LOW-INCOME MEDICARE BENEFICIARY
THE MEDICARE ACT OF 2003
Prescription Drug Discount Card Transitional Assistance: 2004-2005
Exclusion of Medicaid Beneficiaries
Those who receive full Medicaid benefits are precluded from participating in the Discount Drug Card program. This includes those receiving benefits under a Section 1115 waiver, except those whose eligibility for Medicaid is due to high medical bills (the "medically needy").
Impact for Others:
• Those who have no drug coverage under a health plan or other health insurance coverage, including the uniformed services or Federal Employees Health Benefits Program, and;
• Whose incomes are up to 135% of poverty;
• Are entitled to a discount card with no enrollment fee plus payment of up to $600 of drug costs through a discount card in 2004 and up to $600 in 2005 plus the carryover from the unspent benefit from 2004.
• Those with incomes up to 100% of federal poverty levels (called special transitional assistance eligible individuals) must pay 5% coinsurance for their drugs.
• Those with incomes between 100 and 135% of poverty (called transitional assistance eligible individuals) pay 10% coinsurance.
• No asset test. There is no asset test for transitional or special transitional assistance.
• Self-certification. Applicants self-certify as to income and family size; certification must be done by a specified date to receive the full $600 benefit; the Secretary is authorized by the certification to verify eligibility information through state Medicaid programs, the Social Security Administration and the Internal Revenue Service. The Secretary creates rules for the treatment of Medicaid medically needy beneficiaries with respect to eligibility for discount cards and transitional assistance.
• Deeming MSPs eligible. The Secretary can deem those eligible for Medicare Savings Programs (QMB, SLMB, QI-1) to meet eligibility requirements for transitional or special transitional assistance.
• Permissible State payments. States can pay:
• The enrollment fee for individuals not entitled to transitional or special transitional assistance;
• Under arrangement with the Secretary, the co-insurance for transitional and special transition eligible individuals;
• But there is no federal match for either payment.
• Pharmacy waiver of co-insurance. Pharmacies can waive the co-insurance payment for transitional and special transitional eligible individuals.
• Effect on benefit. Neither a state’s payment, or a pharmacy’s waiver, of the co-insurance affects the $600 benefit.
• Effect of $600 benefit on other benefits. Neither the negotiated discounted drug prices available through the discount drug card nor the $600 benefit affects eligibility for other federal public benefits.
• Medicaid eligibility verification. States must make information about Medicaid eligibility available to the Secretary with respect to applications for transitional assistance for discount drug cards.
Part D Prescription Drug Plans (PDPs): 2006 and Beyond:
Subsidy Eligible Individuals
Medicaid Enrollees with Full Medicaid Benefits (Dual Eligibles)
Dual eligibles enrolled in a Part D plan who are institutionalized. These individuals pay no premium, no deductible, no co-insurance and have no gap in coverage.
Dual eligibles enrolled in a Part D plan with incomes up to 100% of federal poverty guidelines. Individuals meeting these criteria who are not institutionalized pay no premium, no deductible, have no gap in coverage and pay $1 (for generic/preferred drugs) and $3 (for other drugs) co-payments in 2006, with co-payments indexed to Consumer Price Index for future years. All co-payments end when they have spent $3600 out-of-pocket.
All other dual eligibles enrolled in a Part D plan. All other dual eligibles have no premium, no deductible, no gap in coverage. They pay $2 (for generic/preferred drugs) and $5 (for other drugs) co-payments in 2006, with co-payments indexed to the increase in the price of covered drugs in future years. All co-payments end when they have spent $3600 out-of-pocket.
Other Features Related to Medicaid Enrollees. Medicaid beneficiaries enrolled under a Section 1115 waiver appear not to be included in the definition of dual eligibles, thus making them eligible under the non-Medicaid categories, instead. This issue remains unclear.
Other Low-Income Individuals (Without Full Medicaid Benefits)
Incomes to 135% of poverty and limited assets. Individuals enrolled in a Part D plan, with incomes up to 135% of poverty and whose countable assets are not more than $6,000/individual or $9,000/couple, pay no premium, no deductible and have no gap in coverage. They pay $2 (for generic/preferred drugs) and $5 (for other drugs) co-payments in 2006, with co-payments in future years indexed to the price increase in covered drugs. All co-payments end when they have spent $3600 out-of-pocket.
Incomes to 150% of poverty and slightly higher assets. Individuals enrolled in a Part D plan, with incomes between 135% and 150% of poverty who are not eligible under other low-income categories and whose countable assets are not more than $10,000/individual or $20,000/couple, pay a sliding scale premium from $0-$420 and a $50 deductible (in 2006), indexed to the annual price increase in covered drugs. There is no gap in coverage. They pay cost-sharing of 15% (reduced from 25%) up to the catastrophic threshold, with $2 (for generic/preferred drugs) and $5 (for other drugs) co-payments after they spend $3600 out-of-pocket.
Other features related to non-Medicaid low-income beneficiaries:
Resources. Resource levels are indexed to the Consumer Price Index in future years.
Eligibility determination. Eligibility is determined either by the State Medicaid agency or by the Commissioner of Social Security.
Effective date of eligibility. Eligibility for low-income subsidy begins in the month in which the individual applies for such subsidy.
Appeals and redeterminations. Appeals for determinations made by Medicaid are governed by state/federal Medicaid rules. For determinations made by the Commissioner of Social Security, the Commissioner will establish a appeals procedure that is similar to that used for Supplemental Security Income appeals. Redeterminations are made at such time as may be provided by the Commissioner.
Deeming of MSPs. The Secretary may deem Medicare Savings Program (MSP) recipients who are not eligible for full Medicaid benefits as eligible for the subsidy for individuals up to 135% of poverty and must so deem if the state’s rules for MSP eligibility are substantially the same as the federal rules for that subsidy.
No more generous rules allowed. A state Medicaid program’s more generous rules for counting income and resources may not be used in determining eligibility for non-Medicaid subsidy eligible individuals, unless the Secretary determines that their use will not result in significantly more people becoming eligible for the subsidy. Income and resources are determined with reference to the Supplemental Security Income program.
Coordination with State Pharmacy Assistance Programs (SPAP). Payments made through State Pharmacy Assistance Programs (as well as low-income subsidies) count toward out-of-pocket expenses limit. But SPAP's and other third parties may not wrap-around Medicare Prescription Drug Plan Benefits if such benefits would "undermine cost management tools" such as tiered co-payments and limited formularies.
Additional Provisions Relating to State Medicaid Programs’ Role with Respect to Medicare Prescription Drug Plans
Eligibility determinations for low-income subsidy. States must determine eligibility for low-income subsidies and inform the Secretary of such eligibility. States are paid at the regular federal Medicaid match rate (50%) for such activity.
No Medicaid wrap-around services. No wrap around services for Part D-covered drugs that are not included in a PDP’s formulary, or for co-payments, are available for any full benefit dual eligible who is eligible for Part D (drug plan) services. States may, but are not required to, pay for drugs that are covered in their Medicaid plan but are not Part D covered drugs. Thus, there is no mandatory Medicaid drug coverage for individuals eligible for a Medicare drug plan, regardless of whether they are enrolled in such a plan. The Secretary is authorized to enroll in Part D plans dual eligibles who have not so enrolled; the individual retains the right to change Part D plans or to decline enrollment. The prohibition against wrap-around coverage appears not to apply to those enrolled in Medicaid under a Section 1115 waiver, but this remains unclear.
Screening for MSP eligibility. States must, while determining eligibility for low-income subsidies, screen for eligibility for their Medicare Savings Programs and enroll individuals found eligible.
• Phased-down State contribution ("clawback"). States must pay back to the federal government a portion of the savings they realize from not providing drug coverage for beneficiaries who are dually eligible. The amount is the product of a factor (beginning at 90% in 2006 and reducing to 75% in 2014), of the number of dual eligibles enrolled in Part D drug plans and the amount the state would have spent on those individuals without the Medicare drug benefit.
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