FILLING THE GAPS IN MEDICARE PART D

A Survey of Federal, State and Private Programs to Provide Prescription Drug Assistance

Due to the recent economic downturn, millions of Americans are looking for ways to cut costs.  Unfortunately, some have been forced to make the choice between their prescription medications and other essentials.  One recent survey found that one American in five has gone without medications, split pills or skipped doses in an effort to save money; in doing so, they may be  risking their health, and possibly, their lives.[1]  These risks may be unnecessary, as there are hundreds of programs that offer assistance with paying for drugs through direct subsidies, discounted costs or provision of free medications. This discussion is primarily about programs that assist Medicare beneficiaries to supplement their Part D coverage in various ways, but some of the programs discussed are not limited to individuals with Medicare Part D.

• Most recent income tax return and, if employed, recent pay stubs

• If unemployed, a letter or other document from former employer stating that you have been terminated and your health insurance has stopped

• Bank statements from several recent months

• Statements regarding any investments

• Information on accumulated medical debt, which may affect eligibility

The resources listed below include programs that can act as a supplement to Medicare Part D, and some that operate independent of Part D.  The monetary value of assistance provided by programs that operate independently of the Part D drug benefit cannot count toward out-of-pocket costs for Part D; in other words, assistance from independent programs will not count toward meeting the deductible or the initial coverage limit, or to getting through the donut hole to be entitled to catastrophic coverage.[2]

I.  Part D Low Income Subsidy

The most direct assistance for Medicare beneficiaries with prescription drug costs is the Low Income Subsidy (LIS).  The LIS has a “full” subsidy and a “partial” subsidy.  The former is available for individuals with incomes up to 135% of federal poverty levels (FPL) ($1,218.38/individual/month; $1,639.13/couple/month) and countable assets of not more than  $8,100/individual and $12,910/couple.  Those with the full subsidy have no premium in benchmark plans, no deductible, no coverage gap and pay co-payments of $2.40/generics and $6.00/brand names.  They pay no copayments after reaching the catastrophic threshold.  Partial subsidy enrollees cannot have incomes of more than 150% FPL ($1,353.75/individual/month; $1,821.25/couple/month and countable assets of not more  than $12,510/individual or $25,010/couple.  Individuals with partial subsidy have an annual deductible of $60  and pay co-insurance of 15%, have no coverage gap and pay co-payments of $2.40/generics and $6/brand names after they reach the catastrophic threshold.

Individuals receiving Supplemental Security Income, Medicare Savings Programs or Medicaid are entitled to the LIS without applying.  The  latter two programs are available through state Medicaid agencies,  the former through the Social Security Administration.  Those individuals with full Medicaid who are residing in certain institutions have no co-payment requirement; others with full Medicaid and whose incomes are below 100 percent FPL pay co-payments of $1.10/generic and $3.20/brand names.

All numbers are for 2009; all are indexed annually.

II. Incurred Medical Expense Deduction: Help for Some Medicaid Beneficiaries

Medicaid beneficiaries who live in nursing homes or in assisted living facilities under a home and community-based waiver are ordinarily required to pay most of their income to the facility as their “share of cost.”  Nonetheless, a provision in the Medicaid law allows Medicaid beneficiaries to deduct the costs of certain medical expenses from the amount they must pay for their nursing home or assisted living facility stay.  When a beneficiary uses this “incurred medical expense deduction,” the state Medicaid agency makes up the lost amount in its own payment to the nursing home or assisted living facility.  The provider gets the same Medicaid rate that it would have gotten if the beneficiary had not used the deduction, but more of the rate is paid by the state, and less by the beneficiary.

In calculating a Medicaid beneficiary’s share of cost for a nursing home or assisted living stay, the Medicaid law requires states to allow a beneficiary to pay for health insurance premiums, deductibles, and coinsurance, without any limitations on those payments.  It also allows a beneficiary to deduct the costs of medical services that are recognized by state law but not covered by the state’s Medicaid plan.  The deduction has most often been used by beneficiaries to pay for prescription drugs, eyeglasses, hearing aids, and dentures that their state has not included in its Medicaid program or that exceed the state’s coverage.  The deduction is also useful for getting prescription drugs that are not covered by a resident’s Part D drug plan or that are excluded from Part D altogether.

Use of the Incurred Medical Expense Deduction

Non-Formulary Drugs:

 

Each Part D plan identifies in its formulary the drugs that it will cover for plan members.  If a physician determines that the nursing facility or long-term care beneficiary needs a particular drug that is not included in the formulary of the beneficiary’s plan, the resident may file for an exception so that the Plan will pay for that drug for that beneficiary.  If the beneficiary does not persuade the Plan that the non-formulary drug is “medically necessary,” the beneficiary may file an appeal.  The beneficiary can use the medical expense deduction while using both the exceptions and appeals processes.

 

In addition, if the beneficiary loses both the exception and the appeal, and the physician continues to believe that the non-covered drug is medically necessary and to prescribe it, the beneficiary can use the medical expense deduction to purchase the drug.

 

Excluded Drugs:

 

The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) excludes certain drugs from coverage by Part D plans.  Medicaid programs can cover these excluded drugs, but are not required to cover them. A beneficiary who is prescribed an excluded drug that the state Medicaid program does not cover may use the incurred medical expense deduction to purchase the drug.

Paying Premiums for a More Comprehensive Part D Plan

The incurred medical expense deduction may also be used to pay premiums for a more comprehensive Part D plan. Beneficiaries who are dually eligible for Medicare and Medicaid are randomly and automatically assigned to low-cost Part D plans called benchmark plans.  Beneficiaries can use some of their income to pay premiums for a more comprehensive Part D plan – for example, a prescription drug plan providing enhanced alternative coverage – that covers drugs that are otherwise excluded from the standard benchmark plans. 

Paying Co-Payments During the First Month in the Nursing Home as a Medicaid Beneficiary

Although nursing home residents (but not beneficiaries receiving services in the community) do not have to pay co-payments for their prescription drugs, the exemption from co-payments does not begin until the beneficiary has been institutionalized in a nursing facility for a full calendar month as a Medicaid beneficiary.  The delayed exemption means that a beneficiary who is admitted to a nursing facility as a Medicaid beneficiary on June 3, for example, will be charged co-payments until August 1.  If the beneficiary is admitted on June 3 as a Medicare beneficiary and Medicare pays for his or her care until July 3, when Medicaid begins to pay for the stay, the beneficiary will be charged co-payments from July 3 until September 1.  The Centers for Medicare & Medicaid Services (CMS) recognizes that such beneficiaries can use their incurred medical expense deduction to pay the co-payments.  Question ID 7042 (Apr. 20, 2006).

Eligibility For the Incurred Medical Expense Deduction

The incurred medical expense deduction is available only to Medicaid beneficiaries who have income such as Social Security or a private pension that they use to contribute to the cost of their long-term care in the nursing home or assisted living facility.  If their only income is SSI, they have no income to protect for non-covered medical care expenses and cannot use this deduction.  Most nursing home residents are medically needy Medicaid beneficiaries and have income to use for the incurred medical expense deduction.

How Beneficiaries Can Use This Deduction

After determining that an individual is financially eligible for Medicaid, a state makes a second “post-eligibility” determination to calculate the amount of money the person must contribute to the cost of care.   The Medicaid law establishes a mandatory deduction for “incurred expenses for medical or remedial care,” including health insurance premiums and expenses for services recognized by state law but not covered by the state plan.

States may use either the actual expenses incurred by a beneficiary or expenses that are projected for a period of no more than six months.  While a state may set reasonable limits on these medical expenses, it may not set overall dollar limits (such as $50 per month) nor may it impose a limit on the number of services or items that the beneficiary could deduct each month (such as a maximum of three drugs).  States may not set any limits on the health insurance premiums, deductibles, or coinsurance charges.

If a state has failed to implement, or has improperly implemented, the incurred medical expense deduction, advocates may negotiate with the state about the deduction or, if negotiations fail, may consider litigation to ensure that the deduction is available. 

III. Pharmacy and Retailer Prescription Drug Discount Programs

Discount drug cards offered through chain pharmacies for a small monthly premium provide discounts on a number of services, including prescription drugs.  Individuals with a Part D plan may use a discount card, but the two drug programs operate independently of one another.  That is, drug card discounts cannot be applied to Part D prices or to Part D copayments, nor can the cost of drugs purchased using a discount card be applied toward Part D out-of-pocket costs.  Discount cards may be useful for the purchase of drugs that are excluded by Part D, or for individuals who have reached the donut hole but will not have sufficient drug costs to reach catastrophic coverage.  Discount cards also provide discounts on services or supplies not covered by Medicare, such as those relating to vision and dental.  The utility of these cards depends on each individual’s situation and will likely require detailed calculations of costs and savings. 

This list is not exhaustive.  Some chains such as Walgreens (www.walgreens.com) and Rite Aid (www.riteaid.com) have links to discount cards sponsored by pharmaceutical companies or to discount websites, and therefore have not been included in this list.

1. Eckerd Health Care Discount Plan

The Eckerd health care Discount Plan is a low-cost discount membership program offering savings on health services such as prescription drugs, vision, hearing, podiatric, and chiropractic care.  Simply show your discount card at provider locations and the discount will be applied when the products or services are received.  A description of this plan can be found at www.eckerddiscountplan.com.

Eligibility

• One membership covers an entire family. The membership also covers any dependents of the member living away from home.

Discounts

• Dental: Eckerd offers discounts on many dental care procedures including 15-50% off the national average price for preventative and diagnostic care and a minimum of 15% off providers’ regular fees for all other procedures.

• Pharmacy: Eckerd offers up to 30% off regular retail prices for most prescription drugs. Mail order services also can be discounted.

• Vision: Discounts off eye examinations, eyeglasses, even sunglasses are available from JCPenney Optical Centers on a fee schedule. Other providers offer discounts of up to 20% off exams, lenses, frames and contacts.  You may also receive discounts of up to 75% on all kinds of contact lenses through LensDirect mail order service.

• Hearing: Eckerd offers discounts of up to 20% through a network of audiologists throughout the U.S.

• Podiatric: Eckerd offers discounts of up to 50% through a network of podiatric specialists.

• Chiropractic: Eckerd offers discounts of up to 50% through a network of licensed chiropractors.

2. CVS Pharmacy Health Savings Pass Program

The CVS Pharmacy Health Savings Pass Program is a discount membership program that provides savings on prescriptions.  The membership also entitles the member to 10% off regularly priced MinuteClinic health services or screenings, except in Florida.  A description of this plan can be found at www.cvshealthpass.com.

Eligibility

• An established membership fee must be paid when signing up for the program. A membership is not transferable and can be used only by the original member.  A member must present a membership card at the time a purchase is made.

Discounts

• Pharmacy: A $9.99 flat rate for 90 day prescriptions on over 400 generic drugs.  You may not use other insurance, including Medicare Part D, in conjunction with the CVS Health Savings Pass on the same medication prescription.  You may use the CVS Health Savings Pass once you reach the Medicare Part D coverage gap until you reach catastrophic coverage limits.

IV. Pharmaceutical Company Prescription Drug Discount Programs (Patient Assistance Programs, or PAPs)

PAPs operating outside of Medicare Part D that offer free or reduced-cost prescription drugs - mostly to persons with low incomes and no insurance - may still be able to offer assistance to Medicare Part D enrollees.  Assistance from PAPs does not count toward Medicare Part D out-of-pocket costs (i.e. toward meeting the deductible, initial coverage limit, and catastrophic coverage).  PAPs usually require patients to apply for and be rejected by all other available public assistance as a condition of eligibility, including the Part D low-income subsidy.   For more on how PAPs interact with Medicare Part D, read our Weekly Alert (AlertPDFs\2006\06_05.04.PAPs.pdf).

This is not an exhaustive list. 

1. Schering-Plough

Schering-Plough offers two patient assistance programs that are available to Part D enrollees: Commitment to Care, which offers free outpatient prescription drugs for cancer and hepatitis, and SP-Cares, which offers allergy, asthma, dermatology and cardiovascular prescription drugs.

Eligibility

• Commitment to Care: Provides assistance to U.S. residents with cancer or hepatitis with incomes below 325% of Federal poverty (or 340% in some areas). Medicare beneficiaries must meet an additional test requiring that their prescription drug expenses exceed 3% of their annual household income. Applicants may be enrolled in a Part D plan.  Those who do not must prove that they are unable to find an affordable plan. Beneficiaries are also required to apply to, and be rejected by, the low-income subsidy.

• SP-Cares: Provides assistance with allergy, asthma, dermatology and cardiovascular prescription drugs to U.S. residents with incomes below of 250% of Federal poverty.  Medicare beneficiaries must meet an additional test requiring that their prescription drug expenses have exceeded 2% of their annual household income so far this year.  Applicants may be enrolled in a Part D plan.  Those who do not must prove that they are unable to find an affordable plan. Beneficiaries are also required to apply to, and be rejected by, the low-income subsidy.

Discount

• Commitment to Care: Free Schering-Plough medication for remainder of year after recipients meets 3% out-of-pocket requirement.  Confirmation by phone of eligibility after 6 months.  Full reevaluation of eligibility every year.

• SP-Cares: Free 3-month supply of medication, sent to the ordering physician.  Physician must renew request for a new 3-month supply.  Full reevaluation of eligibility every year.

More information on Schering-Plough’s patient assistance programs can be found at http://www.schering-plough.com/schering_plough/pc/patient_programs.jsp.  Information about how Medicare beneficiaries can obtain drug assistance through these patients assistance programs, see http://www.schering-plough.com/schering_plough/news/release.jsp?releaseID=844149. 

2. Merck

Merck provides 26 of its drugs for free to qualifying individuals, through several different assistance programs.

Eligibility

• Assistance is available to U.S. residents with incomes of $43,320 or less for individuals, $58,280 or less for couples, or $88,200 or less for a family of four in the continental United States.  Medicare beneficiaries who elect not to enroll in a Part D plan are eligible.  Beneficiaries enrolled in a Part D plan who have extraordinary financial and medical circumstances may also qualify.

Discount

• Free 90-day supply of up to 3 Merck medications (of those offered through their programs), with a maximum of 3 refills.  Full reapplication is required every 12 months.

More information on Merck’s patient assistance programs can be found at http://www.merckhelps.com/patientassistance/.  For information about how Medicare beneficiaries can obtain drug assistance through these patients assistance programs, see http://www.merck.com/newsroom/press_releases/corporate/2006_0302.html. 

3. AstraZeneca

AstraZeneca provides 20 of its drugs for free to qualifying individuals through the AstraZeneca Foundation Patient Assistance Program.

Eligibility

• Assistance is available to U.S. residents with incomes below $30,000 per individual, $40,000 for a couple, or $60,000 for a family of four and you have spent at least 3% of your annual income on drugs this year. 

Discount

• Free medications for those who qualify.  Eligibility and the number of month’s supply each patient may receive are determined on a case-by-case basis.

More information on AstraZeneca’s patient assistance program can be found at http://www.astrazeneca-us.com/help-affording-your-medicines/.  Information about coverage for Medicare beneficiaries is at http://www.astrazeneca-us.com/help-affording-your-medicines/?itemId=4846290.

4. GlaxoSmithKline

Eligibility

• Those with no prescription drug coverage and with monthly income below $2256.25 for an individual, $3035.42 for a couple, and $4593.75 for a family of four may qualify for the Bridges to Access Program.  Those without Medicare Part D and generic-only third party coverage and those with Medicare Part D that have spent at least $600 on prescriptions in the current calendar year may be eligible if their monthly income is less than $4512.50 for an individual, $6070.83 for a couple, or $9187.50 for a family of four. 

Discount

• Bridges to Access provides a 60-day supply of outpatient drugs for a $10 copayment at the pharmacy.  Refills are delivered via mail-order. Patients can receive a maximum of two 90-day refills via mail.  Eligibility can be extended for an additional 6 months after the two 90-day supplies have been used.  Full reapplication is required every 12 months.

• Commitment to Access provides a free 30-day supply to the prescriber at a time with up to 13 refills.

More information on GlaxoSmithKline’s patient assistance programs can be found at http://bridgestoaccess.gsk.com/ and http://commitmenttoaccess.gsk.com/. 

5. Pfizer

All of Pfizer’s patient assistance programs can be accessed by calling 1.866.706.2400 or online at www.pfizerhelpfulanswers.com.

6. Other programs

Several other programs are available for those choose not to enroll in a Part D plan.  Many programs require patients to apply for, and be rejected by, the low-income subsidy in order to be eligible; however a beneficiary might be eligible while in the process of having their eligibility for the low-income subsidy determined.  For a complete list of programs available and whether Medicare beneficiaries may qualify, see www.rxassist.org/docs/medicare-and-paps.cfm. 

V. Insurance Company Prescription Drug Discount Program

BlueCross/BlueShield

The BlueCross BlueShield Prescription Drug Discount Program offers a discount to members for specific drugs not covered under the regular prescription drug benefit. It provides discounts on prescription drugs at most retail pharmacies. Information on this program can be found at http://www.fepblue.org/benefitplans/non-fehb/discount.html.

Eligibility

• The Blue Cross Blue Shield Service Benefit Plan is offered to all members of Blue Cross Blue Shield. The cost of these benefits is not included in a Service Benefit Plan premium and charges for these medications do not count toward the out-of-pocket maximum.

Discount

• Participants can expect to save an average of 20% off certain prescription drugs. Discounts apply to commonly used prescription drugs at participating retail pharmacies.

VI. State Pharmaceutical Assistance Programs (SPAPs)

SPAPs are state-funded programs that provide low-income and medically needy senior citizens and/or individuals with disabilities financial assistance for prescription drugs. Twenty-four states and one territory offer these programs to Part D enrollees.  Assistance from qualified SPAPs counts toward out-of-pocket costs.  CMS has published a list of qualified SPAPs available at www.cms.gov/States/Downloads/QualifiedSPAP4.15.08.pdf.  The National Conference of State Legislatures keeps a list of SPAPs and other state programs, and closely follows new developments in state drug coverage at http://www.ncsl.org/Default.aspx?TabId=14334#Subsidy.

VII. National Association of Counties (NACo) Prescription Drug Discount Card Program

Through a partnership with Caremark, this simple discount card can save an average of 22% off the full retail cost of prescription medication.

The program is open to anyone residing in a participating county.

There are no enrollment fees, no forms to fill out, no age or income requirements, and no medical condition restrictions. The entire family is covered with just one card and virtually all commonly prescribed medicine is covered. There is no cost to the county, county taxpayers, or consumers to participate. Caremark negotiates the discounts directly with participating pharmacies. Neither NACo nor the participating counties receive any revenue from the program.

A national network of more than 59,000 retail pharmacies honor the card.  Consumers always receive the lowest retail price. On occasion, pharmacies will price a particular medication lower than the discount rate available with the NACo card. If that occurs, consumers will receive the lower price. Either way, consumers will always receive the best price available.

More detail, including a list of participating counties, is available at http://www.naco.org/Template.cfm?Section=County_Membership&Template=/TaggedPage/TaggedPageDisplay.cfm&TPLID=72&ContentID=16869  

VIII. National Prescription Drug Assistance Programs

1. AIDS Drug Assistance Program (ADAP) www.atdn.org/access/states/

ADAPs provide crucial prescription drug coverage to HIV/AIDS patients as a payer of last resort.  Assistance from ADAPs does count toward out-of-pocket costs as they are partially funded with federal dollars.

Who qualifies?

• Low-income, uninsured or underinsured with HIV/AIDS.

Income restrictions?

• Vary from state to state

2. National Organization for Rare Disorders (NORD)  www.rarediseases.org

Who qualifies?

• NORD’S Medication Assistance Programs help people obtain prescriptions they could not otherwise afford or that are not yet on the market.

Income restrictions?

• Provides prescriptions on a sliding scale based on income.

IX. Mail Order Discount Pharmacies

1. OMC www.advantagerx.com 1-800-809-1389

• Specializes in diabetic and respiratory supplies. No fee. Discount depends on item.

2. APP Pharmacy www.accentrx.com 1-800-677-4323

• Specializes in long-term and chronic medications. No fee. Discount depends on Rx.

3 Express Script www.express-script.com 1-800-854-4469

• Discounts on Rx, dental, hearing, and eye care. Discount depends on quantity and manufacturer’s current price.

4.  Liberty Health Supply www.libertymedical.com 1-866-691-9277 (Diabetes) 1-866-486-2383 (Respiratory) 1-888-800-8824 (General Rx)

• Specializes in diabetic and ostomy supplies. Discount depends on item.

X. Internet Based Discount Programs

1. www.canadadrugs.com 1-800-226-3784 pharmacists@canadadrugs.com

• More than 2,300 Rx available from Manitoba Pharmacy Association. Discount depends on Rx.

2. www.canadapharmacy.com 1-800-891-0844 customerservice@canadapharmacy.com

• Discounts on Rx. Discount depends on RX. $10 shipping and handling fee per order.

3. www.canadameds.com 1-877-542-3330 pharmacists@canadameds.com

• Discounts on Rx, diabetic supplies, vitamins/nutrition, and home health care items. $9.95 shipping and handling fee per Rx package, plus $40 CDN in addition for international destinations. 30-70% discount.

4. www.canadarx.net

• Specializes in chronic and acute Rx, and HIV/AIDS treatment. Limit 3-month supply. You can mail order Rx from U.S. or make an appointment to purchase Rx at participating Canadian pharmacies. $7.50 handling fee per item, plus $18.50 per parcel for shipping. Discount depends on Rx.

XI. Additional Resources

1. www.RxHope.com 

• RxHope is a patient assistance program that links patients with programs based on the specific medication that they take.

2. www.Needymeds.org 

• Needymeds.org provides a variety of services for patients including: links to patient assistance programs, assistance with filling out applications, and discount drug cards.

3. www.Patientassistance.com 

• Patientassistance.com has information about over 1,000 patient assistance programs and can manage all of your programs in one convenient place. 

4. www.PPARX.org

• The Partnership for Prescription Assistance helps patients without prescriptions drug coverage get free or low-cost medications. 

PAGE UPDATED JUNE 2009

Copyright © 2010 Center for Medicare Advocacy, Inc.