay for medications outright; it requires even the poorest patients to "share" the expenses. Dual eligibles, and those who are eligible for a Medicare Savings Program or get Supplement Security Income (SSI) benefits, automatically qualify for "extra help" to reduce their out-of-pocket costs. For those with an income below the poverty line (currently $798 per month for a single person, in September 2005), there will be no premiums or deductibles, but there will be a co-pay of $1 for generic meds and $3 for brand-name meds, with no co-pay after total drug expenses reach a certain limit. Dual eligibles with incomes between the poverty line and 135% of the poverty line (currently $1,077 per month for a single person) will have a $2 co-pay for generics and a $5 co-pay for brand-name drugs. Those with incomes between 135% and 150% of the poverty line (currently $1,197 per month for a single person) will pay 15% of drug costs until their out-of-pocket spending reaches $808 -- and then their co-pay will be $2 for generics and $5 for brand names.
People who do not automatically qualify for "extra help" can apply for it if their incomes are below 150% of the poverty line. People in this category need to first join Part D, then complete an application form for the Low-Income Subsidy (LIS, or "extra help") and meet eligibility criteria that will look at their assets and income. Their premiums, deductibles and co-pays will depend on their income. They will not experience the gap in coverage that those without "extra help" will.
Costs Without "Extra Help"
Part D beneficiaries without "extra help" will have to pay premiums of about $20 to $37 per month. They will also pay the first $250 of their drug costs (the "deductible"); 25% of their drug costs between $250 and $2,250; and all of their drug costs between $2,250 and $5,100 in one year. After drug costs reach $5,100 in a given year, these are considered "catastrophic expenses," and patients will only have to pay 5% of further drug costs. The period of time when Part D doesn't cover any drug costs is called the "donut hole." During the months a patient is in the "donut hole," she may have to pay many times the amount of money she'll be paying during other months.
People taking antiretrovirals for HIV may end up spending $3,600 out of pocket each year (if their incomes are above 150% of the poverty line and therefore they don't qualify for "extra help"). However, there are other sources of funding that can count toward True-Out-Of-Pocket expenses (TrOOP). If a patient gets outside help to pay for medications while she's in the donut hole, that financial help may count as an out-of-pocket expense, and once total drug costs reach the "catastrophic" level, Part D will pay for 95% of further costs. Fully state-funded State Pharmaceutical Assistance Programs (SPAP), qualified drug-company patient assistance programs, family help and donations from private organizations (including charities) count as TrOOP, but any help from AIDS Drug Assistance Programs (ADAP) does not [as of October 2005 -- there are efforts to change this].
"We lobbied to keep co-pays low for poor people," McCormack says of advocates for people with HIV. "But the senators were mentally in the world of country clubs they don't know anyone making $6 an hour at Walmart." There is a pressing need for the HIV community to demand some changes to Part D, he says. "When I was a case manager, I talked to homeless people with 15 prescriptions. With a $5 co-pay for each medication, the overwhelming majority didn't get their prescriptions filled. Co-pays can literally be killers." Currently, he says, advocates are pushing for a maximum monthly ceiling, so that poor people will not have to pay more than $25 in co-pays per month.
Advocates also want to reform the law so that ADAP can be counted toward TrOOP. As it stands, patients can get help from ADAP, but that may mean that they stay in the "donut hole" all year. States can be pressured to maintain ADAP coverage for those on Part D, and even to help fill some of the gaps; for example, including coverage for Part D premiums and deductibles. Also, many State Pharmaceutical Assistance Programs only cover the elderly and not the disabled and many states don't have SPAPs at all.
McCormack's biggest concern is that "there's going to be a major train wreck" when millions of people are shifted to Part D overnight, leaving no margin for error and their Medicaid card doesn't work at their drugstore anymore. "Millions will say, 'What is Part D?' or 'I got a letter in the mail, but I couldn't understand it so I threw it out' or 'I called the 800 number and it was busy.' Or 'My Part D plan doesn't participate with this drugstore, and the nearest drugstore that does participate with my plan is 20 miles away, and I don't have a car.'"
Patients can contact their Senators and members of Congress -- especially Republican ones, since Democratic ones are generally on board, McCormack says. "Urge them to amend Part D to
- Allow, grant federal funding for, and maybe even require state Medicaid programs to keep covering drugs for a long transition period to prevent episodes of non-coverage that are now sure to occur in early 2006;
- Make Part D less complicated -- for example, by having only one, simple, comprehensive, directly Medicare-run drug plan that covers all FDA-licensed, investigational new and newly approved drugs, without clunky prior authorization or "whether-it's-covered" appeal red tape and hassles;
- Bridge the donut hole (maybe by letting plans charge slightly higher premiums to do it) for those "richer" than 150% of poverty -- or at least let ADAP-paid prescriptions count toward donut-hole TrOOP; and
- Add a monthly -- not yearly -- co-pay dollar-amount cap, at least for lower-income Extra Help Part D patients under 150% of poverty to prevent co-pays for those with many genuine prescription needs from eating up their low incomes."
If you need individual help, call 1-800-MEDICARE (1-800-633-4227). TTY users can call 1-877-486-2048.
ISSN # 1052-4207
Copyright 2005 by John S. James. Permission granted for noncommercial reproduction, provided that our address and phone number are included if more than short quotations are used.