MEDICARE REPLACEMENT DRUG DEMONSTRATION PROJECT
AND MEDICARE PART B


SUMMARY: 

Despite the fact that the Replacement Drug Demonstration Project (the Demonstration Project) is supposed to cover expensive medications not generally covered under Medicare Part B, some of the medications covered by the Demonstration Project may be covered under Medicare Part B when they are administered incident to a physician’s professional services.  The multiple sclerosis drug Avonex is an example of such a medication.

Medicare beneficiaries who receive coverage of prescription medications under Medicare Part B who are considering enrolling in the Demonstration Project, should first compare the out-of-pocket costs of each program. After this comparison, they may find that they have fewer out-of-pocket costs under Part B than they would have in the Demonstration Project.

People who are currently receiving their medications through a pharmaceutical company’s prescription assistance program should also be concerned about additional costs if they enroll in the Demonstration Project.  These individuals may go from paying nothing or nominal fees for their prescription medications to paying significant out-of-pocket costs if they enroll in the Demonstration Project.  Unfortunately, Medicare beneficiaries who are currently enrolled in prescription assistance programs sponsored by pharmaceutical companies may find that they have no choice in the matter. If they do not enroll in the Demonstration Project, the pharmaceutical companies may disenroll them from their prescription assistance programs.

THE DEMONSTRATION PROJECT:

Standard Benefit:                              2004                                                    2005

Deductible:                                           $85                                                      $250

Coinsurance:                                         25%                                                     25%

Initial Coverage Limit:                           $660                                                    $2,250

Catastrophic Coverage available:          after $1,200 spent out-of-pocket          after $3,600

Low Income Beneficiaries: There are fewer out-of-pocket costs for individuals with incomes below 150% of the federal poverty level.   (In 2004:  $13,965 for 48 contiguous states, $17,445 for Alaska, and $16,050 for Hawaii).

MEDICARE PART B:

CONCLUSION:

Before enrolling in the Demonstration Project, individuals who already receive Medicare coverage for one or more of the medications covered by the Demonstration Project should compare their current out-of-pocket costs with the out-of-pocket costs they will accrue under the Demonstration Project. They may find that their out-of-pocket costs will be more expensive if they enroll in the Demonstration Project than they are under Medicare Part B or through a pharmaceutical company’s prescription assistance program.

For assistance with this calculation, beneficiaries with multiple sclerosis should contact the local chapter of the National MS Society or should call 1-800-FIGHTMS. Other beneficiaries should contact their state’s State Health Assistance Program (SHIP).


Copyright © Center for Medicare Advocacy, Inc. 08/19/2013