Medicare Part D – Think “D” for Disaster

The Advocate’s Guide for Organizing

To Improve Medicare Drug Coverage

David Grant and Marie JoblingPresenters

CARA 415-550-0828

California Alliance for Retired Americans (CARA) 877-223-6107 in partnership with the Medicare Advocacy Collaborative: - Health Access California - OWL - California - Gray Panthers - California - Congress of California Seniors

This workshop made possible in part by a grant from The California Wellness Foundation.

This Workshop brought to you by…

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Medicare Part D - Time to “Shout Out” an Alarm

• Everywhere folks are talking about Part D

• Mostly, individuals are trying to figure out if it will help or hurt them

• We need to raise the “red warning flag” about dangers as they unfold.

• We need to “Shout Out” that Medicare Part D has too many problems and must to be “Reconsidered and Replaced” by Congress

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Overview of Today’s Workshop• Medicare Part D – The Basics• Medicare Part D – An Advocate’s Perspective

- Does Medicare Part D reduce cost & improve access?

OR

- Does it simply privatize a major part of Medicare by turning over drug coverage to an unregulated army of private drug providers (while sacrificing the standard benefits fundamental to Medicare?)

• CARA’s Call to Action!

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Here is a CLUE…

In 2003, when Medicare Part D was enacted, the Drug Companies…

• hired 952 lobbyists, • spent $141 million on lobbying • contributed more than $30 million to campaigns.

Drug profits rose $182 billion.

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Medicare Part D – Working for YOU?

What has been your

experience so far?

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Welcome to Medicare Part D “The Basics”

• Coverage began January 1, 2006 for those enrolled

• Available for all people with Medicare, but impacts particular groups differently

• Drug Benefits provided through Private Plans:– Prescription Drug Plans (PDP’s)– Medicare Advantage Plans (HMO’s)

• Some Employer and Union Retiree Plans receive government subsidies to help prevent them from dropping drug coverage.

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How it Works – The Basics

• Monthly premium: minimum of $5.31 to $66.00 per month (in California)

• Deductible - $250 per year• Co-payment - $500 maximum based on drug “costs”

up to $2,250• Donut Hole – No coverage for costs from $2,250 to

$5,100 (but you must keep paying monthly premiums)• Catastrophic Coverage – After $5,100, it covers 95%

of drug costs• Co-pays – generally $2 - $5 for each prescription

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Part D Plans – The Basics

• Plan Choice – 47 “stand alone” plans in addition to current HMO plans

• Co-payments, deductibles, pharmacy networks vary greatly

• All mental health drugs, immunosuppressants, AIDS and cancer drugs are covered

• In other categories, all drugs are not covered• Medi-Cal will continue to cover drugs not on Part D

formulary for Medi-Cal recipients• Part D Plans can change formulary at any time• Customer service – up to each plan• Appeals - up to each plan

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Low Income Subsidy – The Basics

• Three groups “deemed” eligible for full low-income subsidy were automatically enrolled January 1, 2006.– Dual eligible (Medicare/Medi-Cal)– People with SSI– People enrolled in Medicare Savings Programs (QMB, SLMB & QI-

1)

• Those with incomes OVER this level and UNDER 150% of poverty level are eligible but must apply through Social Security for this benefit. – Single – up to $1197 monthly

– Couple – up to $1,604 monthly– Excess assets may prevent you from getting this benefit.

First, you must apply for the subsidy, then you must enroll in a Part D Plan.

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Enrollment Issues – The Basics• Dual Eligibles (with both Medicare and Medi-Cal):

– Were automatically enrolled in a Part D plan January 1, 2006 – Beneficiaries must determine if chosen plan covers their drugs and

is accepted at a nearby pharmacy– Drugs on the Medi-Cal formulary, but not on the Part D formulary,

will continue to be paid for by Medi-Cal– If you don’t like your plan, you can change as often as monthly

• Medicare Only:– Can apply for Low-Income Subsidy– Are being encouraged to pick a Part D plan and enroll by May 15,

2006 – You can only change plans during the annual open enrollment

period, November 15 through December 31. – Beneficiaries pay a 1% of premium penalty each month if you do

not enroll by May 15, 2006

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Dual Eligibles

• Dual eligibles in long term care facilitiesNo premium, no deductible, no co-pays

• Dual eligibles in the community and those in Medicare/Medi-Cal Medicare Savings Programs (QMB, SLMB, QI-1) or SSI/SSDI– No premium or deductible– Co-pays: $1 to $5 (per prescription) – No “donut hole” of non-coverage – No co-pay after $5,100 limit of total cost of

drugs

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What did the Governor just do?

• Authorized the State to pay for medications for those Medi-Medi’s who are unable to get their drugs paid for by Medicare.

• This coverage was only for the period January 12 through January 17, 2006.

• Sponsors of this workshop are part of efforts with the Legislature to get this safety net coverage continued.

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Low-income Medicare Beneficiaries Not on Medi-Cal

• A two–step process• Apply for a “low-income subsidy” if income

and assets are low– Single – up to $1,197 monthly– Couple – up to $1,604 monthly– Assets limits vary

• Choose a prescription drug plan before May 15, 2006 and enroll – your subsidy should be automatically applied.

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Medicare Beneficiaries with Existing Drug Coverage

• Watch out for a letter saying if your current coverage is at least as good as Medicare Part D – the term used is “creditable” – not all plans are “creditable”.

• These letters could come from:– Existing Medi-gap policies– Medicare Advantage HMO’s– VA and TRICARE– Union and Corporate Retiree Benefit Programs– CALPERS

• Covered individuals can still sign up for a Part D plan, but may lose their regular drug AND health coverage(More on this in the “red flag” section to follow).

• If you have not yet received a letter, or are confused, call your health plan.

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Where You Can Go For Help

• Health Insurance Counseling and Advocacy Program (HICAP): Call 1-800-434-0222 to reach your local HICAP or go to www.calmedicare.org.

• Social Security: 1-800-772-1213 or go to www.ssa.gov.

• Center for Medicare and Medicaid Services (CMS): Call 1-800-MEDICARE or go to www.medicare.gov.

• Your CARA Part D Toolkit and at www.retiredamericans.org

• Remember, most other sources of information are trying to sell you something

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Preparing Advocates to “Raise the Red Flag”

• Presentations like what you just saw are happening all over the state.

• We need to tell the other side of the story - that

Medicare Part D = Disaster • We need to be “on guard” against the numerous

dangerous features of Medicare Part D• Let’s count the ways that Part D is a Disaster…

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#1 Enrollment = Chaos and Confusion

• Enrollment is being pushed too quickly• Enrollment decisions are too complex• Too few resources are available to help

consumers • Too little information is available in multiple

languages and in formats easy for consumers to understand.

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#2 Medi-Cal Enrollment Nightmare

• On January 1, over 1 million Medi-Cal beneficiaries were automatically switched to Medicare Part D. Horror stories include:– Pharmacies can’t access computer system to process

claims. When they do, data is not accurate. – Phone lines for Medicare and the private plans totally

overwhelmed– High co-payments and totally different formularies

mean beneficiaries leave without lifesaving drugs. – California and other states must step in to bail out the

program.

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#3 - Late Enrollment Penalty

It Lasts A Lifetime!• Beneficiaries not automatically enrolled have until May

15, 2006 to chose a plan.• After May 15, 2006, if you have not chosen a plan, you

will pay 1% of the average area premium PER MONTH…FOR LIFE as your penalty!

• Example – say the average monthly premium in your area is $50 a month. If you wait 12 months to sign up, your premium would be $50 + $6 (12% of $50) every month or an additional $72 per year forever! If the rate goes up, your penalty goes up proportionately. If you wait longer, the penalty just keeps growing.

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#4 -Retirees with Current Drug Coverage - Beware!

• Retirees with current drug coverage through a retiree or employer health plan could lose ALL RETIREE HEALTH COVERAGE (not just drug coverage) by signing up for Medicare Part D.

• Many letters to retirees regarding “creditable coverage” do not make this pitfall clear.

• If you mistakenly join Part D, you and your family members covered by the retiree plan may not be able to get the coverage back.

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#5 The “Donut Hole” – Not Such A Sweet Deal

• You get no coverage for costs between $2,250 and $5,100

• You keep paying premiums but get no benefit• It is unclear what drug costs will get counted

toward the $2,250 (i.e. all out of pocket costs or only those that show up in the Medicare computer)

• Many factors will make it difficult for individuals to reach the other side of the hole ($5,100) and to start getting benefits again.

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#6 Choosing a Plan? Welcome to the Valley of Tiers• Already complex decisions related to cost and coverage are

now more difficult because of choices within plans.• Many plans are organized into different “tiers” based on

whether you are using generic, preferred, non-preferred, or specialty drugs – Higher tier = Higher cost.

• Plans may force you to try cheaper drugs, perhaps with bad side effects, before you can get the “higher tier” drug they offer.

• In addition, plans have different costs depending on whether you go to a preferred, non-preferred or off-plan pharmacy.

• For example, you could have as 12 different combinations of premium and co-payment amounts and the possibility of even more confusion if all your drugs are not covered in one plan

• End result – it is virtually impossible to make an informed choice!

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DANGER – With Part D, You Could Pay MORE!

• Annual Premium $ 445• Annual Deductible $ 250• Co-payments (varies) $ 155 - $500• Donut hole coverage gap $ 2,850• Additional charges based on

whether drug is covered, pharmacy is in network, etc. Unknown

• How does this compare with what you pay now?• How does it compare if you simply bought your drugs from

Canada or from places like Costco? • How would it compare if the government could negotiate

lower drug prices, like those for the VA?

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#7-12 More Dangers on the Road to Part D

• Persons in special programs for HIV/AIDS, disabled children, other groups face even more confusion.

• Many beneficiaries will find this new “benefit” actually reduces assistance from other programs like food stamps.

• Beneficiaries in long term care facilities nursing home left to fend for themselves in terms of making choices.

• Each plan has its own grievance and appeal process. Doctors and patients are forced to deal with multiple, differing appeal processes to get needed drugs.

• Beneficiaries will be trapped in plans even if drug formularies changes

• Drug plans have little or no oversight from government.

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#13 Unlucky California Will Lose Nearly $420 Million

• The federal government will “clawback” $1.4 billion of the money formerly in Medi-Cal.

• Experts estimate that over-all, California will lose more than $250 million in the first year alone.

• Since the State is no longer buying drugs directly, it potentially loses all the discounts and rebates, an estimated loss of $170 million more.

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America Can Do Better

After all that you’ve heard, what do YOU think…

Will Medicare Part D reduce cost, improve access, and increase your ability to live a healthy life?

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Together We Can Get A Real Prescription Drug Benefit

• CARA has a plan for how to “Reconsider and Reform” Medicare Part D,

• Here are at least 4 Ways you can help.

– CIRCULATE & ADVOCATE

– EDUCATE

– SHOUT OUT AND TELL OUR STORIES

– ORGANIZE & MOBILIZE

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At the national level… CIRCULATE & ADVOCATE

• Take the CARA Medicare Petition and get everyone you know to sign it.

• Tell people about the problems with Part D and urge them to join the fight for a Real Drug Plan.

• Join the CARA Action Team (CAT) and participate in meetings in your area. Call 877-223-6107(toll free) for the Team in your area.

• Organize to hold your representative accountable for real relief from high drug costs– Support HR 3861, the Medicare Informed Choice Act (Stark,

Schakowsky) to extend the deadline– Support HR 752 (Stark, Berry) the Medicare Prescription Drug

Savings and Choice Act, to create a uniform drug benefit in Medicare and require that Medicare negotiate for the best possible prices. 

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CALL YOUR CONGRESSIONAL REPRESENTATIVES• Dial the House & Senate switchboard

1-202-224-3121 • Ask the operator for the first representative you want to reach • When connected: “Hello, I live in your district and I’m calling to

ask you to: – Support HR 3861, the Medicare Informed Choice Act to

extend the enrollment period and protect against bad choices.– Support HR 752, the Medicare Prescription Drug Savings and

Choice Act, to create a uniform drug benefit in Medicare and require Medicare negotiate for the best prices

– Reconsider & replace Medicare Part D with real reform that saves Medicare and provides relief from high drug prices.”

• Repeat until you have called all 3 of your representatives!• Call today, call often, get your friends to call too!

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EDUCATE

• Be part of a team to follow-up on today’s workshop. – Take what you’ve learned today back to other

groups you’re involved with– Attend local Medicare Part D trainings and

workshops to help “raise the red flag” about problems with Part D.

– Write a “Letter to the Editor” about the pain and confusion Medicare Part D is causing(see information in your toolkit).

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“SHOUT OUT” AND TELL OUR STORIES

• Share your experiences and those of people you know– “Tell Your Story” form is in the Toolkit to help make

the issues real to the media and local policymakers. – Tell your story today!– Collect stories from others tomorrow– Host a local “Shout Out” to get the press to cover the

“dangerous side” of Part D. • The Tool Kit can help guide you with these and other

actions. • Your local CAT Team can help you organize a “shout-out

and media” in your area.

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At the state level…ORGANIZE & MOBILIZE• Support State legislation being developed for the 3rd year

of the statewide OuRx Coalition - Year 3? – Part D!– Establish a “wrap-around” benefit to protect “Medi-

Medi’s”– Provide assistance with co-payments and deductibles– Increase funding for consumer counseling and support – Demand oversight and regulation of drug plans

• Participate in state hearings on Medicare Part D• Coordinate “shout-outs” and legislative visits through the

local CAT’s to participate in your area.

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REACH OUT TO POTENTIAL ALLIES

• CARA member groups• Local senior and disability advocacy groups• Pharmacists and their organizations• Non-profit housing providers to seniors and

persons with disabilities• Nursing Homes & Residential Care Facilities• Legal Services Programs • Paid and family care givers

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CALL TO ACTION

• Now it’s time to move into action

• Join us as we plan the next steps in your area

• And to end on an up-beat note, join us in song as we prepare to march and sing our way into the history books.

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Stay Involved - Join the CARA Action Team (CAT)

The Alameda County CAT meets every 2nd Monday, at 10:00 a.m. South Berkeley Senior Center

Ellis at Ashby in Berkeley

For more information, contact Jim Forsyth at 510-581-5169.