Why medicare part d passed

In some cases, a single medication may costs hundreds, even thousands, of dollars. Paying for such an expensive drug during the Donut Hole will help move the member toward eligibility for Catastrophic Coverage. However, coming up with this amount of money all at once — even for a critical medication — may be impossible for some people. This not-uncommon scenario means that some people simply do not take their medications during the Donut Hole.

There are programs to help people with their Part D costs, including some that provide coverage during the Donut Hole. Other sources of help include pharmacy discount cards, drug manufacturer Patient Assistance Programs PAPs , and insurance company discount programs. The Donut Hole was gradually phased out between and In subsequent years, gradually increasing discounts were applied to brand name and generic drugs.

Donut Hole Drug Discounts by Year, []. The discounts will be given right at the pharmacy — members will not have to fill out forms or do anything to get the discount.

Members will have to pay a small dispensing fee cost to the pharmacy for filling the drug , which will not be discounted. The full amount negotiated price of brand name drugs not the discounted amount paid by the member , will count toward TrOOP. For generic drugs, only the actual amount paid for the drug will be applied toward TrOOP.

Drugs sold by manufacturers who do not sign an agreement will not be covered under Part D and cannot be requested by exception. The discount is only available if Medicare Part D is the primary payer. If the prescription crosses Part D stages of coverage, i. Beneficiaries experience different cost sharing as they move through these stages. Calculating what the beneficiary owes is complicated and is even trickier when the plan has tiered co-pays instead of the standard benefit. For most people, enrollment in Part D is voluntary.

Most people need to select and enroll in a plan in order to have coverage. There are several Part D enrollment periods. The notice period begins when the plan notifies the member that payment is due.

Enrollment in Part D is generally voluntary, however, some people are required to enrolled, and others should not enroll. Non-LIS eligibles who do not have creditable coverage, and who do not enroll in Part D when they are first eligible to do so, may have a Late Enrollment Penalty and may have to wait up to 12 months to enroll in a plan. Creditable coverage is prescription drug coverage that is as actuarially as good as, or better than, Part D coverage.

Individuals with Medigap policies should check with their plans. Individuals who have creditable coverage are not required to enroll in Part D and may not find it to their advantage to do so. Individuals who involuntarily lose creditable coverage are entitled to a Special Enrollment Period. They have 63 days in which to enroll in a Part D plan.

Non-payment of premium is NOT considered involuntary loss. Unless exempt, there is a penalty for not enrolling in Part D when first eligible to do so. The LEP cannot go back farther than June CMS calculates the penalty amount, which is collected by the Part D plan. There is a process to request reconsideration if a late enrollment penalty appears to be imposed in error.

The penalty must be paid during the time the penalty is being reconsidered, which can take many months. If reconsideration is granted, the beneficiary will be reimbursed for erroneous penalty charges assessed. The most commonly available are listed here. Premiums may be paid directly to the plan, deducted from Social Security, or deduction from a bank account EFT.

Individuals may not belong to more than one Part D plan at a time. In fact, enrollment in one plan automatically cancels out enrollment in the previous plan. For this reason, beneficiaries who want to switch plans need only enroll in their desired plan. Medicare will cancel out their enrollment in their old plan. Note that individuals who wish to remain with their existing plan from one year to the next need do nothing.

Shortly after enrolling in a plan, new members should receive a member card and a contract called the Evidence of Coverage EOC. People should not assume that their existing plan will meet their needs or remain an appropriate choice in subsequent years. This is because plans make changes to their costs and coverage every year. It is not unexpected for costs to increase, but people may not realize that plans can also remove drugs from their formularies, or change the pricing of certain drugs, or impose utilization management restrictions such as prior authorization, quantity limits and step therapy on their drugs in the next year.

For example, some states have raised or eliminated the asset test and have significantly increased unearned income disregards as a means of effectively raising program income limits. Interested individuals should contact their state Medicaid agency for more information and applications. Some people automatically qualify for the LIS and do not have to apply for the program, regardless of their income or asset levels.

Calculation of income and assets follow SSI rules. Individuals deemed eligible for the LIS between January 1 and June 30 are deemed eligible for the rest of the year.

Notices of eligibility if the subsidy is reduced or terminated go out in the fall. Dual eligibles and all other LIS-eligibles have a continuous SEP that allows them to enroll in more compatible plans at any time. Enrollment in the new plan is effective the first day of the month following the month of enrollment. Newly granted duals are created when Medicaid recipients become eligible for Medicare. To ensure that newly granted dual eligibles have Part D coverage, states forward twice monthly electronic data files to CMS.

CMS then enrolls these individuals to the temporary NET plan, pending their ultimate prospective random assignment to a benchmark plan in about two months time. The process of enrolling full dual eligibles in a Part D plan is called auto-enrollment. Newly granted duals are also created if a Medicare beneficiary becomes eligible for Medicaid. Unlike full duals who are enrolled in a temporary plan NET and then are randomly assigned to benchmark plans , other LIS eligibles are enrolled directly into a benchmark plan through the random assignment process.

LIS eligible individuals should be auto-enrolled or facilitated enrolled into a Part D plan of they do not select a plan on their own. These processes generally work very well. If the pharmacy has reasonable assurance that the individual qualifies for the LIS, and has no other prescription drug coverage, the pharmacy can immediately fill the prescription s and bill the claim to NET. The pharmacy can confirm LIS eligibility through an on-line query or may accept other reasonable documentation, such as but not limited to a copy of a current Medicaid award letter with effective dates and a notice from Medicare or SSA awarding Extra Help.

NET has an open formulary, with no utilization management restrictions on any drugs, and no pharmacy network restrictions. State Pharmacy Assistance Programs are state-funded prescription drug assistance programs dual-eligibles and other low-income residents. All Part D plans must have an appeal process through which members can challenge a denial of drug coverage.

If the request for coverage is denied, the member may proceed to further levels of appeal, including redetermination by the plan, reconsideration by an Independent Review Entity Maximus , Administrative Law Judge ALJ review, the Medicare Appeals Council MAC , or federal district court.

There are two types of exceptions that may be requested:. Formulary Exceptions — This type of exception is requested because the member:. Members may not request an exception to obtain an excluded drug. Excluded drugs include but are not limited to erectile dysfunction drugs, drugs for weight loss or gain and drugs for the symptomatic relief of cough. Tiering Exceptions — This type of exception is requested because the member needs a non-preferred drug at the lower cost-sharing terms applicable to drugs in a preferred tier.

Further, members may not ask for a tiering exception for high cost and unique genomic and bio-tech products, if the plan maintains a separate tier Tier 4 or 5 for these drugs.

These two caveats essentially mean that member can only ask to receive a Tier 3 non-preferred drug and Tier 2 preferred prices. Without support from the prescriber physician or other provider , the exception will not go forward. The importance of the medical statement of support cannot be overemphasized. The statement need not be lengthy, but it must be specific as to why the prescribed drug is medically necessary at the prescribed dosage.

Diagnosis must be provided. If the drug is being denied because a step therapy requirement, the statement should indicate which formulary alternatives the member has tried and failed, including dates and length of treatment and the reason the drug failed. The allocation of costs in each benefit phase was spelled out in the Medicare Modernization Act of the law establishing the Part D program , and has been modified through subsequent legislation.

In , Medicare Part D enrollees are facing a relatively large increase in out-of-pocket drug costs before they qualify for catastrophic coverage Figure 2. This is due to the expiration of the ACA provision that constrained the growth in out-of-pocket costs for Part D enrollees by slowing the growth rate in the catastrophic threshold between and ; in and beyond, the threshold will revert to the level that it would have been using the pre-ACA growth rate calculation. Part D enrollees will also face higher out-of-pocket costs in for the deductible and in the initial coverage phase, as they have in prior years.

For non-LIS Part D enrollees who take only brand-name drugs and whose annual total drug costs reach the catastrophic coverage limit, these changes in the Part D benefit amounts will increase their annual out-of-pocket costs. Costs for Part D plan sponsors and drug manufacturers will also increase in dollar terms—but in terms of the share of total drug costs up to the catastrophic threshold, Part D plan sponsors will pay a smaller share in than in , while manufacturers will pay a larger share Figure 3.

Under current law, Part D plan liability for drug costs are expected to rise in dollars during the coverage gap phase, but their liability for catastrophic coverage could potentially decline. This change, alone would increase premiums to the extent that it increases plan liability.

Both basic and enhanced benefit plans vary in terms of their specific benefit design, coverage, and costs, including deductibles, cost-sharing amounts, utilization management tools i. Plan formularies must include drug classes covering all disease states, and a minimum of two chemically distinct drugs in each class. Enrollment in Medicare Part D plans is voluntary, except for beneficiaries who are eligible for both Medicare and Medicaid and certain other low-income beneficiaries who are automatically enrolled in a PDP if they do not choose a plan on their own.

Another 1. Other beneficiaries are subject to both an income and asset test and need to apply for the Low-Income Subsidy through either the Social Security Administration or Medicaid. Federal law currently prohibits the Secretary of Health and Human Services from interfering in drug price negotiations between Part D plan sponsors and drug manufacturers.

The monthly premium paid by enrollees is set to cover Medicare subsidizes the remaining Higher benefit spending above the catastrophic threshold is a result of several factors, including an increase in the number of high-cost drugs, prescription drug price increases, and a change made by the ACA to count the manufacturer discount on the price of brand-name drugs in the coverage gap towards the out-of-pocket threshold for catastrophic coverage; this change has led to more Part D enrollees with spending above the catastrophic threshold over time.