Medicare Prescription Drug, Improvement, and Modernization Act of 2003 Roy Trudel, CMSO National Eligibility Workers Association 07/12/05

MMA Medicare Modernization Act PL Most sweeping reform since program inception Incredibly short timeframes to implementation New partnerships between Medicare and Medicaid, SSA and States New ground for Medicare – “means testing!”

MMA Title I Medicare Prescription Drug Benefit Medicare-Approved Drug Discount Card

MMA We will cover…. A (very brief) mention of the drug card A Part D Overview A look at the Low Income Subsidy State roles and responsibilities

Medicare Approved Drug Discount Card Help for many people with Medicare REAL discounts on prescription drugs Voluntary Program Bridge to Part D Prescription Drug benefit

Medicare Approved Drug Discount Card  Enrollment began on May 3, 2004  Discounts began June 1, 2004  Program sunsets on December 31, 2005 (or whenever Part D kicks in…)

So much for the drug card..... on to Part D!

Part D Medicare Prescription Drug Plans  Effective: January 1, 2006  Called “Medicare Prescription Drug Plans” – MPDPs (v. Part D)  Eligibility? Must be entitled to Part A or enrolled in Part B (Have Medicare Card)

Part D Medicare Prescription Drug Plans  Enrollment for Part D Voluntary Medicare beneficiaries who opt for Part D must actively choose a plan

Part D Medicare Prescription Drug Plans If enrolled in fee-for-service Medicare Receive Part D benefits through a Prescription Drug Plan (PDP) If enrolled in Medicare Advantage (MA) Plan Receive Part D benefits through Medicare Advantage Prescription Drug Plan (MA-PD)

Standard Medicare Drug Benefit Benefit (Rx costs) Beneficiary TrOOP Monthly Premium Averages $37/month Annual Deductible ($0-$250)$250 Initial Rx Benefit ($250-$2,250) $500 (25% coinsurance) 100% Coinsurance ($2,250-$5,100)$2,850 Catastrophic Benefit Period (>$5100) Greater of 5% or $2 after $3,600 spent above

Dual Eligibles Medicare Beneficiaries Who receive some or all Medicaid Benefits

Full Benefit Dual Eligibles Medicare beneficiaries With full (comprehensive) Medicaid benefits

Full Benefit Dual Eligibles Coverage Under Part D  As of January 1, 2006, there will be no Medicaid match available for prescription drugs States provide to full benefit duals  other than “excludable drugs”(weight loss and certain psych drugs) not covered by Medicare Full Medicaid Benefits

Full Benefit Dual Eligibles Coverage under Part D  Critical for States and CMS to help full benefit dual eligibles (FBDE) transition to Part D plan  Good transition to talk about the Low Income Subsidy…..

Low Income Subsidy Assistance Low-income Medicare beneficiaries Extra assistance with premium and cost sharing under the new drug benefit.

Low Income Subsidy (LIS) Assistance Federal Help in Paying Deductibles Premiums Co-payments Coinsurance Note – these are forms of “cost sharing”

Low Income Subsidy Assistance Certain groups (deemed) are automatically eligible for a subsidy. Low income subsidy “applicants” (undeemed) will have to “apply” and meet an income and asset test. Eligibility determinations? SSA or the State Medicaid Agency

Low Income Subsidy - Process Important! For LIS Beneficiaries, it’s a 2-step process! 1. “Apply” for LIS 2. “Enroll” in MPDP

Low Income Subsidy Eligibles – Who are those guys? MechanismSubsidy GroupSubsidy Category Deemed by law FBDEs at or below 100% FPL Full subsidy eligible – lowest co pays ($1/$3) FBDEs above 100% FPL Full subsidy eligible – nominal co pays ($2/$5) SSI recipients Deemed by regulation Medicare Savings Program Groups (QMB, SLMB, QI) Must Apply (Undeemed) “Applicants” Other non-dual, low- income beneficiaries May qualify for 1 of 3 groups: 2nd FSE group above, or 2 other “not- full subsidy” groups

Low Income Subsidy for FBDEs Benefit TrOOP for 100% FPLover 100% FPL Monthly Premium$0 Annual Deductible$0 Initial Rx Benefit ($0-$5,100) $1/$3 co pays$2/$5 co pays Institutionalized pay $0 100% CoinsuranceN/A Catastrophic Benefit Period >$5100 $0

FBDEs are Treated Specially Certain duals get lower cost-sharing. < 100% FPL  lower co-pays $1 to $3 institutionalized  no cost sharing FBDEs auto-assigned to a plan with opportunity to change plans.

LIS for non-FBDEs Benefit TrOOP for non-FBDEs Below 135% FPL & limited resources Below 135% FPL & higher resources Below 150% FPL & higher resources Mon. Premium$0 Sliding Scale Annual.Deduct$0$50 Initial Rx Benefit $2/$5 co pays Max 15% coinsur. 100% Coinsur.N/A Catastrophic Period >$5100 $0$2/$5

What is the process for deeming? States SSA Identify FBDEs, MSPs Some overlap Identify SSI/Medicare recipients with no Medicaid Notices sent, “You are eligible!”

Low-Income Subsidy SSA & State Roles  Both States and SSA are required to make low income subsidy eligibility determinations.  Both States and SSA are also required to conduct redeterminations and appeals of denials of eligibility.  Given similar roles, coordination will be necessary.

Countable Income Compare to Income Standard Based on FPL for size of the family Use SSI rules When applying for LIS, how is income considered?

Countable Resources Compare to Resource Standard 2 types of standard: Full Subsidy = < 3 x SSI limit ($6k individual, $9k couple) Other Low-income Subsidy = Alternate standard (<$10k individual, < $20k couple) When applying for LIS, how are resources counted?

Phased Down State Contributions States make monthly payments to Medicare for a portion of the drug expenditures for dual eligibles (state contribution). The contribution will based on a state’s own per capita spending for dual eligibles By no later than October 15, 2005 and October 15 of each succeeding year, the Secretary will notify the states of their per capita amount Questions to:

Rulemaking Process Final CMS Rule was published January 28, 2005 Addressed 8,000 comments received on NPRM SSA’s Proposed Rule on the LIS process published March 4; no Final Rule as of yet.

Wrap-up Part D: State Issues Low-Income Subsidy Process Coordination Between CMS, SSA & States Educating beneficiaries Data for Part D phased-down state contributions Coordination of benefits

Thanks for listening! Questions?