# Presentation: 678629

## The New Medicare Prescription Drug Benefit: Impact on HIV/AIDS Care

**Presidential Advisory Council on HIV/AIDS**
**February 7, 2005**
- Christine Lubinski
- Executive DirectorHIV Medicine Association
- Phone:  (703) 299-1215
- Clubinski@idsociety.org

## Medicare 101

- Federal health insurance program for the disabled and elderly (65 years +)
- Administered by the Center for Medicare and Medicaid Services (CMS)
- National standardized health plan
- Eligibility
- Benefits
- Costs to beneficiaries
- Entitlement program
- HIV/AIDS qualify primarily through disability

## Medicare and HIV/AIDS

- Approximately 60,000-80,000 Medicare beneficiaries with HIV/AIDS
- Qualify for Medicare after approximately two years of disability
- Currently no drug benefit - ADAP
- 70-85% also qualify for Medicaid
- ‘Dually eligible’ or ‘dual eligibles’
- Medicaid as wrap-around

## Dually Eligible with HIV/AIDS

- Approximately 50,000 individuals
- Disabled, poor and end-stage of illness
- Rely on Medicaid for HIV medication
- Benefits vary based on geography
- Sometimes use ADAP to supplement Medicaid medication limitations

## Medicare Modernization Act 

- Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003 signed into law on December 8, 2003
- Biggest change to Medicare in 40 years
- Primarily adds a prescription drug benefit to Medicare
- Drug discount cards by 2004
- Prescription drug benefit by 2006 (Part D)

## Prescription Drug Benefit

- Benefit starts January 1, 2006
- Enrollment begins November 15, 2005; earlier for dual eligibles
- Medicare beneficiary chooses:
- Stand-alone prescription drug plan [PDP]
- Managed care plan (Medicare Advantage) that includes a prescription drug plan [MA-PD])
- Expected premium in 2006 of $35 per month (will vary by plan)
- All beneficiary costs and subsidy eligibility adjusted annually

## Prescription Drug Benefit (2006)

|  | Cost-Sharing % | Out-of-Pocket  Costs | Plan % | Plan Cost |
| --- | --- | --- | --- | --- |
| Annual Deductible
$0-$250 | 100% | $250 | 0% | $0 |
| Initial Benefit
$251-$2250 | 25% | $500 | 75% | $1500 |
| “Donut Hole”
$2251-$5100+ | 100% | $2850 *
 | 0% | $0 |
| Catastrophic Coverage
> $5100+ | >of 5% or $2/$5 | $2/$5 or 5% | 95% | unlimited |

*** $3600 total in True Out-of-Pocket Costs (TrOOP)**

## Low Income Subsidies for Beneficiaries with Income Below 135% FPL (2006)

- Full-subsidy eligible individual:
- Dual eligible (including Medicaid benefits that subsidize Medicare premiums)
- Receiving Supplemental Security Income (SSI)
- Income below 135% FPL and asset limits of $6,000 single/$9,000 per couple*
- Subsidy
- Full premium subsidy
- No deductible
- Coverage above the $2,250 limit
- Prescription co-pay
- Institutionalized:  None
- Below 100% FPL: $1 generic/$3 brand drug co-pay*
- Above 100% FPL: $2 generic/$5 brand drug co-pay*
- No cost-sharing after $3,600* out-of-pocket reached

- *  **Adjusted annually**

## Low Income Subsidies for Beneficiaries with Incomes Between 135 and 150% FPL (2006)

- Subsidy-eligible individual:
- Below 150% FPL and asset limits of $10,000 single and $20,000 per couple*
- Subsidy
- Sliding scale premium
- $50 deductible*
- 15% co-pay of costs up to annual out-of-pocket threshold ($3,600* for 2006)
- $2/$5 co-pay* (not higher of 5% co-insurance)

- *  Adjusted annually

## Dually Eligible	

- States will no longer receive federal matching funds for Medicaid prescription drug for duals
- MUST switch to Medicare for drug coverage
- Impact depends on previous State Medicaid plan and Medicare drug plans available in the area
- Access limited to “average cost plan”
- Auto-enrolled in a drug plan in fall 2005
- Maintain Medicaid coverage for other health care services

## Issues and Challenges for Beneficiaries

- Deciding whether to enroll in Part D in 2006 if they have a choice– financial penalties for delayed enrollment
- Enrolling in low-income subsidy program
- Will beneficiaries know they are eligible?
- Will they sign up?
- Comparing plans and deciding which to join
- Could face wide variations in premiums, benefit design, formularies and preferred drug lists each year.
- Facing potential consequences of a bad decision
- annual lock-in
- Tracking their total out-of-pocket Rx costs
- Important due to benefit gap
- Facing formulary changes with 60 days notice

## ADAP/ Medicare Drug Benefit

- ADAP cannot provide “countable” wrap-around coverage to Medicare drug benefit.
- ADAP coverage does not count towards True Out-of-Pocket (TROOP) costs which trigger catastrophic coverage at $3600.
- ADAP may provide supplementary coverage in the form of subsidizing premiums or co-payments and covering non-formulary drugs, but coverage will be costly & ongoing for ADAPs, and persons will not reach catastrophic coverage limit.

## Implications of Medicare drug law and ADAP policies

- Beneficiaries could experience an erosion of drug coverage as they transition from ADAP to Medicare drug benefit
- Medicare beneficiaries with AIDS (including duals) may continue to need ADAP assistance to pay premiums and co-payments and to supplement inadequate formularies, if states are willing and able to do so.
- Financially-strapped ADAPs will experience minimal fiscal relief and new challenges as a result of the new benefit.

## Formulary Requirements for Medicare Rx Plans

- Plans are not required to cover all HIV antiviral drugs.
- Plans are encouraged to comply with federal guidelines for treatment of HIV/AIDS and certain other conditions, but not required to do so.
- Plans are only required to carry two drugs in each therapeutic class and the model formulary developed by USP outlines four classes of HIV drugs– nucleosides, non-nucleosides, protease inhibitor, and other.
- CMS will review plan formularies to ensure that they are not discriminating against certain groups of beneficiaries in their formularies or in their drug cost tiering structure.

## Medicare Formularies, Continued

- Drug plan Pharmacy and Therapeutic Committees are required to have minimal physician representation and there is no specific requirement about consultation with HIV medical experts in formulary development.
- Plans are required to send formulary information to beneficiaries in writing prior to enrollment.
- Plans are required to give beneficiaries 60 days notice before removing a drug from the formulary.  Physicians and beneficiaries may file for an exception based on medical necessity to continue receiving the drug.
- Plans not required to cover drugs for off-label indications, but CMS indicated will not allow plans to have a burdensome process for requesting off-label coverage.

## Grievances and Appeals

- May appeal drug not on formulary only if prescribing physician determines no other covered drug as effective as non-formulary drug and/or adverse effects on individual.
- Time frames for coverage determinations- Standard appeal– 72 hours.
- Expedited appeal automatic if supported by and/or initiated by physician– response to physician no later than 24 hours, 72 hours for redeterminations.
- Emergency supply of medicine pending appeal not required in most instances.
- Appointed representative rep, including physician, allowed to file appeal on behalf of beneficiary at all appeal levels.

## Grievances and Appeals (2)

- “If a Part D plan sponsor maintains a formulary tier in which it places very high cost and unique items, such as genomic and biotech products, the sponsor may design its exception process so that very high cost or unique drugs are not eligible for a tiering exception.”
- Final Regulation, Federal Register/Vol. 70, No. 18, Friday, Jan. 28, 2005

## Improving the Medicare Prescription Drug Benefit for People with AIDS

- Ensure comprehensive coverage of HIV meds on plan formularies based on federal HIV guidelines ( Reg.– referenced, not required)
- Allow ADAP to supplement benefit and count expenditures as true out of pocket costs. (Reg.- no)
- Ensure coverage for off-label use of medications (Reg.- allowed, but not required).
- Allow all medically necessary drugs to count toward catastrophic limit  (Reg.- no)

## More Recommended Improvements

- Allow duals access to the full range of health plans in their area without additional premium costs– not just average cost plan (Reg.- no)
- Do not deny duals medications for failure to pay cost-sharing (Reg. no)
- Change law to allow Medicaid to supplement Medicare coverage with federal matching funds, at least through a transitional period, to ensure continuity of care.

## Ensuring Access to Drugs for Medicare Beneficiaries with AIDS: What PACHA Can Do

- Support ADAP wrap-around as countable out of pocket costs.
- Support a requirement that drug plans cover all HIV drugs
- Support transitional Medicaid drug coverage for dual eligibles to ensure continuity of care.
- Request a presentation from CMS on efforts to educate and enroll Medicare beneficiaries with AIDS (particularly dual eligibles)
- Monitor implementation after January 2006 (request ongoing reports/presentations from CMS on exceptions filed, coverage of HIV drugs and other quality assurance measures)

## Resources for Learning More

| Center for Medicare and Medicaid Services (CMS) | www.medicare.gov |
| --- | --- |
| Medicare Rights Center | www.medicarerights.org/newlawframeset.html |
| Kaiser Family Foundation | www.kff.org/medicare/rxdrugdebate.cfm
www.kff.org/medicare/7067/index.cfm |
| Center for Medicare Advocacy | www.medicareadvocacy.org |
| HIV Medicine Association | www.hivma.org (click on “Policy and Advocacy”; click on Medicare) |