November 12, 2009

Medicare Annual Enrollment Starts November 15, 2009:
Think carefully About Coverage and Options

The Annual Coordinated Election Period for Medicare Advantage and Medicare Part D drug coverage starts November 15, 2009 and goes through December 31, 2009.  During this period, Medicare beneficiaries who do not have a Part D plan can enroll in one, and those who do have Part D coverage can change plans. Beneficiaries can also return to traditional Medicare from a Medicare Advantage plan, enroll in a Medicare Advantage plan, or change Medicare Advantage plans. Beneficiaries who take no action will remain in their current plan, with some exceptions for those who receive the Low-Income Subsidy (LIS) or who are in plans that are terminating their Medicare contract.[1]  However, since Part D plans can change their formularies (list of covered drugs), tiers, utilization management tools, exceptions and appeals processes, and other aspects of their Part D plans, and Medicare Advantage plans can change their entire benefit package and provider network, even beneficiaries who were satisfied with their plan in 2009 need to review their options for 2010.

Multiple sources and large quantities of information will be available to beneficiaries about their options for 2010.  While beneficiaries can begin enrolling in or changing plans November 15, they do not have to make a decision until December 31, 2009, and in fact may purposely choose to wait in order to make the most informed decision possible.  The Centers for Medicare & Medicaid Services (CMS) has advised beneficiaries to enroll before the end of the enrollment period to avoid delays in getting evidence of their enrollment in their new plan.

Every person with Medicare can be affected by changes to their drug and other health coverage for 2010 and should therefore review his or her options. 

Part D prescription drug plans can make changes to their benefit package for 2010, including changes in covered drugs, utilization management tools, and premiums. The Center has described many of the changes in a previous Weekly Alert.[2] All Medicare beneficiaries should reevaluate their options for 2010, even if they were satisfied with their plan in 2009.

Part C Medicare Advantage (MA) plans can also make changes to their benefit package in 2010.  According to the Kaiser Family Foundation, the average premium for all plans that are available to beneficiaries, without regard to enrollment choices, will increase by 8 percent in 2010.  The average weighted premium, meaning the premium enrollees will pay if they remain in the same plan in 2010, will increase by 32 percent. If beneficiaries remain in the same plan, fewer will be in $0 premium plans, 43 percent in 2010 as compared to 50 percent in 2009.[3]

Although the number of Medicare Advantage plans with prescription drug coverage (MA-PDs) that will offer some coverage of brand name drugs in the donut hole coverage gap will increase in 2010, the number of MA-PDs that will offer coverage of all brand name and generic formulary drugs in the coverage gap has declined. Local HMOs serving counties in California, Florida, Louisiana, Nevada, New York, and Texas are the most likely to cover more than 10 percent of formulary brand name drugs in the coverage gap in 2010.  Nationwide, fewer MA-PDs will offer coverage of all generic drugs in the coverage gap, 7 percent in 2010 as compared to 25 percent in 2009.[4]

In addition to the changes to premiums and drug coverage described above, Medicare Advantage plans can increase cost sharing, change the way the plan's out-of-pocket limit is calculated, and change the doctors and hospitals that contract with the plan.  Even HMOs and other Medicare Advantage plans that have been serving Medicare beneficiaries for a long time are making changes. 

Again, it is imperative that all Medicare Advantage enrollees review their plan's network and cost-sharing for 2010.

Factors to consider when renewing membership in a Medicare Part D prescription drug plan or choosing a new prescription drug plan:

• The amount of the monthly premium
   

• Whether enrollees in the plan who are eligible for the Low-Income Subsidy (LIS or "Extra Help") will have to pay a portion of their premium
   

• If the plan was a Low-Income Subsidy plan in 2009,

• Whether it will remain a Low-Income Subsidy plan in 2010

• If not, the amount of premium people eligible for the full extra help will have to pay
   

• Whether the plan formulary includes or continues to include:

• The particular drugs needed by the Medicare beneficiary

• The strengths, packaging, and dosages of the drugs needed by the beneficiary

• The number of days covered in each prescription (Example: 30, 60, 90 days)
   

• The plan's utilization management tools 

• Whether utilization management tools have been added to drugs that were on the formulary in 2009        

• The prior authorization requirements (Requirement that plan approve prescription for a formulary drug before it will cover or pay for the medication.)

• Whether the plan requires step therapy (Requirement that certain medication(s) be tried before that prescribed by the beneficiary's physician)

• Whether the plan uses tiered cost sharing (Different co-pays for generics, brands, or for specific drugs)

• The number of tiers

• The co-payments/co-insurance per tier

• The placement of the drug on a specialty tier for costly drugs; specialty tiers often require large cost sharing

• Whether the plan offers therapeutic substitutions

• Whether there are quantity limitations

• On number of prescriptions in a month

• On number of pills in a prescription

• On dosage strength
   

• If the beneficiary received an exception from the plan in 2009 to cover a drug that is not on the formulary, by-pass utilization management requirements, or to reduce the beneficiary's cost-sharing:

• Whether the plan will honor the exception in 2010 and continue to cover the drug, and what the beneficiary has to do to make sure coverage will continue

• Whether the beneficiary must file a new exception request for 2010, when can the new exception request be filed, and what is the process for doing so

• Whether another plan includes the drug on its formulary so the beneficiary does not need to request an exception
   

• If the plan provides coverage for drugs in the "Donut Hole" or coverage gap

• If coverage is provided, are all formulary drugs covered or are only some drugs covered?

• If coverage is limited to a category of drugs, such as generic drugs, are the enrollee's drugs among those that are covered?

• If coverage is provided, are the cost-sharing requirements higher?
   

• Whether the pharmacies in the plan's network include:

• The pharmacies used by the beneficiary

• The pharmacy used by the long-term care facility in which the beneficiary resides
    

• Whether there are price differentials among pharmacies in the network
   

• Whether mail-order is allowed or required

• The price differential for mail order, including whether mail order drugs cost more

• The number of days covered in each prescription (Example: 30, 60, 90 days)
   

• Whether the plan offers supplemental benefits

• Coverage in the donut hole

• Coverage for generic drugs only

• Coverage for generic and brand name drug
   

• How the plan coordinates with a State Pharmaceutical Assistance Program that may be available in the state.  See http://www.medicare.gov/spap.asp for an up-to-date list of SPAPs that work with Medicare Part D)
   

• Who is the plan sponsor?  Has the entity been in the community for a while?  Is it reliable?
   

• The "Transition" process used by the plan (Temporary use of drug not covered by plan)
   

• Whether the individual has other insurance that covers prescription drugs

• Through a Medicare HMO or other Medicare Advantage plan.  If so, the individual must keep getting drug coverage through that plan if she wants to stay in that plan

• Through a retiree health plan.  If so, has the former employer told the individual whether the insurance is as good as or better than Medicare's coverage (i.e., "creditable coverage) for 2010?  If it is creditable coverage, the individual may stay in that plan without getting a late penalty on the premium if he or she later decides to change to a Medicare drug plan.

• Employers may change the coverage they provide. Drug coverage that was creditable in 2009 may not be creditable in 2010.  Some employers that offered creditable drug coverage in 2009 may want retirees to enroll in a Part D plan in 20108, and will subsidize some Part D costs.

• Individuals with coverage through the Veteran's Administration, TRICARE, Federal Health Employee Benefit Plan, Railroad Retirement Board, Program All-Inclusive Care for the Elderly (PACE), or Indian Health Service, may continue receiving prescription drug coverage through one of those plans if that coverage is as good as what is offered from Medicare prescription drug coverage.

Additional factors to consider when considering enrolling in or renewing enrollment in a Medicare Advantage plan:

• The amount of the monthly premium
   

• The cost sharing for doctor visits

• If the plan charges a flat amount such as $25 per visit to a specialist, is this amount more or less than the 20% cost sharing under traditional Medicare?

• If the plan is a preferred provider organization (PPO), will the enrollee pay more than traditional Medicare to see a non-preferred doctor?
   

• How does the plan's cost-sharing (including out-of-network cost-sharing in a PPO) compare to the cost sharing under traditional Medicare for

• Hospital care,

• Skilled nursing facility care,

• Home health care,

• Durable medical equipment (DME),

• Part B drugs (including cancer drugs)
   

• If the plan includes a cap on out-of-pocket spending, are there services such as skilled nursing facility care or payment for cancer drugs that are excluded from the cap, so that there is no limit on the amount an enrollee might spend?
   

• Are the doctors, hospitals, and other health care providers the enrollee uses or might expect to use in an emergency

  • Part of the Medicare Advantage plan's network of providers if the plan is an HMO or PPO;

  • Willing to accept payment under the plan for all services if the plan is a private fee-for-service (PFFS) plan.
     

• Does the plan require a beneficiary or doctor to seek prior authorization or prior approval before covering or paying for an item, service or procedure?  Will the beneficiary have to pay more if he or she does not let the plan know in advance of obtaining an item, service, or procedure?
   

• If the plan provides extra benefits such as vision or hearing benefits, are there limitations on the benefit, such as dollar caps on the cost of eyeglasses and hearing aids?
   

• If the plan provides extra benefits such as health club membership or bicycle helmets, are these benefits of value to the enrollee?

For more information, contact attorney Vicki Gottlich (vgottlich@medicareadvocacy.org) in the Center for Medicare Advocacy's Washington, DC office at (202) 216-0028.

Copyright © 2010 Center for Medicare Advocacy, Inc.