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December 5, 2006

CaliforniaLow-Income Health

Advocate Alert

On Medicare Part D

More information on Medicare Part D, including past Alerts, can be found at www.cahealthadvocates.org/cmc/index.html website, and http://www.nsclc.org/areas/medicare-part-d.

Part D Figures - 2007

• California Benchmark Premium: $21.03

-- standard Part D premium covered by the Low-Income Subsidy

• National Average Premium: $27.35

-- amount that Part D premium penalty is based upon

Part D Standard Benefit

Reproduced from CMS Presentation 11/06

For a summary of all Medicare premiums and deductibles for 2007, see the Center for Medicare Advocacy's 9/18/06 Alert found at: http://www.medicareadvocacy.org/Medicare_2007Rates.htm

I. State Update

Recap of LIS Redetermination, Redeeming and Reassignment for 2007

As reported in previous Alerts, some Part D participants who received the Low-Income Subsidy (LIS) in 2006 may need to take immediate action in order to continue receiving the subsidy in 2007. Read below for more details.

CMS Redeeming

In the early fall, the Center for Medicare and Medicaid Services (CMS) conducted a redeeming process to review LIS eligibility of individuals who automatically obtained the LIS in 2006 because they were dual eligibles, participated in a Medicare Savings Program (i.e., QMB, SLMB, QI) or received SSI. During this process, CMS identified 632,532 beneficiaries nationwide who, because of a change in their Medicaid eligibility, no longer automatically qualify for the Low Income Subsidy. Approximately 85,000 of these beneficiaries are in California. These individuals have not been "redeemed" and, therefore, will not receive the LIS in 2007 unless they take action.

Individuals who were not "redeemed," as well as those who will be redeemed at a different subsidy level (lower or higher co-payments), should have received letters from CMS in early fall. In addition to the CMS notices, California beneficiaries that were not "redeemed" will receive notices from the Department of Health Services informing them that they must take action to maintain their LIS benefits.

Beneficiaries who have not been redeemed need to either re-qualify for Medi-Cal or apply for the Low-Income Subsidy at the SSA or a local Medi-Cal office. Those beneficiaries who have Medi-Cal with a share-of-cost (SOC) and who meet that share-of-cost at any time before December 31, 2006, will automatically get LIS for all of 2007. Beneficiaries who meet their SOC in 2007 will be eligible for the LIS from the month they meet their SOC through the remainder of 2007.

SSA Redetermination

The Social Security Administration conducted a similar review process called redetermination for individuals who applied and were found eligible for the LIS in 2006. This was a primarily passive process, so most individuals were not required to take any action to maintain their eligibility. SSA has sent a redetermination form called the SSA Form 1026-B to individuals whose household size, income or assets may have changed. Individuals who received Form 126-B must complete and return it to SSA in order to determine whether they will get the LIS in 2007.

For detailed information about redeeming and redetermination, see NSCLC's guide for advocates, "The Low Income Subsidy: Redetermination and Redeeming," available online at http://www.nsclc.org/areas/medicare-part-d/area_folder.2006-09-28.4596471630.

"Member Continuity" Policies: "Grandfathering" of LIS Individuals who are Reassigned

As discussed in previous Issue Alerts, in California, Low Income Subsidy beneficiaries in four of the ten 2006 benchmark plans will be reassigned to a new benchmark plan because the 2006 plan either will no longer exists or will have a premium more than $2 above the benchmark in 2007. Fortunately, the plans involved have created policies to help transition these reassigned beneficiaries to their new plans, however the details of these plans have not yet been shared with plan members or advocates.

United Owned Plans

All LIS beneficiaries enrolled in United Health Rx, PacifiCare Saver and AARP MedicareRx Plan (by some estimates over 250,000 Californians) will be reassigned to AARP MedicareRX Plan Saver. United, the company that sponsors AARP MedicareRx Plan Saver, has created a "member continuity" policy to help transition reassigned beneficiaries to their new plan. Per this policy,

• Formulary, quantity limit, step therapy or tier exceptions the member received in their 2006 plan will continue to be honored in 2007 by the 2007 plan (AARP MedicareRX Plan Saver).
• Prior Authorizations the member received in 2006 will be honored in 2007, unless the drug in question is intended for short term use only.
• Medicare B v. D coverage determinations made in 2006 will also be honored in 2007.
• Members that utilized a drug in 2006 that, for 2007, requires new Step Therapy will be granted continued access to the drug and will not have to go through the new Step Therapy requirements.
• Members that utilized a drug in 2006 that has a new quantity limit in 2007 will be granted continued access to the drug and will not have to ask for an exception if they used the drug in 2006 in a quantity that exceeds the new limit.
• Multi-source drugs used by member will be covered through 2007.

This "member continuity" policy has not yet been shared by United with members nor has United provided, to advocates, its plan for sharing this policy.

HealthNet Orange Plans

LIS beneficiaries who were auto-enrolled into Health Net Orange Option 2 (a.k.a. 008) will be reassigned to Health Net Orange Option 1 (a.k.a. 002). This represents roughly 60,000 beneficiaries statewide. Individuals who self-enrolled into Health Net Orange Option 2 (008) will not be reassigned. Unless they take action, they will remain in the plan and will be liable for a premium of $5.97 (if they are full premium subsidy eligible; if they are only eligible for a partial premium subsidy, the $5.97 will be in addition to their normal premium liability). This represents an additional 20,000 individuals statewide.

Representatives from HealthNet, Inc. have assured advocates that it would also implement a "member continuity" policy for LIS beneficiaries who are reassigned to Health Net Orange Option 1 (002). However, the full details of this policy have not yet been shared nor has HealthNet shared any plans for providing information about the policy to plan members.

II. Federal Update

Plans' Annual Notices of Change (ANOCs) Sent Out, But May be Confusing to Low-Income Enrollees

During the open Annual Enrollment Period for Medicare Part D beneficiaries, all beneficiaries should carefully review their proposed 2007 coverage, and assess their prescription drug, pharmacy access, and other Part D needs. In the early weeks of November, all enrollees in Medicare Part D should have received the Annual Notice of Change (ANOC) from their current Part D plan. For stand-alone plans (PDPs), the ANOC describes changes to the plan's costs (premiums, deductible, cost sharing), formulary (the drugs covered as well as changes in utilization management) and coverage (types of drugs, if any, available in the "doughnut hole") for 2007; most plan sponsors have created a standard ANOC for each plan. Medicare Advantage plans with Medicare Part D (MA-PDs) will also send out standardized ANOCS that describe Part D as well as other health coverage. Because plans are allowed to change each year, these letters are very important. Unfortunately, they are also filled with confusing and misleading information, and, in some cases, they omit important information.

Low Income Subsidy recipients (LIS, or "extra help") face a particularly tough time getting the information they need from the ANOCs. This is because, despite advocacy efforts, CMS does not require plans to send customized ANOCs to low income beneficiaries. Instead, LIS beneficiaries get the same standardized ANOC sent by each plan to non-LIS beneficiaries which describe full price premiums, copayments and deductibles. Most ANOCS only have a small section, usually several pages into the letter, describing the costs an individual with "extra help" will pay during 2007. In the model ANOC, subsidy information is extremely difficult to understand, as it is provided in a generic chart, with no individually tailored information. LIS beneficiaries may become alarmed at the premiums mentioned at the beginning of the letter, and not be able to read through several pages of text, remember the cost sharing amounts they paid for 2006 and then calculate their 2007 Part D costs. This onerous task is practically impossible without assistance from experts since even most consumer advocates are stumped by these notices.

Further, individuals who are being reassigned to new plans, also receive standard plan ANOCs. In some cases these ANOCs provide information about changes to the beneficiary's current plan. In other cases, the CMS has allowed plan ANOCs to provide information about the plan into which the beneficiary will be reassigned without an explanation of the change in plans, making it extremely difficult, if not impossible, for the beneficiary to understand what is going on. For example, beneficiaries in California reassigned within HealthNet Orange, Inc, will receive an ANOC which actually describes the plan they are being reassigned to (Option 1, 002), not the plan in which they are currently enrolled (Option 2, 008). Nowhere on the notice is the individual told, in plain language, that the reason they are receiving information about Option 1 is that they are being automatically reassigned to that plan by CMS. Beneficiaries reassigned to AARP MedicareRx Plan Saver will receive information about that plan instead of information about changes to their 2006 plan. The information from AARP will be accompanied by a letter explaining the reassignment.

Adding further to the confusion is the fact that the ANOC is just one of the many notices that Part D beneficiaries have received or will be receiving this Fall. Along with the ANOC, many beneficiaries receive the Medicare & You handbook and numerous plan marketing materials, as well as separate notices regarding their LIS eligibility, reassignment and premium withholding errors. Some states are sending out separate letters as well.

Beneficiaries should carefully review the ANOC and other plan options to determine whether, given the changes for 2007, their current plan remains their best option for 2007 (see related story below re: advocates complaint to CMS about failing to advise people to see how their current plan's benefits are changing next year). Since many of the ANOCs contain confusing or misleading information, it is important to not rely on the ANOC alone.

Updates on Medicare Plan Finder

Ongoing Problems

CMS' online Plan Finder (http://www.medicare.gov/MPDPF/home.asp) continues to receive mixed reviews; some advocates find that added features have improved the tool, while others are frustrated by ongoing glitches. On the November 28, 2006 MMA Forum Call, CMS officials explained certain features of the Plan Finder that may have puzzled users:

• Some Plan Finder users have found that the tool's estimated out-of-pocket costs vary from week to week, sometimes substantially, and that these variations can change an enrollee's recommended 2007 drug plan. CMS officials explain that because market drug prices vary, the out-of-pocket costs for an individual who pays a percentage of their drug cost will also change. The Plan Finder's drug prices are updated every two weeks to reflect changes in market costs.
• Some Plan Finder users who attempt to compare plans for users with many prescriptions per month have been faced with an error message stating that pricing data for the selected plans was temporarily unavailable. CMS does not know why this error occurs, and suggests that users who receive an error message contact CMS with information about Internet browser, type of connection and search parameters. Some advocates have discovered that they cannot run the Plan Finder on a Mac, or using the Safari internet browser.
• When entering information about clients with creditable coverage or no plan in 2006, the Plan Finder automatically (and erroneously) defaults to showing that person as enrolled in a Medicare Advantage plan. CMS officials say they are "working to address" this problem. In the meantime, they state that users can toggle back to change the designation from a link at the top of the screen.

Cost-sharing in Special Needs Plans (SNPs) Not Accurately Reflected

Special Needs Plans (SNPs) are a type of Medicare Advantage (MA) plan that are available to individuals who meet the definition of a "special needs individual", including dual eligibles, individuals who are considered institutionalized, and certain individuals with chronic and disabling conditions (see, e.g., 42 CFR §422.2). See the last Issue Alert for discussion of the "passive enrollment" of all current dual eligible members of Kaiser into Kaiser's Special Needs Plan.

Although individuals enrolled in SNPs, particularly dual eligibles, generally pay little cost-sharing, advocates report that the Medicare Plan Finder does not reflect this lower cost-sharing for dual eligibles (for example, it will show that a SNP for dual eligibles has premiums, a deductible, and Part D cost-sharing that is typical for a non-LIS enrollee). If the link entitled "View Important Notes" is clicked, a message will appear that states: "This plan is a Medicare Special Needs Plan for people with both Medicare and Medicaid. The amount you must pay for benefits may be less than what is shown here. Contact the plan for details."

Apparently, the information in the Medicare Plan Finder reflects bid amounts that the plan sponsor submitted to CMS, not the actual cost-sharing that plan enrollees must pay. According to one source, the information in the Plan Finder cannot be changed for 2007, and will hopefully be addressed by 2008.

Recap of Special Enrollment Periods (SEPs) for Low-Income Individuals

While many Medicare beneficiaries are restricted to making Part D plan choices to the current Annual Enrollment Period, individuals enrolled in the Low Income Subsidy (LIS) have additional options to change their Part D plans.

Individuals who are fully dual eligible, along with Medicare Savings Program enrollees, have an ongoing Special Enrollment Period (SEP) right to change plans on a monthly basis. Individuals who lose their dual eligibility are entitled to an SEP beginning the month they lose eligibility plus 2 additional months after. Dual eligibles with a share of cost (SOC) are only considered "full" dual eligibles the month they meet/incur their SOC. If a dual with an SOC who has met/incurred his/her SOC does not do so in the following month, s/he is entitled to the SEP available to duals who lose their dual eligibility (as just described).

In addition, all individuals who do not automatically receive the LIS (as a full dual or MSP enrollee) are entitled to at least one of the following SEPs.

SEPs related to the LIS:

1. Similar to 2006, individuals who become eligible for the LIS in 2007 will have 1 opportunity to choose a Part D plan. If the individual does not choose a plan before CMS facilitates enrollment of the individual into a plan, the individual retains 1 opportunity to make a change under this SEP.

2. NEW for 2007: Individuals who already had LIS prior to January 1, 2007 will have 1 opportunity in 2007 to enroll into or disenroll from a Part D plan. This SEP extends throughout 2007. Individuals who fall into this category include those who qualified in 2006 and continue to qualify in 2007.

3. Also, individuals who lose their low-income subsidy eligibility as of January 1, 2007, as a result of the LIS re-determination process also have an SEP. This SEP runs from January through March 2007 and allows for 1 enrollment election.

[link to 11/22/06 CMS Memo - can't find online]

For more information on Part D enrollment periods, including SEPs, see CMS' PDP Enrollment Guidance, available at: http://www.cms.hhs.gov/PrescriptionDrugCovContra/Downloads/CurrentPDPEnrollmentGuidance.pdfIn addition, CMS has recently released a chart outlining SEPS available to Part D enrollees, available at: http://www.cms.hhs.gov/partnerships/downloads/PartDSEPs.pdf

As discussed below, California Health Advocates and the Center for Health Care Rights will be conducting a webcast on Part D and Medicare Advantage enrollment periods on December 14^th, 2006.

Advocates Urge CMS to Explain Changes in 2007 Plans

On November 26, 2006, the Sunday of Thanksgiving weekend, CMS placed a full page advertisement in Parade Magazine, a publication reaching more than 78 million readers and distributed by more than 370 Sunday newspapers. The advertisement, in addition to other CMS materials, provided misleading information that gives Medicare beneficiaries a false sense of security regarding their future prescription drug coverage under Medicare Part D.

The ad advises beneficiaries to review their current health and prescription drug plans for 2006 and "take no action" if they are satisfied. Yet the ad fails to mention that many plans are changing in 2007 with those changes affecting a substantial number of Medicare beneficiaries, including many low-income-subsidy ("LIS") recipients. As Alert readers know, all beneficiaries should review changes within their plan to ensure they will continue to be able to obtain their prescription drugs in 2007 without unexpected increases in cost or new restrictions. Unfortunately, neither the Parade Magazine ad nor other CMS materials advise beneficiaries to examine the benefits their current plan will offer in 2007 to ensure their needs will still be met.

Advocates' collective concerns prompted the Center for Medicare Advocacy, Inc., National Senior Citizens Law Center, and Families USA to send a letter voicing their concerns to Abby Block, Director of the Center for Beneficiary Choices at CMS. In the November 28, 2006 letter, the advocates cite the Parade Magazine ad as providing inaccurate and misleading information. The letter explains that an overwhelming majority of beneficiaries may need to change their plans for 2007, regardless of whether they are satisfied with their current coverage. The letter urges CMS to advise beneficiaries to closely scrutinize plan changes and emphasize that plans will change in 2007 and annually thereafter. To facilitate smooth enrollment and prevent any disruptions in coverage, the letter also requests that CMS create a Special Enrollment Period from January 1 through March 31 for all Medicare beneficiaries so that all individuals whose plans do not meet their needs in 2007 can make a one-time change.

A copy of the letter is available in the Medicare Part D section of NSCLC's website at http://www.nsclc.org/areas/medicare-part-d.

III. Information for Advocates

Upcoming Webcast by California Health Advocates and the Center for Health Care Rights on Part D and Medicare Advantage Enrollment Periods -- 12/14/06

Participate in a free webcast provided by California Health Advocates (CHA) and the Center for Health Care Rights (CHCR) onThursday, December 14, 2006 - 10:00 a.m. - Noon.

CHA and CHCR will review the various Medicare enrollment periods for Medicare Advantage and Part D plans, and discuss the practical experience direct service providers have had trying to exercise enrollment period rights on behalf of their clients.

To register, and for more information, contact Jasmine Gutierrez at CHA, at (916)231-5110 or at jgutierrez@cahealthadvocates.org

This webcast is supported by a grant from the California HealthCare Foundation, based in Oakland, California.

Announcement from CHA

CHA is pleased to announce the following California Medicare Coalition schedule of events:

December 6 - California Medicare Coalition Meeting at the Office of the Patient Advocate in Los Angeles from 10:00 a.m. to Noon.

December 7 - California Medicare Coalition Medicare Regional Forum at The Campbell Community Center in Campbell from 10:00 a.m. to Noon.

December 13 - California Medicare Coalition Meeting at the West Berkeley Family Practice-Auditorium in Berkeley from 10:00 a.m. to Noon

For more information on these upcoming events or to join the California Medicare Coalition please visit CHA's website: http://www.cahealthadvocates.org/cmc/events.html or call Jasmine Gutierrez, Operations Manager at (916) 231-5110.

Keep Those Stories Coming

The adverse publicity regarding the problems that dual eligibles are facing is helping to get the changes we need at the state and federal levels. We need to keep our client stories in the press to get more permanent relief. Please help us by identifying clients or their family members who are willing and able to talk to the press, or willing to be named plaintiffs. We are particularly interest in hearing stories about language access, recent problems enrolling in 2006 plans, and initial experiences with the 2007 plans. Send stories and contacts to kprindiville@nsclc.org or arich@nsclc.org. An optional form is available at: www.nsclc.org/news/06/partd_stories2_.pdf.

You can also share stories, lodge complaints, ask questions and exchange ideas about Medicare Part D on CHA's Medicare Part D Community Discussion page on their web site at: http://www.cahealthadvocates.org/partd/index.html. The site is designed to benefit the Health Insurance Counseling and Advocacy Program (HICAP) network, health consumer assistance organizations, community-based agencies and other individuals who are assisting Medicare beneficiaries and their families with Part D related problems, issues or questions. Bob Rosenblatt, the site's moderator and content developer, is a former Los Angeles Times Washington correspondent for over 26 years and currently, among other things, a columnist on health policy issues with the California HealthCare Foundation.

More information about Medicare Part D is posted on www.calmedicare.org, and on the main page and California page of the NSCLC website, which you can view at http://www.nsclc.org/areas/medicare-part-d. We will continually post new training materials as this program develops. Other helpful websites: Center for Medicare Advocacy at www.medicareadvocacy.org; Health Consumer Alliance at www.healthconsumer.org; Families USA at www.familiesusa.org; Medicare Rights Center at www.medicarerights.org; California Health Advocates at www.cahealthadvocates.org; California HealthCare Foundation at www.chcf.org/topics/healthinsurance/drugbenefit; Health Assistance Partnership at www.healthassistancepartnership.org; and Kaiser Family Foundation at www.kff.org/medicare.

For more information, call or e-mail NSCLC or CHA:

California Health Advocates

David Lipschutz

dlipschutz@cahealthadvocates.org

(213) 381-3670

National Senior Citizens Law Center

Jeanne Finberg, (510) 663-1055

Katharine Hsiao - khsiao@nsclc.org

Georgia Burke - gburke@nsclc.org

Kevin Prindiville - kprindiville@nsclc.org

Anna Rich - arich@nsclc.org

This Alert is provided by California Health Advocates in partnership with National Senior Citizens Law Center with support from The California Endowment