Transcript: Dialing You Into Medicare Part D

The following is a transcript for the video presentation Dialing You Into Medicare Part D.

The following is a presentation of UCTV
For more information: www.uctv.tv
UCSF Osher Lifelong Learning Institute presents
Medicare Prescription Drug Coverage
Dialing You Into Medicare Part D
Presented by Marilyn Stebbins, PharmD
Clinical Professor of Pharmacy
UCSF School of Pharmacy

Stebbins: So let's talk about Medicare.

Who is Medicare covering?

Who is eligible for Medicare?

Most of you in here may be in the first category: 65 and older.

Actually, it's 64 and 9 months when you're able to join Medicare based on your age.

Medicare also covers younger people who have disabilities that their disabilities are claimed from the federal government.

It isn't just people who are 65 and older.

It is also people who are disabled.

The other issue is: to get Medicare, you or your spouse had to work for a specific amount of time to have your employer pay in to Medicare.

So there are people out there that aren't eligible for Medicare who are over the age of 65.

Medicare has become alphabet soup.

It has become very complicated with the new benefit, but we now have Medicare Part A, Part B, Part C, and Part D.

Many of you may be well aware of Medicare Part A because your Medicare card says "Medicare Part A" on it.

Medicare Part A is your hospital coverage.

It's automatic.

If you get Medicare, you automatically without doing anything else get Medicare Part A.

So if you were hospitalized, you would have coverage.

You would have a specific amount of coverage with traditional Medicare.

However, Medicare Part B is an optional benefit.

However, most people have Medicare Part B to cover their doctor visits or their outpatient coverage.

Medicare Part B is optional.

However, you are given Part B and you must opt out.

So you have to actively say you don't want Part B in order not to take Part B.

So most people have it because when they turn 65 they got A and B.

They did not opt out of B.

Those have been available through Medicare since 1965.

This year [2005] marks the 40th anniversary of Medicare.

Interestingly, it's the first time we've seen a major benefit addition in 40 years.

And, that is Medicare Part D.

But before I get to Medicare Part D, which is the new prescription drug plan, Medicare wasn't too bright when they first thought this up because originally they made the drug plan Part C.

And everyone complained and said, "Can't you at least make D stand for 'drug'?"

[laughter]

So they listened, and Part D is the prescription drug coverage.

I'm going to wait a minute to go into that because I would like to cover first Medicare Part C.

Medicare Part C is also called Medicare Advantage or Medicare HMO.

It takes Medicare Part A and B and sometimes some drug coverage and rolls 'em into one.

What is Medicare Part C or Medicare Advantage?

Many of you may have known it as a Medicare HMO because up until this year [2005] the only plans available in Medicare Part C have been Medicare HMOs.

What happens is these are actually part of Medicare.

Patients have to actively determine that they'd like their traditional Medicare to be turned over to an HMO and in turn their Medicare Part A and B is now covered by one plan, typically an insurance company that's not Medicare, and many times these plans included drug coverage.

So again, it's the whole ball of wax: the hospital, your outpatient services, and many of you may have had a drug benefit through your Medicare Advantage plan.

Why did people sometimes go to these Medicare Advantage plans?

Well many of them offered extra benefits with some lower co-payments than traditional Medicare.

For those of you with traditional Medicare, you may realize that it's a fee-for-service insurance, meaning it covers 80% of your coverage and you are responsible for 20%.

Many people add on a supplement to their Medicare in order to cover that extra 20%.

Well, some people determined that this option was very expensive.

These Medicare HMOs actually cover more than Medicare, and it's not a percentage I pay, it's a fixed co-pay.

Many of these plans enticed people because they offered prescription drug coverage before Medicare did.

Many of you who are in a Medicare Advantage plan may realize that that drug coverage has shrunk and shrunk and shrunk over the years.

It started off as a pretty good drug benefit of brand-name and generic drugs.

However it's been whittled away to generic-only coverage or no coverage at all because of the exploding costs of prescription drugs.

So Medicare Part C offered a way to get some of these extra benefits.

What are the disadvantages of the Medicare Advantage plan?

Some people say, "I don't want to be tied to specific doctors and hospitals. I want be able to use whatever doctor I want to use, and I don't want to have to go through the hassle of referrals to specialists," and all of those things.

With traditional Medicare, you can go wherever you want, as long as that provider or hospital takes Medicare.

With the Medicare Advantage plan, or Medicare Part C, you're locked into a group of physicians who may be specialists and primary care doctors as well as being locked into a hospital system.

You would have to stay within that system.

Some people don't like that; they like choice.

These plans charge a premium.

They cost more to join because they're offering some other benefits.

People would pay their Medicare Part B, which gets taken directly out of your Social Security check for most of you unless that's subsidized by the state so some people don't pay it if they're low-income.

However, most people have Medicare Part B taken out of their Social Security checks and then on top of that they pay a premium for a Medicare Advantage plan.

That is exactly how it works in the new world starting in 2006 as well.

These plans cost an extra premium.

Now we're going to go in to the big new world.

And the big new world is Medicare Part D.

Some people call it "D for Disaster."

I think it has been somewhat of a disaster for Medicare-eligible people because it is not very understandable.

I don't know who wrote this, and as we go through it, you'll ask yourself the same question.

Many of you may be retired insurance agents, and I'll guarantee you -- no insurance company wrote this, because they'd never get anybody to buy it because it's so crazy to understand.

So what is it?

It is the new, standalone prescription drug benefit from Medicare.

It is the first new benefit Medicare has added since 1965.

This drug benefit must offer both brand and generic drug coverage.

So it can't be a generic-only benefit.

It is voluntary.

Now if you remember a minute ago I told you Part B is also voluntary however you had to opt out of it if you didn't want it.

This is different.

You must opt into it.

You have to actively choose a Part D benefit if you want drug coverage.

It's voluntary, but you must choose to enroll.

There are few different groups that we will talk about in a moment who will be auto-enrolled -- who don't have to do anything.

But that's a very small group of people.

This is a standalone drug benefit.

This is all by itself.

Part D is only drug coverage.

A second ago I talked about Part C.

Part C is A and B rolled into one and D.

So C = A, B, and D.

If you are a Medicare Advantage patient and you have Medicare Part C or you choose a Part C plan, you would not go get a standalone Part D benefit.

And in a minute I'll tell you what'll happen if you do.

It'll kick ya out of the other one.

So this is a standalone benefit that can be combined with Part A ... or Part A and Part B ... and with a Medicare supplement.

But it cannot be combined in most instances with Part C.

So what does Medicare cover?

The new Part D plan or the drug benefit in Part C covers drugs that are available with a prescription.

So they don't cover over-the-counter medicines that you can get without a prescription, they cover prescription drugs.

They cover biological drugs.

You may not understand what a biological drug is but there are many new drugs that are very high-tech that you self-administer, or you inject, you don't take by mouth, that are used to treat many diseases that we didn't use to be able to treat very well.

Those drugs are considered biological.

Also Medicare covers insulin.

It covers the medical supplies associated with taking insulin.

So it's going to cover your syringes, you're going to have your strips covered, your lancets, those types of things, if you take insulin -- that's also new.

Very interestingly, Medicare isn't the administrator of these prescription drug plans.

In your area [San Francisco], there are 57 options for prescription drug plans.

These people have contracted with Medicare to provide this service.

Every plan may not cover all drugs.

Every plan has the option of covering a list of drugs as long as they cover at least 2 drugs in every category.

So in a moment you'll see why it's "buyer beware."

The plan you choose you need to actively know whether the drugs you take are covered by that plan.

Plans are required to cover brand names and generic name drugs.

But remember I told you that the minimum requirement is that they cover 2 drugs per category?

Well if there are 2 drugs in a class that are generic that class may only have generic drugs in it.

So not that that's necessarily a bad thing, but because this prescription plan is very expensive for the government because there is no funding for this Part D benefit.

Part A is funded through your employers.

And Part B is funded through your previous employers and you paying into it.

Part D ... has no subsidy.

The only way this plan survives is if people sign up. The plan needs people to

pay premiums that aren't sick and who don't take drugs.

Because if only people sign up that are on lots of drugs there's no money backing this system up.

There's no money funneling into Medicare Part D.

It's self-funded.

So, it runs somewhat on the HMO principle, which is: Get healthy people in, have them pay premiums to help support the people that are using the system.

So it's a little tricky.

What drugs aren't covered by Medicare Part D?

Drugs for weight loss or weight gain.

Now there are some exceptions because some people on cancer or HIV therapies have what we call wasting syndromes where they lose a lot of weight.

There are some exceptions for those people for weight-gain drugs.

You might laugh at this one, but fertility drugs aren't covered.

But remember there are people under the age of 65 who are covered by Medicare.

People with disabilities.

So that might have come into play.

Ladies and gentlemen, there are no cosmetic drugs, there are no hair growth drugs.

They are not covered.

Also, drugs for the relief of cough and colds.

Now typically these drugs are over-the-counter drugs so they wouldn't necessarily be expected to be covered.

There's an exception for that in a moment with certain groups.

And again I said "non-prescription drugs"?

But 2 classes of drugs become important.

And these are 2 classes that Medicare has said will not be covered.

One is barbituates.

I'll give you a common barbituate: phenobarbitol, a drug used for seizures ... not covered.

Unclear why.

Someone said there's an old statute in Medicare regulations.

No one quite understands it.

Benzodiazepines, a big, fancy word for drugs like Valium, Ativan, temazepam, lorazepam, restoril, some sleep aids, some drugs people use to sleep, as well as drugs used for anxiety.

Now the good news is although Medicare is not going to cover these drugs, they're usually inexpensive drugs.

They're generic, and they typically cost less than $30 a month anyway for a 30-day supply.

So if they had to choose a couple classes, they at least chose classes of drugs that are less expensive, so that if you had to pay for them on your own, you could.

Also, Congress -- did you guys hear the goings-on several weeks ago after Hurricane Katrina -- that there were many congressmen saying, "Let's stop this drug benefit for this year, put it on hold for a year so that we could use the money to pay for Hurricane Katrina"?

Did any of you hear that?

Well, obviously this had gone way too far and there was no way it was getting stopped.

But what Congress did say is for one year they're excluding one more class of drugs that have been typically covered and that is drugs for erectile dysfunction.

Viagra, Cialis, and ... Levitra.

Those 3 drugs are now excluded, and that's going to help pay for Hurricane Katrina.

I wonder if they know that. [laughter]

Okay, what is Part D going to cost you?

This slide I find somewhat irrelevant, and the reason is that these were the national guidelines that were put in place by Medicare when they went out and put bids out for who would offer this benefit.

They said you have to charge a premium or you can charge a premium, there was sort of a ceiling price when it went out to bid, it was at about $37 then.

They said you can charge a deductible, up to $250.

And there's this cost-sharing that will go on up to a certain point and then there's this coverage gap or donut hole and then when someone hits catastrophic, they'll get coverage again.

That is so complicated.

I'm going to walk you through it in just a second.

But I'm also going to tell you that what we found is that now that we know the plan, none of this pertains, because every single one has a different premium, there are plans with no deductible, and there are plans with $250 deductibles.

Most plans don't charge a percentage of the drug cost, they charge a flat co-pay where the government said up to $2,250, roughly the patient will pay 25%.

That isn't the way it's working.

Plans are charging fixed co-pays.

But I am going to walk you through the logic -- or illogic -- of the Medicare plan and show you what it looks like.

But before I do that, I think it's very important that we talk about the penalties.

Have any of you heard about the penalties?

You remember me telling you that there is no money to pay for this Part D benefit.

No money coming in from employers, and remember what's happening to Baby Boomers?

They're all starting to reach retirement age.

And many of your Medicare benefits and Social Security benefits were being paid by Baby Boomers and there were lots of them putting in to the fund.

But when those Baby Boomers hit and we suddenly have a lot of over-65 people collecting Medicare, we don't have that boom population paying into the system.

And, remember, Part D, they don't pay into it anyway.

So as I said, Medicare is counting on people joining that aren't sick.

Guess how they ensure that they join?

They charge a penalty if they don't join.

So, let's talk a little about the penalty.

First of all, this year, enrollment goes from November 15 [2005] to May 15 [2006].

It's a 6-month window.

This is the only year we're going to have 6 months for open enrollment for Medicare Part D.

Every other year after this, they're going to have between November 15 and December 31 and that's it ... to choose your plan.

Now, if you do not choose a Medicare plan, Part C or D, it can be C or D, if you do not choose one, by May 15 [2006] -- and in a minute I'll explain this to you but -- and you've been told you should or that the coverage you have currently is not as good as Medicare so you need to join, you will be charged 1% per month penalty, and you won't be charged it unless you choose to join a plan later.

And I'll explain that.

Let's say this year [2005] you're on no medications.

Why do I need a Medicare prescription drug plan?

Why would I want to pay a premium?

Why would I need this?

I'm not going to join.

Okay, no problem.

You don't have to join.

You don't have to pay anything.

Three years down the road you develop diabetes, congestive heart failure, lung disease, cancer, and you say, "Oh, my gosh, I suddenly have 6 medicines, I can't afford these, I have to join a prescription drug plan."

Well, first, you can only join during that year during open enrollment.

You can't choose it at any time except between November 15 and December 31 except this year [2005].

You can't just pick a day and join it.

Second, when you do decide to join, that penalty hits.

Now, I've heard some pretty savvy, eligible patients who've said, "No problem! I'm going to pick a zero premium plan, so zero times any penalty is still zero."

Doesn't work that way.

They charge you 1% per month from the time you were eligible to join this plan.

So the May 15th of 2006 if you could have joined until the time you joined, 1% per month, of the national average premium at that time.

This year [2005], the national average premium is $32.

It will go up every year.

So, you don't join for 3 years.

3 times 12 -- because it's 1% per month -- is 36%.

Let's say that year the premium national average is $50.

You will pay 36% more than $50.

So whatever 36% of $50 is gets added onto that $50 premium.

No, actually -- step back --

You take 36% of $50 -- okay? -- whatever that number is...

...and you add it to whatever plan you choose's premium.

So if that plan has a zero premium, you still have to pay something, and it's 36% of $50.

$18 -- somebody smart back there.

Do I have a student helping me?

So you would pay that premium, and you pay it you pay that same percentage higher every year, you go against the national average.

So they are really penalizing you for not joining.

So that's the way this is going to be funded is to get people in early.

Do we have a trick around that?

Yeah.

The trick is there are in some counties, however not in San Francisco county, and I believe not in California, but in the nation there are some zero-premium plans.

So if you aren't sick, you don't take any medicines, you can join a zero-premium plan and pay nothing, but you're still enrolled.

And then when you do decide that you need medications every year you can choose a different plan, you can pick the plan that's right for you if you end up needing it.

In this area [San Francisco], the lowest cost of a prescription drug plan is I believe $5.63 a month.

So if you wanted to hedge against getting sick, you could pay $5.63 a month for a plan you're not going to use to avoid incurring a penalty later.

Who won't have a penalty?

If you get a letter by November 15 [2005] from whomever you get drug coverage from now, let's say you have drug coverage and you have Medicare because you know -- someone take a guess at how many Medicare-eligible patients have no drug coverage? -- 'cause you know Medicare hasn't offered drug coverage -- How many people do you think...?

What percentage of patients have no drug coverage?

What do you think? 60? 70?

It's very small.

It's only 37% ... of Medicare-eligible patients have no drug coverage.

The rest, the other 63% have some coverage.

They have it either through their employer that they worked for or their spouse worked for.

They may have it through the VA [Veteran's Administration] or TRICARE.

They may have it through Medi-Cal.

Or they may have joined a Medicare Advantage plan that had some drug coverage.

So even minimum drug coverage counts as some drug coverage in that percentage.

Or they may have a Medi-gap supplement that had some drug coverage.

So actually quite a few Medicare-eligible patients have some form of drug coverage.

Well, your previous employer -- if you get drug coverage from them for retirement benefit -- or your union, or the VA or TRICARE who's been giving you drug coverage...

If your coverage is as good as Medicare Part D, your employer or union had to send you a letter by November 15 [2005] to tell you that.

Anybody in here get that letter?

Okay.

Did it tell you that your coverage was at least as good as Medicare?

Did they use terms like "creditable" and "actuarily equivalent"?

Because we heard that that's the language they were going to use.

How many of you know what those words mean?

I didn't, I had to look them up.

If your coverage is as good as or better than Medicare Part D, your employer had to tell you that, which meant you could keep your current coverage, not go into Medicare Part D, and if you lost your coverage later you would not incur a penalty to join a Part D plan.

Let's say you have VA or TRICARE.

And you have drug coverage.

You will not be assessed a penalty if you choose a Part D plan later if for some reason you lose your VA or TRICARE benefits.

So, there are people that will not incur a penalty.

The other thing is -- remember I told you you can only join between November 15th and December 31st? -- what happens to people who turn 65 in the middle of a year?

There's an open enrollment period for anyone who becomes eligible for Medicare or who loses their employer coverage VA or TRICARE -- you get the same 6-month window everybody gets this year who sign up without a penalty for a Part D plan or a Part C plan.

Here is the ugly benefit, okay?

Here's how it works!

So this was that goofy thing I told you doesn't pertain to every plan but this was the national standard when plans went out to bid.

$250 deductible.

The black represents what the patient pays.

So you start off by paying $250 for your drugs -- you don't get any coverage for the first 250.

Before we do that, you pay a premium.

As I said, in California the average is $25 a month.

Multiply that by 12 -- that's $300 [a year].

So off the bat if you were on a national average plan you'd be paying a $300 premium.

There are many plans with lower premiums.

But that doesn't factor in to any of this.

The premium is the premium -- it doesn't count toward the drug costs.

But your $250 deductible, you pay that.

After that, that's where Medicare and your plan kicks in.

On average, the plan and Medicare covers 75% of the cost of your drugs, you pay on average 25%.

That may be in a percentage or a fixed co-pay, many structures are fixed co-pays.

That 75% of that drug costs -- up to total drug costs of $2,250 -- is covered by the government and the prescription drug plan.

You pay roughly 25%.

You pay $250 and then you pay 25% of the next $2,000 in drug costs.

These are total drug costs.

It includes what everybody is paying.

You, the plan, and Medicare.

Now, how many of you have heard of the coverage gap or the donut hole?

Okay, we think Krispy Kreme's stock went down when Medicare announced the donut hole 'cause it was very coincidental.

But what happened is they asked us to quit calling it a donut hole and asked us to call it a coverage gap.

It's the point at which the patient becomes 100% responsible for the cost of their drugs.

So if you look here, you see that they paid the first $250, they paid 25% of the next $2,000, total drug costs are now $2,250.

For the next amount of money, up to a total drug cost of $5,100, patient pays everything.

Everything. That's why it's called the big fat donut hole.

That's why it's called the coverage gap.

When you reach $5,100 in total drug costs, which is roughly equivalent to $3,600 in your costs, that came out of your pocket, 'cause the rest was paid by Medicare or the plan, then you reach what we call "catastrophic," and the patient pays either a co-pay or 5% of the cost of the drug, whichever's greater -- not whichever's less -- whichever's greater.

So -- and that's unlimited -- but what you have to remember is the cost resets every year.

It's not a lifetime benefit.

Every year you go through this same schematic.

Now we're going to talk a little bit about people who are low-income who will not have this same structure.

They won't have a donut hole.

They won't have a deductible.

And they won't have a premium.

So we'll address that as well.

This is the general plan for anybody who makes over 150% of the poverty level, and I'll tell you those numbers in a minute.

Okay, what do you currently have?

If this doesn't pertain to you -- [fingers in ears] la, la, la, la, la.

Close your ears because I don't want to confuse you.

We're going to go through 5 scenarios based on what you have and actually it's 6.

So we're going to talk about those of you with:

1. traditional Medicare Part A and B,
2. Medicare Part A and B with a supplement,
3. retiree coverage from a current or former employer for you or your spouse,
4. a Medicare HMO or Medicare Part C plan,
5. Medi-Cal and Medicare -- you are called "dual-eligible," and
6. VA and TRICARE.

If you don't mind, raise your hand if you have traditional original Medicare A and B or A and no B and/or you have a MediGap supplement -- but that MediGap supplement doesn't cover drugs -- so you have A and B or A and no B or you can also have a supplement added to that but it doesn't cover drugs.

What are your options?

You are the folks that are going to incur penalties unless you join now before May 15 [2006].

Here's your situation.

You have the option to say, "I'm very happy with my current coverage A and B or A and I have my supplement or I don't have my supplement that covers what my Medicare does for my medical and my hospital. I don't need drugs. I don't care about that penalty later. I'll be worth it if I get sick."

You can go on exactly like you are and do nothing.

But remember if you choose not to enroll by May 15 [2006], you will incur a penalty when you do choose to join.

And don't forget -- you can't join in the middle of the year.

So you get that whole year's penalty.

You get 12% a year.

The only year it's not 12% is this year.

And because of the May 15 deadline and because of some permutations, some 63-day window there's only 5% penalty this year.

But if you do nothing you will get a penalty when you choose to join if you choose to join.

What's your other option?

You can choose to enroll in a standalone Part D plan.

One of those that's just drug coverage, and I told you there's 57 options for ya, and keep your original Medicare exactly as it is.

You can do that.

Or, you can choose -- maybe I want one of those Medicare Advantage plans if it's going to be cheaper for me and I use doctors that are all in one group and I don't mind using that hospital and you could roll it all into a Part C plan and basically be turning your Medicare A and B -- you wouldn't pay for your supplement anymore -- and you'd get a Medicare Part C plan that would cover your drugs.

You could move into the HMO world.

This year there are a couple new options in Medicare Advantage for the first time they are offering some PPO plans or fee-for-service plans that look a little bit more like a hybrid of Medicare and HMOs.

These plans are more expensive but they allow you to go out of the group.

They allow you to see doctors out of the group and perhaps even hospitals out of the group.

If anyone is interested in that, we can look at that online as well.

But you basically have 3 choices:

1. Do nothing and incur a penalty.
2. Add a prescription drug plan to what you have, or
3. Turn everything over to a Medicare Advantage plan and get your benefit that way.

Those of you who have traditional Medicare and a Medigap policy that covers drugs.

Is there anyone in here who has that situation?

There were 10 Medigap policies that were full.

And 3 of them had drug coverage.

They're very expensive.

Most of them cost more than $300 a month in a premium.

And most of them don't have very good drug coverage.

To be honest with you, the majority of them are worse than Medicare Part D.

Now, and I'll tell you how the basic structure of these prescription drug plans with a supplement work.

They were a deductible.

They were 50% coverage.

Up to a maximum of $1,200 to $1,500 a year.

That's not very good coverage for a very expensive premium.

But there are people out there that this was still worthwhile because of the medication used.

So if you have one of those 3 plans, have you received a letter from that plan, you were required by law to get a letter from that plan.

Now remember this is not employer coverage.

This is strictly you purchased a premium additional to your Medicare A and B or A and it covered drugs as well as the supplement to your -- that was not covered by your A and B plan.

Oh, my gracious!

So let me tell you -- what we heard is that none of them are what we call "creditable" meaning none of them are as good as Medicare Part D.

Medicare Part D is a less expensive benefit for you than these benefits.

However, in saying that I probably find an exception.

So you do need to talk to your benefits administrator.

It is against the law for them not to have that answer by November 15 [2005], which is Tuesday.

You need to get that answer because you need to know if you're going to be affected by that penalty if you don't choose a Part D plan.

If your benefit with that Medicare supplement is not as good as Medicare and you choose to stay with it, you have that option.

I don't know why you'd do that.

But you do have that option.

But, down the road, say, oh my gosh, in July you say, "I made a big mistake, I goofed up, now I've got a terrible plan, I need one of those Part D plans."

First, you can't sign up until November 15th, and it doesn't go into effect until January, and you will pay a penalty.

These plans will not be sold after January 1st.

You can't buy one now.

But if you're in one, you can continue it if you choose.

Most people should not choose to, but you need to find that out.

So here's what you can do.

If you have one of these plans and you want out of it but you like the other coverage it gives you -- you like that extra coverage for what A and B don't cover?

You need to call them and say, "Drop my drug coverage."

Your premium will go down dramatically.

"Drop my drug coverage, I'm adding a Part D plan."

Or you could say, "Drop the whole supplement, I'll pick up an A and B supplement on my own, find the best one for me."

And add Part D.

Your other option is also to say, "Forget all of this traditional Medicare and supplements, I'm going to a Part C plan."

I'm going to go to one that covers all of those things and charges me a premium but I can live within the constraints of that plan.

So you have the option to:

1. do nothing but you too will incur a penalty if you choose to join later,
2. disenroll from that supplement's prescription plan, add a Part D plan,
3. disenroll completely from the supplement, add a Part D plan, and find another supplement to A and B,
4. choose to turn it all over to a Medicare Advantage plan.

Retirees -- how many of you are retirees that have a drug benefit through your employer or union?

Okay, this is not VA, this is not TRICARE.

This is through an employer or union.

So there are some of you out there.

You are actually probably sitting most likely the prettiest.

You were also required to get a letter.

Now this is only if your retirement benefit included drug coverage.

So if you had a retirement benefit that did not include drug coverage, you won't get a letter.

But if you had a retirement benefit that included drug coverage, have you received a letter from your previous employer?

How many of you have not?

Uh oh, okay.

You need to call the number of the benefits administrator for your -- the company you retired from -- and ask them what's going on.

Those of you who got a letter were you told -- I think you told me -- your benefit was as good as Medicare?

The letter has to tell you whether your benefit is as good as Medicare or if it's worse than Medicare.

I think I have a typo in here.

This says, "Do not sign up for Part D if your current coverage is equal to or better than your employer or union coverage." -- that should be Medicare.

Anyway, most people don't read these slides. [laughter]

I've been giving a hundred of these, and I just found that error.

You have to receive this letter by Tuesday [November 15, 2005].

If the letter tells you the coverage is as good as Part D and you like your coverage, keep it, chances are it's better, you're going to get along much better than Medicare Advantage, I mean Medicare Part D or Medicare Advantage.

Do nothing and if your employer drops you later?

You have a 6-month window to get in without a penalty.

So you won't get those penalties.

If you don't hear from them, please call your benefits administrator and find out what's going on.

Do not be lured into a Part D benefit if your employer or retiree told you your coverage is as good as Medicare.

Here's the problem.

If you accidentally sign up for one, you could be kicked out of your retirement benefit and not be able to get back in.

That would be a tragedy.

Because you may be signing up just for a standalone drug package but your retirement coverage is for everything.

That would be a real tragedy.

So if you get that letter that says you're as good, do nothing, be happy, go along.

Have any of you had your employer drop your drug coverage this year because they're telling you to go to Medicare?

That's happened quite a lot.

And we think it's going to happen more in the future.

Because drug coverage is very expensive for an employer.

But what Medicare has done is given your employer a tax-free subsidy to keep you on their dole instead of the government's dole.

But what we found out from employers is that's very paperwork-intensive and they don't have the resources to go after that tax-free subsidy so many of them are just dropping the coverage and sending people to Medicare.

So you may be faced with that if you currently have employer coverage, next year they may tell you you don't.

Every year they're required before open enrollment to tell you what your options are.

And whether your benefit will continue.

And if it's as good as Medicare.

So, basically, you don't do any-- if they tell you your benefit is worse, you do need to go and you need to pick a Part D plan or else you will get a penalty if you do choose one later.

If you choose to keep it you can, but if you choose to go to Part D later and they told you your benefit was not as good as Part D, you will incur a penalty.

Okay.

How many of you have a Medicare Advantage plan?

Common names are Secure Horizons, Health Net Seniority Plus, those are in my neck of the woods, Kaiser.

If you have a Medicare Advantage plan, many of these plans cover more than the Part D benefit.

You're going to get actually a better benefit.

But you also pay a premium for these plans, don't you?

You also should have before November 15 [2005] received your benefit packet.

It's a big, fat envelope.

It tells you what your benefit looks like starting 2006.

And the one I've seen for HealthNet compares it to 2005.

Okay?

You will get this packet.

Basically, the good news is many of the premiums went down.

Even with the addition of the more drugs than your drug plan.

And you're going to go back to getting brand-name drug coverage for a co-pay instead of full price.

I laugh because when you go to your pharmacy they tell you the co-pay and it's the full price of the drug.

That's not much of a co-pay.

Where's the "co," you know?

So anyway, you will get a brand name benefit back.

By law, they have to give you your brand name benefit back.

Typically we're seeing generic drugs in the $5 to $10 co-pays and brand-name drugs in the $25 to $30 co-pay range.

If you have a tiered benefit, tier 1, tier 2, tier 3, tier 3s are looking like the $55 range.

So you will have coverage, but it's not full coverage.

You also are subject to the donut hole.

You too will have the donut hole when you reach a certain point.

So your benefit will look like others, it just has different co-pay structures.

All of the Medicare Advantage plans we've seen have no deductibles.

So you don't have to meet that $250 deductible.

Now, what if you really like your Medicare Advantage plan and you're very happy with what they sent you?

You do not need to do anything.

You will automatically roll in January 1st.

Do nothing.

The only time you have to do anything is if you don't want to stay with that plan.

You have the option to get rid of that plan and go back to traditional Medicare and add a Part D benefit.

Or, you can choose another Medicare Advantage plan.

I have Medicare and Medi-Cal.

We're going to address this.

Dual-eligibles are the most at-risk people out there right now.

Because they tend to the the people who are on the most medications.

Whether they're elderly or disabled.

They tend to be on medications.

Starting January 1st [2006] this is a huge change.

Now remember this is only in the context of those Medi-Cal patients who also have Medicare.

Medi-Cal and Medicare -- that's "dual-eligible."

Those people no longer have a Medi-Cal drug benefit.

They still have Medi-Cal for their hospital and doctor visits, but that little white card with the California blue seal doesn't work for your drugs after January 1st [2006].

You have been getting drug coverage for zero co-pay, right?

No longer.

Those days are over.

Gone.

You are now going to be auto-assigned to a Medicare prescription drug plan -- or if you're currently in a Medicare Advantage plan you may be auto-assigned into that plan.

Did any of you receive a yellow letter this week from the Department of Health and Human Services?

Did it tell you that this change is happening if you do nothing by December 31st [2005] it gave you the name of a plan you will be auto-assigned to?

[listening to audience]

It does say that, so you need to look but it's not easy to find.

In like the 5th paragraph on the bottom line but it'll give you the name of a plan that you have been auto-enrolled in by December 31st [2005] if you don't choose another.

You have the option to choose a plan.

But, if you don't, just so you don't get stuck out there with no coverage, they auto-enroll you into one of 9 plans that are accepting dual-eligibles.

They tend to have better drug coverage than some of the other plans.

Now, you have no deductibles, you have no premiums, and you have no donut hole.

Your coverage doesn't max out.

And you have $1 generic drugs, $3 brand-name drugs if they're covered on your plan's formulary.

It is critical for you to know whether your drugs are covered on your plan's formulary because you can change plans every month.

You are the only group that doesn't have an open enrollment just once a year.

And it's to protect people from getting into plans that don't cover their drugs.

You can change every month without any penalty.

But if you choose January 2nd to change your plan it doesn't go into effect until February 1st.

So you could be without for that period of time.

You will actually get coverage from the one you have till the end of the month but it may not cover your drugs.

Also you have the same appeal process.

If you go into a plan and they take a drug that you're on off their formulary but gosh it's the only drug that works for you, you can always appeal through your doctor to get that plan -- that drug covered.

Now another interesting trick you need to know.

We have been told that you can get a 90-day supply at your local pharmacy for the first time.

Medi-Cal never allowed that -- it was always 30-day.

And you're going to get that 90-day supply for the same $1 generic, $3 brand.

So make sure your doctor writes for a 90-day supply because you'll pay the same co-pay whether it's 30 days or 90 days.

That does not pertain to the rest of you.

The fact is you can get a 90-day supply starting in January but you'll pay 3 co-pays.

Everybody else can go to getting a 90-day supply at their local pharmacy through their prescription drug plan but you pay 3 co-pays.

Many of you need to check -- who are not Medi-Cal -- for your mail order options through your prescription drug plan because many of them cover 90-day supplies in mail order for 2 co-pays instead of 3.

So it's a way to save money if you're willing to use that.

Okay.

So, one thing I found out about dual-eligibles.

If you're auto-assigned to a plan, you see that that plan covers your drugs, because they give you a telephone number to call, you can call 'em and say, "Are my drugs covered?"

You need to say, "I accept, I want this plan" so you can get the packet sent to you with the drug card before January 1st [2006].

Because I have a very bad feeling that the mail's going out December 31st with your card and therefore you won't get your card to take to a pharmacy until the first week of January.

Let's talk about TRICARE and VA.

Real simple.

Do nothing.

Do nothing, do nothing, do nothing.

Your drug coverage is far better than Part D, however if you do choose a Part D plan, feel free to pay for it, it won't kick you out of the VA and TRICARE like the others will, but you don't need it.

You'll be paying a premium for something you don't need.

So you will not get a letter from the VA or TRICARE.

Just know your coverage is far better, okay?

If you do lose that benefit, you will not have to pay a penalty to join a Medicare Part D or C plan in the future.

Buyer beware.

Every plan is going to vary with monthly premiums, deductible, co-pays or co-insurance, generic versus brand, tier 1, tier 2, what's the injectable drug co-pay?

This is what's even covered.

Is there a coverage gap?

If so, is there any additional benefit to it?

These are things you would need to ask.

Let's talk about a couple of important dates.

2005 in October you obviously need your Medicare & You handbook.

110 pages of blah, blah blah, blah blah.

I shouldn't be so cynical but it's very difficult to get through these government-distributed books with any source of information coming back out of it that you can really glean from.

You got that, there's lots of community outreach, believe me you're going to see a lot of it, feel free go to as much as you want, you'll always learn something at the next one.

Medicare and the Medicare website are up and running now.

You can't sign up til Tuesday [November 15, 2005].

January 1st 2006: coverage begins if you signed up by December 31st [2005].

I'm not exactly sure how they know December 31st, how that all switches, but they guarantee it.

May 15th [2006] is your last day without a penalty.

And it's the last day in 2006 you can join.

Even if you want to join later, you can join November 15th and have it start the next January.

So if you join between November 15th and December 31st [2005], your coverage begins January 1st [2006].

If you join January 1st [2006] to May 15th [2006], your coverage begins the first day of the next month.

Join when you're first eligible to pay the lowest premium -- that's the key.

Is there anyone in here who believes that they are la-- first of all, that are not Medi-Cal?

Okay? Not Medi-Cal.

Who believes they're below a hundred -- you don't have to raise your hand -- who believes that they're below 150% of the poverty level.

That means you're one person who makes -- a 1-person household who makes less than $1,197 per month as an individual or $1,604 as a [married] couple.

And if you're an individual, you don't have assets worth more than $11,500.

If you're a [married] couple [living together], it's $23,000.

Included in those assets is everything except you're allowed to own a home, a car, and a burial plot.

Those don't factor into those bottom asset numbers, but if there's anyone here who believes they fit in this category, there is extra help for you.

And it's available on the Social Security website.

You won't have a donut hole, no coverage gap.

You will either have no premium or a $50 premium if the premium's 250.

And your drugs will cost a co-pay of $2 generic, $5 brand or -- if you're -- there's different permutations -- or 15% of the cost of the drug.

So it's a much better benefit, but you have to sign up on Social Security to get it.

Many of you got a letter this summer from Social Security saying you may be eligible, call us for an application.

Anyone with Medi-Cal or who has the state paying for their premiums?

Got a letter saying we already did this for you.

Probably threw the letter away.

Most people I know didn't read it.

Yep.

So, don't be embarrassed if you threw it away and didn't do anything with it and said, "I didn't know that that was going to get me anything."

Please go to the Social Security website ( www.socialsecurity.gov/prescriptionhelp ) and see if you qualify.

But if you have Medi-Cal already, you got it, you don't need to go there.

You've already been identified.

You're getting that extra help.

I'm going to tell you what information is important to have when you are going to these websites or these 800 numbers.

Your Medicare card.

Know your Medicare number and the date you enrolled is right on that Medicare number.

Right here, this is your effective date -- no one can read that, including me, [joking about the tiny text for EFFECTIVE DATE in the slide] that's important when you go to these websites.

The other thing you're going to need is your zip code 'cause you want to know what plans are in your area.

You can also search if the pharmacy you like to use is covered by your plan.

You're going to need your medicine list.

If you don't know your drugs, go to your pharmacy and ask them to print it for you.

And, if it's important that you keep your same pharmacy, know your pharmacy's zip code.

Because that's how you figure out if they're in your network on the computer.

You put in the zip code and it'll tell you if that pharmacy is covered under your prescription drug plan.

UCSF Osher Lifelong Learning Institute, Medicare Prescription Drug Coverage
Dialing You Into Medicare Part D
was presented by Marilyn Stebbins, PharmD
Clinical Professor of Pharmacy
UCSF School of Pharmacy
For more information: minimedicalschool.ucsf.edu
The view, contents and opinions expressed herein do not necessarily represent those of The University of California
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Copyright 2006 Regents of the University of California

Go To: Dialing You Into Medicare Part D