What Nurses Need to Know about the New Medicare Drug Benefit That Begins in 2006: An Introduction
The Medicare prescription drug benefit that was enacted with the Medicare Modernization Act (MMA) in late 2003 will become effective in 2006. This article serves as an introduction to the benefit and how it will work for our patients, specifically those who currently get their drugs through Medicaid. Medicare beneficiaries our patients will have decisions to make in the coming months, and nurses will have to understand the benefit in order to educate their patients and to help ensure that all patients have no lapses in drug coverage in transitioning from their current coverage to the new drug benefit.
This benefit will be offered two ways: by private prescription drug plans (PDPs) that have been approved to participate in Medicare, and through Medicare managed care plans, known as Medicare Advantage plans (MA-PDs). Both types of plans will offer standard coverage set by the law, but for additional premiums they can offer a more expanded benefit. The premiums, formularies, and network of participating pharmacies will vary among the plans, and beneficiaries should have choices among plans in all areas of the country.
For most Medicare beneficiaries, this drug benefit (technically known as Part D of Medicare) is optional. However, for those who are eligible for both Medicare and Medicaid (the "dual eligibles") and who currently get their drugs through the Medicaid program, it is NOT OPTIONAL. These beneficiaries will be auto-enrolled in a Medicare PDP.
The new drug benefit, like Parts A and B of Medicare, does involve some beneficiary cost-sharing, or "out of pocket" expenses. There are annual premiums, and deductibles and co-payments. In addition, there is a period of time, called the "coverage gap," after $2,250 of total drug spending in a year, where the beneficiary pays 100% of their drug costs until a catastrophic limit ($5,100 in 2006) is reached. After that, Medicare pays approximately 95% of the patient's drug needs. We will elaborate on that in a future article.
For the dual eligible (i.e., Medicare and Medicaid) patients, and certain other low-income Medicare beneficiaries, there will be subsidies to help them with this cost-sharing. The full dual eligibles, who are currently receiving their drugs through Medicaid, will have no premiums, deductibles, and no coverage gap, but they will have co-payments of $1-$3 per prescription, not unlike many Medicaid programs today. These individuals will not have to apply for these subsidies. Other low-income individuals, between 100%-135% of the federal poverty level (FPL), also will have no premiums, deductibles, and no coverage gap, but they will have co-payments of $1-$5. For individuals between 135%-150% of the FPL, there will be a sliding scale premium, a $50 deductible, cost sharing of up to 15% through the coverage gap, and $2-$5 co-payments once they reach the catastrophic limit. Some of these individuals may need to apply for the subsidies.
Awareness Phase. May and June 2005 was the "Awareness Phase" of the drug benefit. Letters were sent to all dual eligible beneficiaries informing them about the transition to the new drug benefit in January 2006; that they automatically qualify for the subsidy; and that they will be notified in October about the drug plans in their areas. Other Medicare beneficiaries will receive a letter informing them that they may be eligible for subsidies and encouraging them to apply in the fall when that process begins. It would be good to start talking to patients about these letters and encouraging them to bring the letters to their facility. The letters may provide information about which category the State believes the patient is in.
Enrollment Phase. October through December 2005 is the Enrollment Phase of the drug benefit. By mid-October, the Centers for Medicare and Medicaid Services (CMS) will assign full-benefit dual eligibles to a PDP and notify the patients, the PDP, and the States of this decision. PDPs will begin to communicate with their assigned beneficiaries. Enrollment begins on November 15; if a dual eligible patient wants to opt-out of their assigned plan and choose another, they can do so starting on this date. We expect to have information on the various PDP formularies by mid-October to help patients decide which plan is best for them, based on access to needed drugs and participating pharmacies. By December 31, the dual eligibles must opt out of their assigned plan or they will be auto-enrolled in it. Medicaid drug coverage ends for full-benefit dual eligibles on December 31. Full benefit dual eligibles can change plans at any time. Patients who have Medicaid only, and are not Medicare beneficiaries, will continue to get their drugs through the Medicaid program.
As a safeguard through this transition, States will pay for extra refills of drugs at the end of the year for the dual eligibles. Nurses are likely going to be an important part of this effort for their patients who get their drugs through Medicaid and who will therefore be transitioning to the new drug benefit at the beginning of the new year.
There is more for nurses to learn in order to help patients navigate this new benefit and to make the decisions they will need to make in the coming months. Future issues of the ANNA Update will provide additional information. Some excellent online resources also are available, including
- Fact sheet for beneficiaries available at: http://www.medicare.gov/Publications/Pubs/pdf/11065.pdf
- Decision tree for beneficiaries available at: http://www.cms.hhs.gov/partnerships/news/mma/RxDrugCoverageFinal.pdf
ANNA State Health Policy Consultant