HEB21 Medicare Part D Presceiption Drug benefits

Question 1

Part D enrollment

Answer 1

1. Individuals entitled to part A or enrolled in Part B qualify for Part D
   
   1. 1 if retirees leave their ER coverage, they may enroll in a part d plan only during the open enrollment period
   2. 2 exceptions:
      
      1. 2.1 Beneficiaries who permanently move out of the plan service area
      2. 2.2 individual entering, residing in, or leaving a LTC facility
      3. 2.3 involuntary loss or reduction of credible coverage
   3. 2.4 other exceptional circumstances
2. Late enrollment penalty if patients do not sign up for Part D when first eligible - if beneficiary has credible coverage, penalty does not apply

Question 2

Part D defines prescription drug plans for both a PDP and an MA-PD

Answer 2

1. It must offer a basic drug benefit called the standard benefit
2. It may offer supplemental benefits called enhanced benefits
3. It can be flexible in benefit design
4. It must follow marketing guidelines
5. Must not duplicate coverage of Medicare part A, B or C

Question 3

Incentives for ER to participate in Part D

Answer 3

Option 1: retiree drug subsidy (RDS)
1.1 represents spending otherwise covered by Medicare Part D
1.2 company must pass an actuarial equivalence test
1.3 An alternative to RDS is EGWP, see next card
1.4 PPACA eliminates ER tax deduction for subsidy as of 2013
Option 2 is part D: PDP or MA-PDP
2.1 ER becomes an official PDP and offers Part D to retirees
2.2 Alternatively ER hires a PDP or MA plan to serve as its ER-specific plan
2.3 the concern with this option is how much the company will actually pay
Option 3: coordination of benefits in a wraparound plan

Question 4

ER Group Waiver Plan (EGWP)

Answer 4

1. Direct contract EGWP: ERs and unions contract directly with CMS to provide benefits and receive payments directly from the govt
2. The 800 series EGWP
   
   2. 1 Third-party Part D sponsor holds contract between ER and CMS
   3. 2 the ER and union group have no direct convenient with CMS
   4. 3 Plans can be designed to the individual group’s needs
3. Several benefits to encourage ERs to adopt the EGWP rather than RDS:
   
   3. 1 cost savings
   4. 2 risk avoidance
   5. 3 minimal disruption to the membership
   6. 4 tax savings
   7. 5 direct monthly subsidy
   8. 6 administrative functions are handled by a third party sponsor
   9. 7 part D benefit provides catastrophic coverage

Question 5

Part D standard benefit design

Answer 5

1. Monthly premium
2. After deductible, beneficiary pays 25% of costs until initial coverage limit (ICL)
3. Coverage gap begins at ICL until beneficiary reaches true out of pocket threshold
4. Catastrophic coverage starts after coverage gap. Beneficiary pays 5% of costs.

Question 6

True out-of-pocket cost (TrOOP)

Answer 6

1. Cost sharing for Medicare part D benefits before catastrophic coverage begins
2. Payments that count toward TrOOP include payments from
   
   2. 1 Beneficiary
   3. 2 Another individual (such as family member of friend)
   4. 3 A state pharmaceutical assistance program
   5. 4 A charity
   6. 5 A personal health savings vehicle
3. The following are not included in the TrOOP
   
   3. 1 monthly premiums
   4. 2 most insurance payments
   5. 3 Payments for
      
      3. 3.1 drugs purchased outside of the United States
      4. 3.2 OTC drugs
      5. 3.3 Drugs not on the plan’s formulary
      6. 3.4 Drugs not covered by law
4. Low-Income Benefit Design: For beneficiaries eligible for low-income assistance there is no coverage gap