Benefits Brief
In this issue, I've decided to address the so-called "Medicare Drug Benefit." In terms of its effect on people with psychiatric disabilities, this is one of the worst pieces of legislation to come down the pike in a long time, and even though it doesn't go into effect until January of 2006, there are some important things you need to know, and some actions that you may need to take long before the law goes into effect. Of course, many things could change between now and January 2006, and the November election will have a great influence on the future of this legislation. Nonetheless, I think it's important that you realize the impact that this new law can have on you and your future ability to pay for your health care needs.
There are several different provisions that are important, and they will take
effect in stages. The first is the Drug Discount Card that is to become available
for eligible beneficiaries in May, 2005. These cards will be "sponsored"
by private companies, presumably insurance companies. There is no guarantee
that they will, in fact, be available in May or available everywhere.
Important 1st Stage Features:
· You are
not eligible for the card if you are on Medicaid
· Savings of 10%-25% on prescriptions expected
· There is a $30.00 annual enrollment fee for the card
· Low income people (your income must be under $12,124 for an individual,
or $16,363 for a couple) can apply for a $600.00 credit to be used towards
prescription expenses. This benefit will be available in 2004. If it is not
used entirely in 2004, you can carry the balance over into 2005. You can also
reapply for the card in 2005. In January 2005 applications will get full $600.00
for 2005. After that, the benefit will be pro-rated as this program ends in
12/05.
· Discount Card program ends on 12/31/05.
The actual Medicare Drug Benefit, which goes into effect in 2006, is really not a Medicare Drug Program at all, as it will be fully administered by insurance companies. And while facts and figures are being thrown out, which I outline below, the fact is that the law itself does not proscribe any of these figures. What it actually says is that the insurance companies have full decision making power over the amount of the premiums, the deductibles and which drugs will be covered. Furthermore, the legislation specifically prohibits the government from challenging insurance companies on their rates in any way, shape or form. In other words, this legislation has taken Medicare and made it a private insurance program, which will no longer be under the control of the government. So the figures I have provided below represent the best possible scenario and, even if they prove to be the figures established when the program goes into effect, they could conceivably change the next day and, as the legislation currently stands, the Office for Medicare and Medicaid would have no say in setting the new rates.
Another very important piece of this legislation is that if you are currently
a Medicaid recipient (MassHealth/CommonHealth in Massachusetts) and a Medicare
recipient, you will be mandated to transfer into one of the Medicare options
and can no longer get your medications through Medicaid.
The figures put out by the Bush administration are as follows:
· There will
be a monthly premium of approximately $35.00 per month.
· The General Plan consists of (annually):
o Subscriber pays the first $250.00 (Deductible)
o From $250.00 to $$2,250 in prescription costs, Medicare covers 75%, you
pay 25%.
o From $2,250 to $3,600 in prescription costs, you pay 100% of costs with
no contribution from Medicare.
o After $3,600, Medicare pays 95%, you pay 5%
o Formularies will be developed approving of certain medications, while disapproving
of others. If your doctor prescribes a different medication than that approved
of by the formulary, you can appeal to have that medication approved. If it
is not approved, you pay 100% out of your own pocket for it, and these expenses
will not count towards any out of pocket requirements (e.g. your deductible).
It should be noted that atypical antipsychotic medications and certain name-brand
psychiatric drugs are the most likely to be on the chopping block under these
formularies. Also, the formulary can change at any point, in order to eliminate
coverage for medications that were previously covered. Yet the consumer has
the option to change health insurance plans only once per year.
· If you currently have a Medigap program that includes a drug benefit (i.e. Medex, AARP), you must choose one or the other. You can keep your Medigap program and drop the drug benefit and be eligible for Medicare Prescription coverage, but you can't have both.
· After 2006, no Medigap programs will offer drug coverage, so Medicare
will be your only choice.
· There are penalty fees for signing up 'late' for Medicare coverage.
That is, if you decide to stay with your Medicap drug program and want to
switch to Medicare later, you will have to pay a penalty.
· In general, you're not allowed to have any supplemental insurance
to cover the gaps in this coverage.
· Under the new law you generally pay $5,100 per year out of pocket
before the 95% coverage kicks in (per year).
· 14 billion dollars in subsidies will be provided to employers to
encourage them to maintain coverage on retiring individuals they've employed.
· Effective in 2006, Medicare premiums will jump to $100.00 (an almost
100% increase from the current premium amount) and these premiums will then
continue to increase in cost each year thereafter.
· Effective in 2007, Medicare premiums for individuals earning over
$80.000 and couples earning $160,000 will be pro-rated higher than the general
population for Part B coverage (no specific figures or percentages have yet
been provided on this provision of the law).
Low Income People:
· Get breaks in their deductibles and will also have coverage during
gap available
· A person eligible for Medicaid AND below 100% of Federal Poverty
Limits gets (2006 figures):
o Full premium subsidy
o Full subsidy of deductible
o No gap in coverage
o Minimal co-pays
· People with annual incomes of $9,630 (Individuals) or $13,000 (couples),
are eligible for Medicare AND Medicaid:
o Full premium subsidy
o Full subsidy of deductible
o No gap in coverage
o $1.00 for generic medication/$3.00 for brand name (for 30-day prescription)
· People with annual incomes of $13,000 (Individuals) or $17,550 (couples),
with assets worth under $6,000 (Ind.) and $9,000 (Couples) will receive:
o Full premium subsidy
o Full subsidy of deductible
o No gap in coverage
o $2.00 for generic medication/$5.00 for brand name (for 30-day prescription)
· People with an annual income of $13,000 (Individuals) or $17,550
(couples), with assets under $10,000 (Ind.) and $20,000 (Couples) are eligible
for:
o Full premium subsidy
o $50.00 deductible
o No gap in coverage
o 15% co-pay on all medications. (for 30-day prescription)
Homes, most cars, buriel plots and some insurance policies will not be considered assets. The assets test is a bit more generous than that used by the current SSI rules, but, nonetheless under the new law, 1.8 million low-income people will be denied insurance subsidies due to their "excessive" assets.
The figures for low-income people are much lower than those allowed for some
of today's Medicaid categories, so many people who are now eligible for Medicaid
will not be eligible for any of the low-income provisions in the new Medicare
drug program.
If Bush is re-elected, hence assuring that the legislation will stay in place,
recipients who currently receive Medicaid and Medicare, who will not be eligible
for the low-income provisions of the new law should consider enrolling in
a Medigap program in 2005 . Unfortunately, medigap is very costly and many
will not be able to pay for this option. If this is an option for you, it
is important to note that both Medex (in Massachusetts) and AARP have open
enrollment periods in February and March, meaning that you must enroll during
that time period. For people considering this option, you would have to enroll
in February/March 2005. After Feb/March 2005, under the provisions of the
new Medicare legislation, the Medigap programs will not be able to offer a
drug benefit with their policies.
Medex is the only program offered in Massachusetts that doesn't work on a
strict formulary, which allows you to get whatever medications your doctor
prescribesUnfortunately, the price of Medex is nearly $500 per MONTH !!
I will provide updates on this terrible situation as they become available.
If ever your vote and letters to your legislators was important, this is that
time. This law and its new "benefit" will have very detrimental
effects on millions of people. There will be ugly consequences for lots of
low income people, both those with and without psychiatric disabilities.
New Social Security regulations were adopted and went into effect on January
22, 2004 that allow wage garnishment for recovery of overpayments when individuals
have returned to the workforce and stopped receiving Social Security (SSI
or SSDI) benefits. These regulations allow the Social Security Administration
(SSA) to require employers to garnish pay to recover SSI and SSDI benefit
overpayments, after certain procedural steps have been taken.
Wage garnishing will NOT be used when the individual:
1) Is working and
not getting SSDI checks, but is still in the Extended Period of Eligibility;
2) Is working and not getting SSDI checks, but still in the timeframe of the
Medicare Extension (7 1/2 years beyond the end of the Trial Work Period)
3) When the recipient is "using" a Ticket to Work.
Besides these exceptions, SSA can utilize the Administrative Wage Garnishment (AWG) when:
1) the debt (overpayment)
is past due
2) SSA has completed its billing system, including an initial notice, a reminder
and a past-due notice
3) The individual is no longer receiving benefits
4) The individual has not made an installment payment agreement or has missed
two consecutive payments
5) The individual has not requested an appeal (Request for Reconsideration)
or waiver of the overpayment
6) The individual has requested an appeal or waiver, but they have been denied.
Before implementing a garnishing process, SSA must send the individual 60 days advance notice. Within the 60 days, the individual will have the opportunity to review his/her file and the cause of the overpayment and resolve any issues (i.e. don't owe the money), and can request a waiver if he/she has not done so previously.
If an AWG order is processed, the employer must deduct 15% of your "disposable
pay" which is your NET pay minus any payment for health premiums.
Another Important Note: If you are a class member of the lawsuit against Household
Finance (for unfair and deceptive lending practices), you will be receiving
a settlement check soon. Social Security has stated that they will not count
the income against SSI recipients for the month the check is received. However,
if it raises your assets above the $2,000 limit for individuals and $4,000
limit for a couple in any of the following months, you will be considered
as having excess resources and not receive your SSI check for that month.
So, if you're one of the lucky beneficiaries of this lawsuit, you need to
evaluate your options when you get the check.