Deciphering Medicare Part D

Susan Miller, Patient EducationDouglas A. Magenheim, MD, MBA, FACP

Medicare D Is Important for Your Health Care

How many of you pay for most of your prescription medicines?

Will Seniors Enroll?

Cost of Prescriptions Will Go Up

• The cost you pay today is much higher than what you paid just 5 years ago.

• Medicare D insurance will help you with the cost of your medicine.

• Yes, it is confusing to understand, but Medicare estimates the average senior will save a minimum of 30-40% on their drug costs

$644

$999

$1,457*

$2,763*

2000 2003 2006 2013

Average annual out-of-pocket drug costs among the Medicare population:

Projected:

Senior Spending on Prescription Medications

SOURCE: Kaiser/Commonwealth/New England Medical Center 2001 Survey of Seniors in Eight States.

16% 17%14%

33%30% 31%

Heart Failure Diabetes Hypertension

Seniors with coverage Seniors without coverage

Percentage of Seniors Not Taking All Prescribed Medication

Understanding Medicare D

How does the plan work?

Overview of Plan• Medicare Part A and B – now Part D for

prescription drug coverage• 16 insurance companies are selling 57 plans

from which to choose– Snowbirds must choose national plan

• You must enroll in a plan – you are not automatically going to get prescription drug coverage

• You must pay a monthly premium for this ranging from $14 to $68 a month

• It is optional – you don’t have to buy it

Overview of Plan -- Enrollment

• You must enroll by Dec. 31, 2005 to have coverage Jan. 1, 2006 – can change your mind before 12/31/05

• Must enroll by May 15, 2006 to avoid premium penalty– can change your mind 1 time before 5/15/06

• Each year, annual open enrollment will be held in November for a January 1 effective date– This will be the only time you can change your mind

each year.

Medicare and Employer/Union

Coverage, including the

Military

Original Medicare Plan with or without supplemental/ secondary plan

Medicare Advantage and Other Medicare

Health Plans

Medicare and Medicaid or

Other State/Federal

Assistance Programs

Current Insurance Coverage*

Which box describes the health insurance you have now?

*Does NOT include doctor samples, discount cards, Medicare-approved drug discount cards with or without the $600 credit, free clinics, or drug discount websites

Medicare and Employer/Union

Coverage, including the

Military?

Check your company’s plan – Most Employer

Coverage is BETTER than

Medicare D Plans

Original Medicare Plan

Medicare only – Enroll in Part D to

save money on your medicine

Medicare with supplemental

plan – check your supplemental plan for drug coverage

Medicare Advantage and Other Medicare

Health Plans

New plans will include drug

coverage. If you like it – stay with it

or evaluate other options from

Anthem, United, etc.

Medicare and Medicaid or

Other State/Federal

Assistance Programs

No drugs through Ohio Medicaid

effective 1/1/06. Must choose

Medicare D Plan. Extra Help with

benefits and costs

Current Insurance Coverage*

How does Insurance Work?• Take your prescription to a Network pharmacy• You will get an immediate discount on prescriptions• If your plan has a deductible, you must pay for this out of

your pocket– Deductibles are $0 -- $100 -- $250

• After deductible, you pay a percentage of the discounted price OR a flat dollar amount– Co-insurance percentage -- 25-75%– Flat dollar copayments -- $0 to $60 per prescription

• Most plans have a coverage gap or “donut hole”– After spending $2,250 (you and insurance company), you pay

100% of the cost up to $5,100 – or $2,850 out of your pocket– Some plans offer limited coverage for generic drugs during this

gap.• Catastrophic Coverage - You pay only 5% of the cost of

your drugs

What Else Should You Know?• Insurance companies are selling both drug plans

and “Advantage Plans” – know the difference and what they are selling

• You must use a network pharmacy – ask who is in the network

• All plans have drug lists or formularies. If your drug is not on the list, it may not be covered.– What you pay for your medicine will depend on

“where” it falls on the insurance company’s list• Some companies are partnering to sell their

plans through specific organizations– AARP and Walgreens = United HealthCare– Walmart and State Farm = Humana

Extra Help Is Available• Financial help is available if:

– Your income is less than $11,500 (single)– Your income is less than $23,000 (married)

• Apply for help with the Social Security office– If approved:

• Little or no premium to pay• Little or no deductible• Copayments for drugs are $1 to $5• No coverage gap

– Still must enroll in a plan

To Apply For Financial Help

• For financial help: Social Security Office– Call 1-800-772-1213 to apply for help– www.socialsecurity.gov

Premium Penalties• Insurance companies want you to enroll

– They will try to talk you into the basic plan at $14 per mo.• What if you don’t enroll?

– Cost to enroll for 1 year: $14.43/mo = $173.16/yr– Cost to enroll 1 year later – 1% per month penalty = 12%

• $14.43 x 12% = $1.73• $14.43 + $1.73 = $16.16/mo or = $193.92/per year

• Will cost you $20.76 to wait versus paying $173.16 to pay for something you may not use.

• No penalty if you are covered by employer or retiree plan that ends

Cost of Medicare D Insurance

0

500

1000

1500

2000

1 3 5 7 9 11

Years

Sum

of E

xpen

ses

Cost of Plan

Cost of PlanStarting AfterOne Year

How do I Choose A Plan?

• Medicare.gov is most comprehensive source of information

• How to use this tool and enroll in the plan that is right for you!

• Have friend/family member help you review the website

• Or Call 1-800-MEDICARE

Talking with Your Doctor

Understand the Plan You Choose

• Look at the list of your medications and their costs

• Ask for a copy of the company’s formulary drug list

• Bring your insurance formulary list to your doctor’s appointment– Will help the doctor understand the options

you have and help make decisions about changing your medications

Talking with Your Doctor

• Don’t be afraid to ask the doctor what the medicine is for and what other alternatives there are (i.e. Can I safely switch to a less expensive medication?)

• Ask your pharmacist and doctor about generic alternatives

• Understand how often you must take your medication and when

Talk with Your Doctor

• Most insurance plans will only give you a 30 day supply of medicine at a time– Plan for this when you call the office for refills

or follow-up appointments– Some offer 90 day mail in

• If you have to change your pharmacy, let your doctor’s office know so your information can be updated.

The Medicare Part D Plans

Questions?