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Medicare Part D: How Can You Assist Seniors in Your Life? Iowa Actuaries Club February 28, 2006 Tim Jongerius, FSA, MAAA Sr. Actuary Wellmark Blue Cross Blue Shield of Iowa
,Medicare Part D Program Effective 1/1/2006 Created by Medicare Modernization Act (MMA) of 2003
Features of Medicare Part D Program include… Drug coverage on either stand alone basis (PDP), or when purchasing a Medicare PPO product (PD or MA-PD)
US divided into 34 PDP regions Minimum standard benefit design prescribed ,Regions Map ,Standard Coverage MMA defines a minimum benefit design
Member pays… $250 deductible first
25% of next $2,000 (i.e., yearly drug costs from $250 to $2,250) 100% of next $2,850 At this point, member has paid $3,600 in out-of-pocket costs (TrOOP) Beyond $3,600 in TrOOP (or $5,100 in drug costs), member pays 5% of drug costs (or small copayments) ,More Features of Part D- Coverage Beyond Standard Coverage Benefit design can be richer than standard coverage
Some designs eliminate $250 deductible Some designs provide benefits in the “coverage gap” ,More Features of Part D – Financial Aspects Member Elements
May pay penalty if don’t enroll by May 15, 2006
Premium assistance and cost-sharing assistance for low income members and dual-eligibles Industry Elements Risk-adjusted payments from CMS to carriers
Risk-sharing components Overall risk corridors (±2.5% of expected claims, government has 75% share; ±5.0%, government has 80% share)
Low income subsidy (LIS) support for premium and cost-sharing Reinsurance payments for catastrophic claims ,Products Offered in Region 25 Includes contracts/plans approved as of November 13, 2005. The data does not reflect information for PACE organizations, Employer sponsored plans, or plans that were not approved by the 'As of' date of the chart. 1 The beneficiary drug premium covers prescription drugs only and does not cover medical or hospital benefits. Beneficiaries are also responsible for their Part B premium and any premiums for Medigap coverage to meet their individual needs. 2 Formulary data as of November 16, 2005.
,CMS Enrollment as of 2/11/2006– Nationwide 42 – 43 million Medicare beneficiaries
25 million beneficiaries with drug coverage
5.3 million voluntary sign ups
Approximately 10 million on employer coverage Approximately 10 million from others who already had drug coverage (duals and MA) ,CMS Enrollment as of 2/11/2006– Region 25 ,Initial Operational Results IT/file issues with moving so many people at one date (1/1/2006)
Accretion process Some states have stepped in to cover drug costs as a result of enrollment issues ,How to Help the Seniors in Your Life? Use the internet to get information
Agents of carriers which offer drug plans Public assistance ,Use the Internet First and foremost, go to the CMS website…”www.medicare.gov/pdphome.asp”
Select “Medicare Prescription Drug Finder”
5 steps within the site search options
current coverage information review plan results and options medication and pharmacy selection review plan details and enroll Also, refer to specific company’s website ,Case Studies
,Items Needed Drugs used in calendar year 2005
Dosage Quantity Costs of drugs Canadian drugs used? ,Case Study #1“Mr. X” – Low/Moderate Drug User ,Case Study #2“Mrs. X” – Moderate/High Drug User ,Case Study #1 Results ,Case Study #2 Results ,Other Sources of Assistance- Agents Note: need to be sure most appropriate comparison is being done
,Other Sources of Assistance- Public Federal
Website: www.medicare.gov
Publication: “Medicare & You” booklet Phone: 1-800-Medicare (1-800-633-4227) … available 24/7 State Senior Health Insurance Information Program (SHIIP) at www.shiip.state.ia.us … Select “Drug Assistance”
Talk to your Pharmacist ,Notes and Comments to Consider Remember insurance aspect of decision
Try to sign up before 15th of month Penalt