HealthCare Choices Resource Center



HealthCare Choices Resource Center

Bulletin

September 7, 2012

Save the Date!! The next Make Medicare Work (MMW) Coalition meeting will take place on Tuesday, October 23rd in Chicago. Location details and information will follow shortly.

|Medicare Updates |

Medicare Part D 2013 Benefit Limits

The Centers for Medicare and Medicaid Services (CMS) have announced the Medicare Part D benefit limits for 2013. Below is a chart that compares Medicare Part D limits from 2012 to 2013.

| |2012 |2013 |

|Annual Deductible |Up to $320 |Up to $325 |

|Initial Coverage Limit |$2,930 |$2,970 |

|True-Out-of-Pocket Limit (TrOOP) |$4,700 |$4,750 |

| |$6,657.50 |$6,733.75 |

|Catastrophic Coverage Limit | | |

| |$2.60 |$2.65 |

|Copayment for a generic or preferred drug that is a multi-source drug after | | |

|catastrophic coverage limit | | |

|All other drugs after catastrophic coverage limit |$6.50 |$6.60 |

Background: How the Medicare Part D Benefit Works

The Medicare Part D (prescription drug plan) benefit works on a calendar year and is structured into different coverage stages. An individual progresses through these stages by reaching dollar amount limits according to the drugs he or she fills through the Part D plan. These dollar amounts change every year. Drugs must be covered by the Part D plan (on the drug plan’s formulary) for the costs to count toward the benefit limit. Below is an explanation of how Medicare Part D currently works in 2012.

• Deductible - Some plans have a deductible and some plans do not.

o Deductible amounts in 2012 range from $0 to $320. This is the amount the beneficiary must pay out of his or her own pocket before the Part D plan will begin to pay a portion of the drug cost. The Part D plan does not pay anything toward the deductible.

• Initial Coverage Limit - between $0 and $2,930 in full drug costs.

o The beneficiary pays a set co-pay or co-insurance amount, and the plan pays their part once any applicable deductible has been met. Most plans structure their plan co-pays or coinsurance amounts by tier level, with certain types of drugs included on each tier level. For example, tier 1 generally includes generic drugs; tier 2 includes preferred brand name drugs and so on.

o The initial coverage limit ($2,930) includes the amounts the beneficiary and the plan pays for covered drugs on the formulary.

▪ For example, if the full cost of a formulary drug is $100 but the beneficiary’s co-pay is $30, the full cost of $100 (which includes the $30 co-pay the beneficiary pays) will be included toward the $2,930 limit.

• Donut Hole (also referred to as Coverage Gap) – between $2,930 and $6,657.50 in full drug costs)

o The beneficiary’s cost-sharing for drugs increases once a beneficiary uses $2,930 in drug costs. This is called the donut hole.

o Note: the full cost of the drug (not just the co-pay the beneficiary was paying during the initial coverage limit) is used to reach the donut hole.

o The Affordable Care Act provides individuals in the donut hole with discounts off the full cost of their drugs. In 2012, the discount amounts are as follows:

▪ 50% discount off of brand name drugs (beneficiary pays 50% co-insurance)

▪ 14% discount off of generic drugs (beneficiary pays 86% co-insurance)

o These discount amounts will gradually increase through 2020, at which point the donut hole will be eliminated and beneficiaries will pay the Part D plan’s standard costs sharing amounts (by tier) throughout the entire calendar year once any deductible amount has been met.

• Catastrophic limit - after $6,733.75 in full drug costs are accumulated.

o At this point, the plan pays 95%, and the beneficiary pays 5% or $2.65/$6.60 (whichever is greater for the remainder of the calendar year).

If a beneficiary reaches the catastrophic limit, he or she will have paid $4,700 in True Out-of-Pocket costs (TrOOP) costs. A beneficiary can refer to his or her most recent Explanation of Benefits (EOB) notice from the Part D plan to find out what his/her current TrOOP amount is at any point during the year. He or she may also contact the plan directly to find out. Medicare requires Part D plans to mail out EOB notices to their members monthly.

Best Available Evidence Policy

The Best Available Evidence (BAE) policy was created in 2006 by CMS to use when assisting clients who qualify for the Low-Income Subsidy (LIS or Extra Help) but their eligibility is not yet reflected on their Part D plan’s files. If an individual with LIS goes to the pharmacy and is charged more than the appropriate LIS co-pays, he or she can use BAE to prove LIS status.

CMS requires Part D plans to issue members their drugs at the correct LIS cost sharing amounts when evidence of the member’s LIS eligibility is submitted. Part D plans are also required to update their system to reflect the member’s correct LIS subsidy and submit the BAE to CMS if CMS does not already reflect the correct LIS status on file.

A list of documentation that may be submitted as BAE and proof of LIS status includes:

• A dated Medicaid card with the person’s name on it showing current entitlement

• A signed and dated note from the state Medicaid agency that documents contact with the verifying entitlement

• A print out, screen shot or copy of electronic eligibility data

• Other documentation from Medicaid

• LIS award letter

If the beneficiary claims to have LIS but does not have any of the documentation listed above, Part D plans are required to complete a BAE Assistance worksheet with the beneficiary’s information, including when or s/he will run out of medication and send it to the CMS Regional Office (CMS RO). The CMS RO will then determine LIS eligibility and convey the information back to the plan.

There may be occasions when the BAE policy does not work or plan representatives may not be aware of the BAE policy. To assist individuals in these instances, CMS has released a BAE contact list by Part D plan. Please use the contact list only after you contact the plan and the BAE policy procedure does not work. Click here for more information and the BAE contact list.

Medicare Part D Income Related Premium Increases for People with Higher Incomes

Since 2007, people with higher annual incomes have paid higher Part B premiums. In 2011, these individuals also began paying higher monthly Medicare Part D premiums. Medicare calls this the Part D Income-Related Monthly Adjustment (IRMA). According to the Social Security Administration (SSA), IRMA increases affect less than 5% of Medicare beneficiaries.

The adjusted Part D IRMA amount depends on an individual or couple’s income that is reported to the IRS and is paid separately from the monthly Part D premium. The IRMA amount is collected by Social Security and goes to Medicare. Individuals with IRMA-related questions or who have had a change in income since filing their last tax return should contact Social Security at (800) 772-1213 to report the decrease in income.

The chart below lists the Part D IRMA amounts for 2013 that were recently announced by CMS.

|Medicare Part D Income-Related Monthly Adjustment (IRMA) |

|2012 Compared to 2013 |

| | |2012 IRMA Amounts - |2013 IRMA Amounts |

|Single - filing an individual tax|Married - filing a joint tax | | |

|return |return** |(in addition to the Part D premium) |(in addition to the Part D monthly premium) |

|$85,000 or less |$170,000 or less |$0 |$0 |

|$85,001 –$107,000 |$170,001 - $214,000 |$11.60 |$11.60 |

|$107,001 - $160,000 |$214,001 - $320,000 |$29.90 |$29.90 |

|$160,001- $214,000 |$320,001 - $428,000 |$48.10 |$48.30 |

|Greater than $214,00 |Greater than $428,00 |$66.40 |$66.60 |

Note: The 2013 Medicare Part B IRMA amounts will be released when the 2013 Part B premiums are announced in mid to late October later this year.

Medicare Coverage of Outpatient Mental Health Services

Medicare Part A and Part B both cover mental health services. Part A covers mental health care if an individual is an inpatient in a general or psychiatric hospital. Part B covers outpatient mental health services and visits with certain health professionals who accept Medicare assignment, such as psychiatrists, clinical psychologists, clinical social workers and other health professionals.

A beneficiary’s cost sharing for mental health services will vary depending on the type of service he or she receives. Medicare Part A covers inpatient mental health care in a general or psychiatric hospital with the same cost sharing as a general inpatient hospital benefit period. However, Medicare Part A will only cover up to 190 days in an individual’s lifetime for inpatient services received at a psychiatric hospital.

Medicare Part B coverage of outpatient mental health services is different than coverage of other Part B services. Currently, Medicare covers 60% and the beneficiary is responsible for 40% cost sharing (in 2012). In 2008 the Medicare Improvement for Patients and Providers Act (MIPPA) was passed, which decreases a beneficiary’s cost sharing for outpatient mental health services. The cost sharing will decrease to 35% in 2013 and to 20% in 2014 (the same coverage as most other Medicare-covered outpatient services). Please visit for a guide created by CMS that explains Medicare coverage of mental health benefits.

|Social Security Updates |

Social Security Statements Now Available Online

In 2011, the Social Security Administration (SSA) stopped mailing working individuals annual statements that estimated retirement, disability and survivors benefits due to mailing and printing costs. The statements included information such as an individual’s estimated Social Security disability, survivor’s and retirement benefit depending on the age he or she retired, became disabled or died.

However, individuals may now access this information online through Social Security’s website by creating an online account. Once an account is created, an individual may print out his or her statement and review a record of annual earnings that include Social Security and Medicare taxes paid.

Note: Social Security has once again continued mailing paper statements to workers age 60 and older and who are not yet collecting benefits. The annual statement will arrive three month prior to the individual’s birthday. Click on the following link for more information: .

|Resources |

Make Medicare Work (MMW) Coalition Webpage

MMW resources and educational materials may now accessed online by visiting the MMW webpage at . On this page you will find a 2012 MMW calendar of events, bulletins, topical briefs, fact sheets, and webinar recordings. You may also view our toolkits that include Working with Individuals Age 55-64 Without Insurance, Working with Deaf and Hard-of-Hearing Individuals, and How Medicare Works with Employer-Based Coverage.

Home Health Agencies Compare Tool

The Medicare website at now includes a home health comparison tool that beneficiaries and counselors can use to compare home health agencies in their area. Home health agencies provide skilled nursing care, physical therapy, occupational therapy, speech therapy, medical social services. They will also provide home aide services if an individual is receiving one of the skilled care services already mentioned.

The comparison tool allows individuals to search for agencies and provides specific information by agency, such as the types of home health care offered, patient survey results and quality of patient care. This tool is similar to the hospital and nursing home compare tool already available on . Also available on the same page is a checklist individuals may use to compare home health agencies. Click on the following link to access the Home Health Comparison tool: .

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As always, feel free to contact us with any comments or questions. If you would like to unsubscribe and not receive updates and information from the Make Medicare Work Coalition, please contact us by calling (708)383-0258 or emailing Georgia.Gerdes@ or Erin.Weir@.

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