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Medicare Part D Prescription Drug Program
MC no longer cover prescription drugs for individuals who are dually eligible (have both MC and Medicare) including SSI/SSP individuals and those who are in a MSP such as QMB, SLMB, and QI-1. Instead, the new Medicare Part D Prescription Drug Program will replace most MC prescription drug coverage to all persons who are eligible for Medicare Part A and/or Part B. Anyone who is eligible for Part A and/or Part B is eligible for Part D.
Part D Enrollment
Enrollment into Medicare Part D is mandatory for the following populations:
- Dually eligible individuals
- MSP-only individuals, and
- SSI/SSP individuals.
To facilitate this requirement, the Department of Health Services (DHCS) will automatically enroll all individuals listed above into a Prescription Drug Plan (PDP). Individuals can also enroll themselves directly into the PDP of their choice.
Prescription Drug Plan (PDP)
Medicare beneficiaries who choose not to enroll when they first become eligible may have to pay a higher premium if they later decide to enroll in a plan. They will also need to wait until the annual general enrollment period (October 15 through December 7 of each year) to sign up for a plan. Each plan has its own distinct list of covered drugs called a formulary. For this reason, it is important that Medicare beneficiaries select their PDP to ensure that their current prescriptions are covered. Each plan can design their benefit package and has the flexibility to offer supplemental benefits for a higher premium.
Full-scope dual eligible and MSP individuals who do not select a plan will be automatically enrolled into a Prescription Drug Plan (PDP).
- Individuals with Medicare HMOs (e.g. Kaiser Senior Advantage, Secure Horizons, Health Net, etc.) will receive their prescription coverage through their respective plans.
- Individuals with traditional fee-for-service Medicare will be randomly assigned to a Prescription Drug Plan (PDP) if a plan is not selected.
The PDP will notify them by mail once they are enrolled. Dual eligibles and MSPs may change plans at any time after the auto-enrollment if they are dissatisfied with the plan assigned to them.
Enrollment in a Plan
Self-enrollment is encouraged to ensure that selected PDP covers their current prescription drugs. Medicare beneficiaries (or their authorized representatives) can enroll themselves directly in a plan. Plans are required to process applications in a timely manner and the plan must notify the applicant of the acceptance or denial of the enrollment request.
Medicare Recipients with Other Health Coverage (OHC)
Individuals who have OHC (through employers, retirement plans or unions) that covers prescription drugs can decide whether to continue their existing drug coverage or enroll in a Medicare PDP. Covered individuals can also contact their OHC carriers to get the needed drug comparison. As long as the current OHC plan is at least as good as what is offered by Medicare PDP, he or she will not be subject to the penalty of a higher premium if s/he decides to join the Medicare PDP later. Otherwise, they need to enroll in a Medicare PDP when first eligible to avoid paying a higher premium later on (after the initial enrollment period).
Medicare Recipients who Have Medigap Policies
Medigap policies cover some of the costs that are not covered by Medicare. In most states (except for Minnesota, Massachusetts and Wisconsin), the standardized policies are called Medigap Plans A through J. Some of these Medigap Plans (Plan H, I and J) have drug benefits.
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If the Medigap Plan... |
Then... |
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Does not provide drug benefits, |
The Medicare drug coverage will not change. |
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Provides drug benefits, |
The Medicare recipient can either keep the current Medigap drug benefit or enroll in a Medicare PDP to get drug coverage. He or she can keep the Medigap supplemental coverage. |
Costs
The new Part D has a premium of around $37, annual deductible of $250 and copays/coinsurances. The costs will vary depending on which drug plan they choose and some plans may offer more coverage and additional drugs for a higher monthly premium. Unlike Part A or B, there is no buy-in program for Part D premium. The client must be allowed an income deduction if he/she is paying out-of-pocket Part D premium, deductibles, copays/coinsurances.
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Costs/Descriptions |
Beneficiaries’ Out of Pocket Expenses |
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Monthly Premium |
Averages $37/mo. |
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Annual Deductible |
up to $250 |
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If the initial prescription cost is ($250-$2,250) |
25% of the cost up to $500 |
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If the prescription cost is ($2,250-$5,100) |
100% coinsurance not to exceed $2,850 |
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If the prescription cost is greater than $5,100 |
Greater of 5%, OR $2 after $3,600 spent above |
Low Income Subsidy (LIS) Assistance
The LIS provides assistance for the costs of premiums, deductibles and copays. Persons with limited income below 150% FPL and who meet the LIS resource limit designated by Medicare can get help in paying these costs by applying for the LIS assistance.
Dually eligible full -scope MC eligibles (have both Medicare and MC including those on SSI/SSP) and those who are MSP eligibles do not need to apply for the subsidy as they automatically qualify and will be approved for LIS assistance. Once approved for LIS, they do not have to pay premiums or deductibles and will have low copays between $1-$5 for prescriptions up to $5,100. There is no copay for prescriptions over $5,100. For institutionalized (in LTC) individuals, there is no copay at all.
Individuals who do not automatically qualify for LIS must apply.
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Benefit |
Income At or Below 100% FPL |
Income over 100% FPL |
Income Below 135% FPL and with Limited Resources |
Income Over 135% FPL with Higher Resources |
Income Below 150% FPL with Higher Resources |
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Monthly Premium |
$0 |
$0 |
$0 |
$0 |
Sliding Scale |
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Annual Deductible |
$0 |
$0 |
$0 |
$50 |
$50 |
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Initial Prescription Benefit ($0-$5,100) |
$1/$3 copays |
$2/$5 copays |
$2/$5 copays |
Maximum 15% coinsurance |
Maximum 15% coinsurance |
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Institutionalized/LTC (excluding waiver programs) individuals pay $0. |
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100% Coinsurance |
N/A |
N/A |
N/A |
N/A |
N/A |
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Catastrophic Benefit Period (prescriptions greater than $5,100) |
$0 |
$0 |
$0 |
$2/$5 |
$2/$5 |
LIS and MC Share-of-Cost (SOC) Calculation
Dually eligible recipients with a SOC are eligible for LIS beginning in the first month they meet their SOC. Once approved, LIS eligibility continues through the end of the calendar year. It is not contingent on maintaining eligibility and is not subject to change if there are changes in their income or asset levels.
Information/Referral Resources
To ensure that clients are referred to the appropriate agency, the following chart is provided:
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NAME |
Area of Expertise |
Phone Number/ Website |
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Center for Medicaid Services (CMS) |
Part D enrollment/questions |
(800) MEDICARE |
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Social Security Administration |
LIS Applications |
(800) 772-1213 or local Social Security office www.ssa.gov |
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Health Insurance and Client Advocacy Program (HICAP) |
Help/guidance on PDP selection |
(800) 434-0222 |
Implementation
Intake offices must ensure availability of pre-assembled packets in their respective lobbies to be handed out or sent by mail to those who want an LIS application. Each packet must include the following:
- LIS Cover Page
- A MC mail-in application
- QMB/SLMB/QI-1 application, and
- LIS application.
All Offices
If an individual completes and provides an LIS application (in person or by mail) regardless whether or not the individual submits a MC or MSP application, all completed LIS applications must be forwarded to SSA by batch using the self-addressed envelope included with each LIS application. Each District Office must determine a process for designating a basket for batch purposes. A photocopy of an LIS application is not acceptable. Only original LIS application form must be used. If an individual insists upon an LIS eligibility determination by the State or refuses to have his/her LIS application forwarded to SSA, it must be forwarded in batch to:
DHCS/MEB
Attn. MMA Analyst
1501 Capitol Avenue, MS 4607 Post Office Box 997417
Sacramento, CA 95899-7417
Santa Clara Family Health Plan (SCFHP) Medicare Plan
SCFHP offers a Medicare Advantage plan called Healthy Generations (HG). It is for people who:
- Live in Santa Clara County,
- Are dually eligibles (have both MC and Medicare Part A and Part B).
For additional information, clients can call 1-888-355-5557. For hearing or speech impaired: TTY 1-800-735-2929.
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