Obsoletes: Information Memorandum dated 06/07/05 - Medicare Part D - Prescription Drug Coverage; Action Memorandum dated 06/30/05 - Medicare Part D - Prescription Drug Coverage; and Information Memorandum dated 12/30/05 - Updates on Medicare Part D.
- Medicare Part D provides prescription drug coverage for individuals who have Medicare and receive medical assistance from the state of Illinois;
- To receive Medicare Part D coverage, a person must enroll in a prescription drug plan or a Medicare managed care plan that provides drug benefits;
- A person who receives medical benefits and is eligible for Medicare is deemed eligible for Extra Help and automatically enrolled in Medicare Part D;
- Some over-the-counter medications and prescription drugs not covered by Medicare Part D (called Medicare Part D excluded meds) may continue to be covered for persons receiving medical benefits;
- Pharmacies are able to enroll "dual-eligible" persons (those who receive medical assistance and Medicare in the same month) in Medicare Part D at the point of sale, if otherwise eligible;
- A dual-eligible person may change their prescription drug plan if auto-enrolled;
- There are several phone numbers to call for help;
- Reconsiderations and appeals must be filed with the enrolled plan provider.
- What is Medicare Part D?
- Dual Eligibility and Enrollment in Part D
- Low Income Subsidy (LIS) Program/Extra Help
- Extra Help for Persons Who Do Not Receive Medical Benefits
- Choosing a Prescription Drug Plan
- Limited Income Newly Eligible Transition (LINET)
- Changing a Prescription Drug Plan
- Reconsideration and Appeal
- Refunds from Part D Plans
- MANUAL REVISION
What is Medicare Part D?
Medicare Part D is a prescription drug program for persons who are eligible for Medicare Part A or Medicare Part B. Medicare Part D is an optional benefit. To receive Medicare Part D coverage, a person must enroll in a prescription drug plan or a Medicare managed care plan that provides prescription drug coverage. A person enrolled in Medicare Part D must pay monthly premiums, annual deductibles, and co-payments for each prescription filled.
There are two ways to get Medicare prescription drug coverage:
- Medicare Prescription Drug Plans (PDPs); or
- Medicare Advantage Plans (MA-PDs).
Medicare beneficiaries who are enrolled in original Medicare will receive prescription coverage from a Medicare PDP.
A person who chooses to enroll in a Medicare Advantage (MA) plan will receive prescription coverage from a Health Maintenance Organization (HMO), a Preferred Provider Organization (PPO) or other managed care arrangement.
Dual Eligibility and Enrollment in Part D
When a person who receives medical benefits from the state becomes eligible for Medicare Part D, they are auto-enrolled into a prescription drug plan by the federal Centers for Medicare and Medicaid Services (CMS). State medical assistance programs under Medicaid cannot pay for prescriptions for anyone who must enroll in Part D.
Individuals with other prescription coverage through an employer or retirement plan may opt out of Part D and use the other insurance for their medications. Individuals with Medicare opt out of Part D coverage by calling Medicare at 1-800-633-4227 and stating they want to opt out or disenroll from Part D. Individuals who have not already chosen a prescription plan and who do not opt out are automatically enrolled in a Part D plan by federal CMS when they become "dual-eligible." Depending on the policy of their other insurance, being auto-enrolled into a Part D plan could affect the other insurance coverage. Anyone who is unsure how their other coverage is affected by enrolling in Part D should contact their insurance provider. If the person opts out of Part D, they remain covered for prescriptions by the other insurance and are responsible for following that plan's drug formulary and paying their plan's co-pays and deductibles.
Persons who become eligible for Medicare will receive a "Welcome to Medicare" packet three months before enrollment. The packet explains enrollment in Part D and how it works for people who receive medical benefits from the state. Individuals who have not picked a Part D plan can be temporarily enrolled through the LINET process at the pharmacy (described below).
When a person who receives Medicare begins receiving medical benefits from the state, the Department of Healthcare and Family Services (HFS) centrally notifies Medicare that the person is eligible for Extra Help. Extra Help enrollment may take a few weeks to process. To get Extra Help benefits immediately, the person can provide evidence of Medicaid coverage at the pharmacy or to their Part D provider. Proof may include:
- state medical card;
- approval letter; or
- other evidence the person receives medical benefits from the state.
The plan is required to accept reasonable evidence and immediately adjust the person's costs.
Low Income Subsidy (LIS) Program/Extra Help
The Low Income Subsidy (LIS) Program, also called Extra Help, helps pay monthly premiums, annual deductibles and co-payments required for persons enrolled in Medicare Part D.
Persons who receive Medicare and medical assistance (including met spenddown, QMB, SLIB and QI-1) or SSI do not have to apply for Extra Help. Persons who are dual-eligible will automatically receive Extra Help without applying for it.
The state will continue to cover all medical services except prescription drugs covered by Medicare.
- Example: Theresa is on Medicare and approved for QI-1. She goes to the pharmacy to pick up three prescriptions and is told they cost $1,413 because she is in the coverage gap (commonly called the "donut hole"). Theresa presents her medical card to the pharmacy and they call her PDP. The PDP asks the pharmacy to fax a copy of the medical card. The PDP changes Theresa to dual-eligible and she is able to purchase her prescriptions for $26.40 ($2.50 plus $6.30 co-pay each).
With Extra Help, individuals on Medicare save most of the cost of Part D because they pay:
- no monthly premiums up to the national base beneficiary premium ($32.42 for 2014). If the person chooses a Part D plan that is more expensive, the client must pay the excess over the federal average; and
- no annual deductible; and
- no 25% co-insurance period; and
- no coverage gap; and
- no catastrophic coverage period (5% co-pay period); and
- low co-pays for all formulary prescriptions.
Dual-eligible persons can switch plans as often as needed.
Extra Help begins with the first month the person is covered by both Medicare and medical assistance from the state. If someone is only dual-eligible during the first six months of the year (January - June), the Extra Help continues through the end of that year. If a person is dual-eligible at any time during the second half of the year (July - December), Extra Help continues through the end of the following year.
- Example: Mary meets her spenddown for August and September 2013 only. The case cancels after 3 months of unmet spenddown. Mary has Extra Help from August 2013 through December 2014.
2014 Medicare Part D co-pays for a dual-eligible person who purchases drugs included in the formulary of his or her PDP:
$0 - nursing home residents and Home and Community Based Services (HCBS) waiver customers (co-pays for CILA residents without an HCBS waiver are covered by HFS);
$1.15 generic, $3.50 name brand - regular Medicaid or QMB (100% FPL or less);
$2.65 generic, $6.60 name brand - spenddown, HBWD, SLIB & QI-1 (over 100% FPL).
Individuals who recieve Medicare and do not receive state medical coverage can apply through the FCRC using Form HFS 2378M1 - Request for a State of Illinois Determination of Eligibility for Extra Help to Pay for Medicare Drugs along with Form HFS 2378M - Application for Payment of Medicare Premiums, Deductibles and Coinsurance.
Extra Help for Persons Who Do Not Receive Medical Benefits
Persons with Medicare who are not eligible for Extra Help as dual-eligible may apply through Social Security. To be eligible they must have income under 150% FPL and must meet the resource limits for Extra Help through Social Security. They can apply online at www.ssa.gov or complete form SSA-1020 Application for Extra Help with Medicare Prescription Drug Plan Costs (available at local Social Security offices).
Choosing a Prescription Drug Plan
Most dual-eligible persons are auto-enrolled for drug coverage by the federal CMS.
Dual-eligible persons who are not auto-enrolled or active in a Medicare Part D plan may be enrolled by the pharmacy through the LINET process. The individual must take their medical card and Medicare card to the pharmacy along with photo identification. With these documents, the pharmacist will be able to confirm eligibility for Medicare Prescription Drug Plan coverage online and initiate enrollment. Using this process, individuals may be enrolled immediately and able to receive needed prescriptions the same day.
Auto-enrollment in a plan may not be the best option for many clients. By choosing a plan, the customer can verify that the plan covers the prescriptions they use for their medical condition(s). To choose a Part D plan, individuals should have a list of their prescriptions for reference and:
- go to www.medicare.gov to enroll; or
- apply by calling Medicare at 1-800-633-4227 (TTY: 1-877-486-2048); or
- call the Illinois Senior Health Insurance Program (SHIP) at 1-800-548-9034 (TTD: 217-524-4872) or email at DOI.SHIP@illinois.gov.
Limited Income Newly Eligible Transition (LINET)
A dual-eligible person can be enrolled in Medicare Part D at his or her pharmacy. Limited Income Newly Eligible Transition (LINET) is also called a POS (Point of Sale) or facilitated enrollment. The pharmacist can immediately enroll an eligible person in a temporary Part D plan administered by Humana. This option is available at most pharmacies and, when requested by the person, the pharmacist can call the HFS Provider Hotline at 1-877-782-5565 (Option 7) for instructions on how to complete LINET enrollment.
- Example: On September 5th, Mary discovers that she can't get her prescriptions filled with her medical card. The caseworker checks MMIS and sees that Mary started receiving Medicare on September 1st. The worker advises Mary to ask for a LINET or POS enrollment at the pharmacy. The pharmacist does the LINET enrollment and Mary is able to immediately pick up her prescriptions. Mary must choose a PDP or she will be auto-assigned a PDP.
Changing a Prescription Drug Plan
Each Part D plan has an approved medication list called a formulary. Every plan is required to carry at least two drugs in every major treatment category. Individuals on Medicare should choose a Part D plan with a formulary that covers all of their prescriptions. This may require the person to consult with his or her doctor to find medications that are covered by their plan. The state medical card does not cover non-formulary prescriptions.
If a person on both Medicare and state medical assistance does not pick a plan, Medicare will automatically assign him or her to a plan. If this plan does not cover all of their prescriptions, they can change plans. Changes in plans are usually effective the month following the month of request.
Part D costs for premiums in excess of the federal base premium and drug copays are allowable medical expenses toward spenddown.
Reconsideration and Appeal
Information on how to request a reconsideration or file an appeal will be in the plan's member handbook or the person can call the plan's telephone hotline.
- Example: Joe begins receiving Medicare and is auto-assigned to a PDP. When he goes to fill his prescriptions, he discovers that two of his medications are not covered by the plan. Joe must apply to his plan for a reconsideration or find a different plan that covers his medications and switch plans for next month. For this month, Joe must pay out-of-pocket for the two prescriptions or apply to the plan for a reconsideration. His medical card will not pay for the prescriptions.
Refunds from Part D Plans
There may be times when a person receiving medical benefits overpays for prescriptions and is due a refund from the Part D plan. This usually occurs:
- between the time the case is approved and when the Part D plan becomes active; or
- when the person was eligible for Medicare Part D for backdating months; or
- when the person pays out-of-pocket for costs that were eligible to be covered by the PDP.
Refunds can include repayment for the monthly premium and the cost of prescription drugs that exceed the co-pay amounts. Customers can obtain a refund by calling their prescription drug plan provider.
- Example: Sam is approved for HBWD and SLIB in August 2013 with backdating to May 2013. HFS sends the electronic message to Medicare. The $30 monthly premium for Sam's PDP stops being taken out of his Social Security Disability check in November 2013. Sam is eligible for a refund for his $30 PDP premium from May 2013 through October 2013 (6 months x $30 = $180). Sam is also entitled to a refund of the prescription costs he paid in excess of the Extra Help co-pay amounts beginning with May 2013.
[signed copy on file]
Michelle R.B. Saddler
Secretary, Illinois Department of Human Services
Director, Illinois Department of Healthcare and Family Services