Medicare Part D and Individuals Living with HIV: Assuring Adequate and Affordable Coverage

John V. Coburn, Senior Policy Attorney Health & Disability Advocates

Quick Overview of Medicare Part D

Unlike Medicaid and AIDS Drug Assistance Programs, Medicare Part D is a prescription drug program run through two avenues: private, stand-alone Prescription Drug Plans (PDP) and private Medicare Advantage Plans with drug coverage. In order to be eligible for Medicare Part D, an individual must be eligible for Medicare Part A and/or enrolled in Medicare Part B. Individuals enrolled in Medicare and Medicaid now receive their general drug coverage from Medicare, not Medicaid. Medicaid may still cover drugs that are excluded by law as “covered drugs” under Part D for Medicare beneficiaries and receive federal match.

Medicare Part D Standard Benefit

 Monthly Premium

 Deductible of up to $275

 Initial Coverage: Beneficiary pays co-payment, depending on drug tier, until total drug costs reach $2510

 Coverage Gap “Doughnut Hole: Beneficiary pays 100% of drug costs (some plans cover generics) until True Out of Pocket Costs (“TROOP”) reach $4050

 Catastrophic Coverage: Beneficiary pays small co-payments or 5%, whichever is greater

What Counts as Total Drug Costs and TROOP?

It is important to understand that Total Drug Costs and TROOP are two different numbers and calculations. Total drug costs determine when the Initial Coverage ends. This is the total cost of the drugs, no matter who is paying. Once a beneficiary reaches the coverage gap, total drug costs are irrelevant. Then, TROOP is the number that determines when the coverage gap ends and catastrophic coverage begins.

TROOP includes:

 Anything the beneficiary, a friend, or a relative pays on behalf of the beneficiary

 Anything paid by a State Pharmaceutical Assistance Program

 Anything paid by the Low Income Subsidy or “Extra Help”

 Anything paid by a charity or foundation that is NOT a government funded health program

 NOT AIDS Drug Assistance Program

What are PDPs actually doing? PDPs do not have to follow the standard benefit. They must offer the actuarial equivalent of the standard benefit. Premium prices vary among plans. During the initial coverage phase, most plans tier the drugs. Those tiers usually include generic, preferred brand, non-preferred brand, and specialty drugs. Anti- retrovirals can appear on different tiers depending on the plan. Some may put a drug at preferred brand while others label it a specialty drug. Some plans cover generics during the doughnut hole. Prior to 2008, there was a plan each year that covered various brands during the coverage gap. This year, only one plan, serving Florida, covers a limited number of brand name drugs to treat a specific condition.

The Standard Benefit is Unaffordable for my clients. What do they do?

On the federal level, the Low Income Subsidy or “extra help” can assist a beneficiary in affording the Medicare Part D benefit. Some individual automatically qualify for the Low Income Subsidy and others must apply. The categories of extra help are:

 Dual Eligibles (enrolled in Medicaid at the relevant time and Medicare)

 Medicare Savings Programs enrollees (QMB, SLMB, QI) and SSI without Medicaid

 Full “extra help” applicants (up to 135% FPL income, limited assets)

 Partial “extra help” applicants (up to 150% FPL income, limited assets)

Individuals enrolled in Medicaid, Medicare Savings Programs or SSI without Medicaid automatically qualify for “extra help” assistance. Other low-income beneficiaries must apply. Attached is a chart explaining the cost sharing for the varying level of assistance. In addition to lower cost sharing, Low Income Subsidy enrollees have the option to switch plans every month.

Are there other government programs that assist with cost sharing?

Prior to Part D, many states offered drug coverage to seniors. Some also extended this coverage to persons with disabilities. These programs are commonly referred to as State Pharmaceutical Assistance Programs (“SPAP”). With the advent of Part D, states were given the option to convert these Programs into qualified SPAPs that would provide wraparound coverage to individuals with Part D. Most did. And, some states created new SPAPs to provide more affordable coverage under Part D.

Example: Illinois Cares Rx. Prior to Part D, Illinois provided drug coverage to seniors and persons with disabilities. This SPAP converted into wraparound coverage under Part D that mirrored the coverage afforded to individuals before Part D.

Can ADAP assist with cost sharing or still assist beneficiaries not otherwise eligible for these other low- income programs?

Yes. ADAPs can and should assist Medicare beneficiaries. Almost all do. Medicare Part D’s cost sharing for those not eligible for the Low Income Subsidy or a SPAP simply will not work for individuals living with HIV. The medications are simply unaffordable during the coverage gap. HRSA and CMS early on advised the ADAP Programs that they could assist Medicare beneficiaries.

There are a few basic rules concerning APAPs:

 ADAP enrollees must join a Part D plan

 ADAPs are allowed to pay Part D premiums, co-pays and cost sharing.  ADAPs are always payer of last resort

 ADAP expenses do not count toward TROOP

 Some ADAPs do not pay Part D premiums, co-pays or cost sharing but still allow Part D enrollees to access medications through their Program

What are the formulary requirements for these PDPs?

In general, each PDP must provide two drugs in 203 drug therapy categories. And, they must provide an appeals process for any unfavorable coverage determinations. For antidepressants, anti-psychotics, anti- retrovirals, anticonvulsants, anti-neoplastics, and immuno suppressants, PDPs must carry all or substantially all of the drugs. Anti-retrovirals have added protection of no prior authorization (except Fuzeon) or step therapy. Next plan year, prior authorization will be completely prohibited for anti- retrovirals. And, plans must include new anti-retrovirals within 90 days. In general, studies have shown that PDPs follow these formulary rules most often with the anti-retrovirals and less often with the antidepressants and anti-psychotics.

What factors should beneficiaries consider in picking plans?

Beneficiaries have an overwhelming number of plans from which to choose. Depending on the level of federal “extra help” or state assistance, there will be much different considerations in choosing a plan. For example, there have been many examples of individuals with HIV and those assisting them choosing plans that offer their anti-retrovirals at the cheapest price. But, ADAP was still supplying their anti- retrovirals! Therefore, that should not have been a factor in choosing a plan and they may be overpaying for other drugs as a result.

Those with the Low Income Subsidy that provides full “extra help” need to focus on formulary issues and ask the following:

 Are all of my drugs on the formulary?

 What benefit management tools are attached to my drugs?

 Do I want to consider a higher priced premium that better covers my drugs?

 Is my pharmacy included in the plan network or is this even important to me?

Everybody else needs to focus on both formulary and cost issues and consider the following:

 Are all the drugs on the formulary?

 What are the benefits management tools attached to my drugs?

 What is the premium?

 What is the deductible?

 What are the co-payments attached to my drugs?

 Is my pharmacy included in the plan network?  Am I qualified for a SPAP and how does that impact my cost?

 What is ADAP willing to cover and have I factored that into my analysis?

Creating an SPAP to replace ADAP for Medicare Beneficiaries

ADAP expenses do not count toward TROOP. But, they do count toward total drug costs. Therefore, ADAP Programs that assist with cost sharing under Part D can get the person to the coverage gap but cannot get them out. Because of the expenses of the drugs, beneficiaries are left with no coverage for non-ADAP drugs. And, ADAPs must take the individuals back onto their programs full-time at the beginning of the year.

Several states, including Illinois, Virginia, Colorado, Nevada, and Texas have created HIV specific SPAPs to deal with this issue. Because SPAP expenses count toward TROOP, they can assist an individual in spending through the coverage gap to catastrophic coverage. ADAP Programs save money because the catastrophic coverage co-pays are cheaper than taking the individual back full-time. And, the beneficiaries are able to take advantage of catastrophic coverage, where the co-pays on their non-ADAP drugs are no greater than 5%.

Emerging Issues on the Federal Level

The HIV Medicare Medicaid Working Group, which includes advocates and agencies throughout the country, have prioritized two Medicare issues for individuals living with HIV:

1. ADAP expenses should count toward TROOP.

2. Codifying the six protected classes of drugs.

The CHAMP Act (information attached) passed the House last year and contained several improvements to Medicare Part D. The Senate has not passed these improvements, but it is currently working on Medicare-related legislation. A fact sheet on the CHAMP Act is attached.

Problem Solving Under Part D: There is an Answer Somewhere, Most of the Time…….!

Medicare Part D is a complex program. It is difficult to manage and many issues take several steps to resolve. If ever individuals needed an advocate for a Program, this is the one. Advocates who understand the system can navigate it properly and find solutions to client problems. Most issues can be solved.

Problem: Individual calls you. They are newly eligible to Medicare. They were previously enrolled in Medicaid. They went to the pharmacy and their Medicaid card didn’t work. They know nothing about Medicare Part D. They cannot get their meds.

Solution: The system broke down at some point. The advocate has to find the disconnect. It could be at the state. It could be at CMS. It could be with the plan. Each must be contacted and the problem identified. Then, the solution must be pursued. It could involve any number of strategies. You have to know who to call and BE PERSISTENT!

Issues that Continue to Evade (Easy) Solution:

1. Dual Eligibles who meet spenddown at an inconvenient time. 2. Off-label drug use.

Identifying Resources and Partners in Your Community

It takes a lot of contacts and resources in your community to solve these issues. Effective advocacy involves partnerships and collaborations with a wide variety of individuals and agencies to get clients the meds they need. Any effective advocate should identify and establish a relationship with:

 The SHIP Agency: Medicare experts who have seen it all.

 The Area Agency on Aging: Years of experience with Medicare, warriors in the Medicare Part D world.

 A Local Senior Center or Senior Services Agency: I promise you somebody there has signed up half of the older adults in your community into a Part D plan and made sure it worked. They know the system backwards and forwards.

 ADAP: Always plays a back-up role when things go wrong and usually understands that it can and they may need to assist.

 Medicaid Contact: Somebody who can confirm Medicaid eligibility when you need to prove somebody is a dual eligible.

 CMS Dual Eligible Emergency Number or E-Mail: Caseworkers will prioritize dual eligibles who need meds now, particularly individuals living with HIV.

 A Pharmacist that Understands the Emergency Dual System, How This System Works and That They Will Get Paid, Eventually: Don’t fight with the pharmacy that doesn’t get it. Find the one that does.

 A Clinic That Can Give an Emergency Supply While You Figure Out What is Going On: Clients will come to you with no meds and problems are not solved instantly.

 SPAP Contact, if applicable.

 A Local Group that Meets About Medicare Issues: Find this, and the rest of this list will be in the room too!

 National Listserve of Medicare Advocates