A POTPOURRI OF PART D


On October 1, 2007 Medicare Part D plans are allowed to begin marketing efforts to entice beneficiaries prior to the 2007 Annual Coordinated Election Period (AEP) for Medicare Advantage (MA) and Prescription Drug Plans (PDPs).  The AEP begins on November 15 and continues through December 31, 2007.  During this time beneficiaries have the opportunity to change their existing plans if they wish.  Enrollment changes made during the 2007 AEP will take effect on January 1, 2008.

 

As a prelude to the AEP, the Centers for Medicare & Medicaid Services (CMS) recently issued a "GUIDE TO CMS, SSA AND PLAN MAILINGS SUMMER AND FALL 2007."  In forthcoming Alerts, we will discuss more about the factors beneficiaries need to consider before deciding to stay with, or change, their existing plans for the coming year.  Here we discuss information beneficiaries should have received, or will be receiving shortly, and include a chart summarizing changes in standard Part D cost-sharing for 2008.

 

Late Enrollment Penalty (LEP) Letters

 

Some Part D beneficiaries have begun receiving letters from their plans telling them that they may owe a late enrollment penalty (LEP) for 2007.  Given these letters, a LEP "refresher" is probably in order.

 

Based on information in Chapter 4 of the Medicare Prescription Drug Benefit Manual, the mechanics of determining, calculating and applying the penalty are summarized as follows:

 

This is the first year that late enrollment penalties will actually be collected.  While there has been time to establish the process, concerns still exist.  If this follows the pattern of the 2006/2007 Social Security Part D premium deduction process, advocates should be ready for a whole new set of problems in 2008.  The first LEP call received at the Center was from a beneficiary who received a letter from his very own plan - the one that has covered him from March 1, 2006 to the present day - telling him that information they received from CMS indicates he has had a lapse in coverage greater than 63 days and, therefore, will be subject to a penalty.  As of this printing he has completed and returned his attestation form, and waits to see what will happen next.

 

Reminder: Low Income Subsidy ("Extra help") Letters Sent in September

 

Beneficiaries who rely on "Extra Help" (Social Security’s Low Income Subsidy) to pay for Part D premiums and co-pays need to pay attention to the mailings they may receive this month.  These mailings are color coded, which will make it easier for advocates and other helpers to decipher some of the letters their clients have received.  The following mailings are being sent in September:

 

Loss of Deemed Status Letter (Pub. 11198).  This is a GRAY letter that was mailed in mid-September 2007.  It is going to people who will not be deemed eligible for Extra Help in 2008.  This includes people who lost eligibility for Medicaid, the Medicare Savings Program, or SSI during 2007.  People who receive this mailing, but think they may still qualify for Extra Help based on their income and assets, should apply for Extra Help through the Social Security Administration or their State Medicaid office.  (An Extra Help application and postage paid envelope are enclosed with this mailing.)

 

Change in Extra Help Co-Payment Letter (Pub. 11199).  This is an ORANGE letter being mailed in late September 2007.  It is going to people who will still automatically qualify for Extra Help in 2008, but may have a change in their co-pay amounts.  If they have had an increase in their income or assets, their co-pays may go up slightly; if their income or assets have decreased, their co-pays should fall accordingly.  Read more about the 2008 co-pay levels in the next section of this Alert.

 

NOTE:  In August 2007 Social Security mailed a Letter to Review Eligibility for Extra Help (Form 1026) to a sample of people who were chosen for re-determination of their eligibility for Extra Help.  (These are people who applied for Extra Help as opposed to being deemed eligible for the program.)  People who received this letter had 30 days in which to reply by completing the Income and Resources Summary enclosed with the letter.  Any change to eligibility (increase, decrease or termination) will be effective January 1, 2008.  People who received but did not respond to this letter will lose their Extra Help benefits in 2008.

 

Advocates should be aware that beneficiaries may have received these letters which they may not recognize or understand, and be prepared to help them navigate the processes signaled by the mailings.

 

Medicare Part D Cost Sharing for 2008

 

2007 amounts are also shown for comparison purposes.

 

Standard Benefit

2007

2008

Annual Deductible

$265

$275

Initial Coverage Limit

(beneficiary pays 25% of this amount)

$2400

(($2400 – $265) x 25% = $533.75 out-of-pocket)   

$2510

(($2510 -$275) x 25% = $558.75 out-of-pocket)

Once in the donut hole, beneficiary pays the next…

$3051.25

$3216.25

Out-of-Pocket Threshold

$3850

($265 + $533.75 + $3051.25)

$4050

($275 + $558.75 + $3216.25)

Minimum cost sharing  during Catastrophic Coverage

$2.15 (generic)

$5.35 (brand name)

$2.25 (generic)

$5.60 (brand name)

Full Benefit Dual co-pays

if institutionalized


$0


$0

in community, income up to 100% FPL

$1/$3.10 up to out-of-pocket threshold

($0 after out-of pocket threshold)

$1.05/$3.10 up to out-of-pocket threshold

($0 after out-of pocket threshold)

in community, income > 100% FPL

$2.15/$5.35

($0 after out-of- pocket threshold)

$2.25/$5.60

($0 after out-of-pocket threshold)

Non-full benefit dual FULL SUBSIDY
 

resources < $6,120 (single) or <$9,190 (couple)

$2.15/$5.35

($0 after out-of-pocket threshold)

$2.25/$5.60

($0 after out-of-pocket threshold)

resources <$10,210 (single) or <$20,410 (couple)

Deductible $53

15% co-insurance

($2.15/$5.35 after out-of-pocket threshold)

Deductible $56

15% co-insurance

($2.25/$5.60 after out-of-pocket threshold)

Non-full benefit dual

PARTIAL SUBSIDY

 

Deductible $53

15% co-insurance

($2.15/$5.35 after out-of-pocket threshold)

 

Premium amount based on sliding scale

Deductible $56

15% co-insurance

($2.25/$5.60 after out-of-pocket threshold)

 

Premium amount based on sliding scale


 

Copyright © Center for Medicare Advocacy, Inc.