• Medicare Part D Alert
  • October 19, 2005
  • Law Firm: Manatt, Phelps & Phillips, LLP - Los Angeles Office
  • This is the first in a series of updates relating to the implementation of the new Medicare prescription drug benefit, or "Medicare Part D." Part D prescription drug coverage begins on January 1, 2006, for Medicare beneficiaries who are enrolled in approved private sector prescription drug plans, or "Part D plans." Part D plans include "PDPs," or stand-alone Part D plans, for people who are in Original, fee-for-service Medicare, and "MA-PDs," or Medicare Advantage Part D plans, for people who are enrolled in Medicare Advantage for all of their Medicare benefits.

    1. CMS Releases Information about Part D Plans Available in New York

      On September 30, 2005, the Centers for Medicare and Medicaid Services (CMS) released limited details about the Part D plans that have been approved to offer Medicare prescription drug coverage in New York State. Twenty-one companies will offer 46 different stand-alone PDPs. Twenty-five companies are offering more than 100 "MA-PDs." Among PDPs, monthly premiums range from $4.10 to $85.02. The average PDP premium is approximately $32. Many PDPs will not have any deductibles. A few PDPs will provide coverage for generic drugs in the benefit gap (also known as the "donut hole"). One PDP, with a monthly premium of approximately $47, will provide coverage for both generic and brand name drugs without any donut hole. More information about the plans, including the drugs that they cover and the pharmacies in their networks, will be available on the Medicare website beginning October 17, 2005. Part D plans are permitted to begin marketing now, and individuals may begin enrolling on November 15, 2005.

    2. Special Issues for Dual Eligibles

        a. CMS announces PDPs eligible for automatic enrollment

        CMS announced that New York's dual eligibles, or people enrolled in both Medicare and Medicaid, will be automatically enrolled at random into 11 PDPs that have low-to-average cost premiums. These automatic enrollments will be communicated to dual eligibles in late October. Dual eligibles who are presently enrolled in Medicare Advantage plans will be automatically enrolled into related MA-PDs. Dual eligibles will be allowed to switch plans beginning November 15, 2005.

        b. New York requires dual eligibles to remain enrolled in Part D plans

        New York's Department of Health (DOH) has told County Medicaid Directors that enrollment in a Part D drug plan will be considered a condition of eligibility for Medicaid benefits for all dual eligibles. This means that if any dual eligible declines "voluntary" enrollment in a Part D plan, that person will lose all Medicaid benefits in New York. According to CMS, dual eligibles should be auto-enrolled into Part D plans by late October, 2005, but they will be reminded that they may switch plans or disenroll. Beneficiary advocates have expressed concerns that dual eligibles could decline Part D enrollment out of confusion over the impact of Part D on their existing Medicaid drug benefits.

        c. Dual Eligibles Transition Report

        The Medicare Rights Center recently issued a report prepared by Manatt, Phelps & Phillips, LLP, outlining the risks to dual eligibles of falling through the cracks of the Medicare drug benefit transition. The report, "6.4 Million at Risk: Protecting the Poorest Americans During the Medicare Drug Transition," describes the challenges that dual eligibles and those who serve them could face in ensuring seamless drug treatments in the early months of the new Medicare prescription drug benefit.

    3. Enrollment in Part D: Assessing the Variables

      Beginning November 15, 2005, all Medicare beneficiaries will have to decide whether to enroll in a Part D plan. The decision whether to enroll and what kind of plan to enroll in should be based on many variables, including the type of existing coverage the beneficiary has; the beneficiary's income, resources, and drug costs; the particular drugs the beneficiary uses; the beneficiary's preferred pharmacies; and even his or her living arrangements. A few examples of special enrollment considerations for different beneficiary populations include:

      • beneficiaries who are presently enrolled in Medicare Advantage plans will be automatically disenrolled from those plans if they enroll in a stand-alone PDP;
      • beneficiaries who have retiree prescription drug coverage may be subject to loss or reduction of retiree health benefits if they enroll in a Part D plan; and
      • beneficiaries who have coverage through New York's Elderly Prescription Insurance Coverage Program (EPIC) may, but are not required to, also enroll in a Part D plan.