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 On December 8, 2003 Congress started the ball rolling on a comprehensive Medicare prescription drug program, with the latest addition known as Medicare Part D, which was aimed at providing Medicare recipients with prescription drug insurance. This move came as a result of research findings indicating that Medicare beneficiaries that did not have outpatient prescription drug insurance paid as much as 20% more than patients with insurance coverage. These benefits were introduced as what is termed the Medicare Modernization Act.
Medicare Prescription Drug Discount Card
Starting in May 2004, Medicare beneficiaries without prescription drug coverage have an opportunity to apply for a Medicare prescription drug discount card. Those cards were first distributed in June 2004. It is hoped that the discount card will allow individuals to save between 10 and 15 percent on their annual prescription drug spend, with discounts ranging up to 25% off the cash price of individual drugs.
These discount drug cards were not intended to provide a true prescription drug insurance benefit to individuals, rather the intention was to provide for a discount program until a more comprehensive program could be introduced in January 2006 - Medicare Part D.
$600 Prescription Drug Assistance Program
Benefits starting in 2004 also included $600 in additional benefits in 2004 and 2005 to individuals with income levels below 135% of the poverty line. In 2003, this poverty line stood at $12,123 for single individuals and $16,362 for married individuals. The $600 in funds was made available to participants in the prescription drug discount card program.
The Centers for Medicare and Medicaid Services provides oversees the administration of the assistance program and the discount card. Private sector discount card programs must meet the standard set by Medicare and can charge an enrollment fee of $30 per year. Beneficiaries eligible for the $600 in assistance will have any discount drug enrollment fee paid for by Medicare.
Medicare Eligibility and Enrollment
You're eligible for the discount drug card if you are enrolled under Medicare Part A or Medicare Part B. If you are receiving outpatient drug benefits through Medicaid (including 1115 waivers), then you are not eligible for prescription drug discount program.
To enroll in the program, you must first select the discount program that you believe best meets your needs. Medicare will ensure that beneficiaries have at least two choices in each State. To enroll in the $600 assistance program, the beneficiary must provide income documentation as proof that they meet the poverty line test mentioned above. Eligibility and Enrollment questions can be answered by calling 1-800-MEDICARE.
Prescription Drug Coverage
Almost any prescription drug that can be purchased at a retail pharmacy is covered under the discount plan and $600 in assistance. This would also include syringes and other medical supplies associated with the injection of insulin. To provide participants with significant discounts, it is very likely that coverage providers will provide a specific list of drugs, also known as a formulary, from which the participant will choose.
If a discount program uses a formulary, then Medicare requires the program to offer discounts on the drugs most commonly used by Medicare participants. Typically, this would include discounts on more than 200 classes of drugs.
Discount card programs can optionally provide discount coverage on over the counter medications or drugs. The $600 in assistance, however, cannot be used to purchase these over the counter drugs.
Pharmacy Networks
A state is the smallest service area or network geography that is permitted in the Medicare prescription drug program. This means that the pharmacy network has to be at least the size of the state in which it is offered. Minimum requirements for these networks also include:
- For urban areas, 90% of Medicare participants must live within 2 miles of a network pharmacy.
- In areas of the country considered suburban, 90% of Medicare participants must live within 5 miles of a network pharmacy.
- Finally for rural areas, 70% of Medicare beneficiaries or participants must live within 15 miles of a network pharmacy.
Prescription Drug Program Privacy
Approved discount prescription drug programs are required to comply with all HIPAA privacy provisions. A participant's protected health information or PHI can only be used for the health care operations and in the marketing of products and services that are within the scope of this particular Medicare endorsement.
Medicare Part D
Starting in January 2006, everyone with Medicare, regardless of income, health status, or prescription drug usage, now has access to prescription drug coverage. Medicare Part D covers both brand-name and generic prescription drugs at participating pharmacies.
Medicare Part D Open Enrollment
Open enrollment for Medicare Part D begins around November 15th of each year and extends to December 31st. But the sooner you choose an insurance carrier, the more certain you'll be that benefits will flow smoothly in January.
You can enroll in a Medicare prescription drug program in one of several ways including:
- By joining a Medicare prescription drug plan.
- By joining a Medicare Advantage Plan.
- Or enrolling in a Medicare Health Plan that offers drug coverage.
Medicare Part D Premiums
The prescription drug insurance offered under Medicare Part D does come at a cost. Monthly insurance premiums as well as deductibles, copayments and coinsurance costs will vary depending on the plan you choose. You can find a Medicare approved insurance provider by visiting the Medicare website.
And while some prescription plans may offer additional coverage, this benefit usually comes with a higher monthly premium. Qualifying individuals may not have to pay premiums or deductibles; however, you need to contact Social Security at its toll free telephone number 1-800-772-1213 (TTY 1-800-325-0778) to find out if you qualify.
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