The Medicare Modernization Act provided additional assistance to persons of limited means—those currently covered by Medicare and Medicaid plans who receive their medications through Medicaid (the dual-eligibles) and those who have limited income and resources but are only covered by Medicare. The former group will automatically be enrolled into PDPs if they do not sign up on their own, and they will pay reduced fees for their medications. The states, in turn, will reimburse the federal government for the drug cost savings gained by their Medicaid programs.
Other low-income individuals may also be eligible for drug benefit subsidies based on their income and assets (TABLE). Clearly, the Medicare Modernization Act offers significant drug benefits to beneficiaries of limited means. The Centers for Medicare and Medicaid Services (CMS) projects that 10.9 million beneficiaries will receive low-income subsidies out of 14.5 million eligible.
TABLE
Medicare prescription drug benefit subsidies for low-income beneficiaries, 2006
| LOW-INCOME SUBSIDY LEVEL | PREMIUM | MONTHLY DEDUCTIBLE | ANNUAL COPAYMENTS |
|---|---|---|---|
| Full-benefit dual eligibles Income <100% of poverty ($9750 individual; $12,830/couple) | $0 | $0 | $1/generic, $3/brand-name; no copays after total drug spending reaches $5100 |
| Full-benefit dual eligibles Income ≥100% of poverty | $0 | $0 | $2/generic, $5/brand-name; no copays after total drug spending reaches $5100 |
| Institutionalized full-benefit dual eligibles | $0 | $0 | No copays |
| Individuals with income <135% of poverty ($12,920 individuals, $17,321/couple) and assets <$6000/individual; $9000/couple | $0 | $0 | $2/generic, $5/brand-name; no copays after total drug spending reaches $5100 |
| Individuals with income 135%–150% of poverty ($12,920–$14,355 individuals, $17,321–$19,245/couple) and assets <$10,000/individual, $20,000/couple | Sliding scale up to $32.20* | $50 | 15% of total costs up to $5100; $2/generic, $5/brand-name thereafter |
| Note: Poverty-level dollar amounts are for 2005. Additional assests of up to $1500/individual and $3000/couple for funeral or burial expenses are permitted. *$32.20 is the national monthly Part D base beneficiary premium for 2006. | |||
| Source: Kaiser Family Foundation summary of Medicare prescription drug benefit low-income subsidies in 2006. | |||
Medigap and employer-sponsored plans
Many current beneficiaries have Medigap insurance policies, which cover part or all of the financial holes in the traditional Medicare plan—eg, deductibles, copays, and other benefits such as drug coverage. Beginning in January 2006, new policies that include drug coverage can no longer be issued. Policyholders can keep their current Medigap policies that cover medications; however, these are generally not considered equivalent to the new coverage. In addition, Medicare will provide subsidies to employers to encourage them to continue any current retiree plans that provide drug coverage comparable to the new plans.4
Enrollment
While the new drug plans start on January 1, 2006, the initial enrollment period runs until May 15, 2006. Beneficiaries who enroll after that time and do not currently have drug coverage as good as the new Medicare drug benefit will pay a higher premium equal to 1% of the average monthly premium for each month they delay enrollment. Those who enroll may change plans one time between December 31, 2005 and May 15, 2006. After May 15, the next enrollment period will be from November 15 to December 31, 2006. Any enrollee can change plans during that time.
In order to assist beneficiaries in making a decision about whether to enroll in a Medicare drug plan and which to choose, the federal government, assisted by a number of medical organizations (such as the AAFP) and nonprofits like the local Area Agencies on Aging, is providing seniors with information in a variety of formats. Beneficiaries should all have received a booklet, “Medicare and You,” in October 2005. There is a 24-hour telephone help line, 1-800-MEDICARE, that has automated answers and can provide access to a real person.
Finally, there is the Internet: www.medicare.gov. While 3 of 4 seniors have never been online, this is the best method to locate available plans in your area, find out which specific medications are included in each plan, and try to compare costs.5 For many seniors, it will be worth asking family members, friends, or community agencies for help in navigating the web site and the information it contains.
CORRESPONDENCE
Eric A. Henley, MD, MPH, Department of Family and Community Medicine, University of Illinois College of Medicine at Rockford, 1601 Parkview Avenue, Rockford, IL 61107-1897. E-mail: ehenley@uic.edu