Medicare Part D

1. Medicare Part D Pat MacClarence, AM, LCSW University of Chicago Medical Center Outpatient Senior Center Ethnogeriatrics and US Healthcare System MEDC 60803 Course Co-Director

2. Goals • Understand the relevance of poverty in senior population • Understand the basics of Medicare D • Be able to describe Medicare Part D to your grandmother

3. What is Poverty? • Poverty: state of one who lacks a usual or socially acceptable amount of material possessions or money.1 • Absolute poverty • Relative poverty • 2009: 13.3% of Americans; 43.6 million people lived in poverty 2 1 Zweig, Michael (2004) What's Class Got to do With It, American Society in the Twenty-first Century. ILR Press. War on Poverty definition 2 US Census Bureau

4. Poverty Guidelines • What is a poverty guideline? Numbers generated by DHHS • Why dopoverty guidelines exist? Used to determine program eligibility for federal and state programs Examples: • AIDS Drug Assistance Program • Community Care for Seniors (homemaker service, adult day care) • Head Start • Legal Services for the Poor • Low Income Heating and Energy Assistance Program (LIHEAP)

5. Medicare Part D:Background Medicare Prescription Drug, Improvement and Modernization Act [signed by George W. Bush December 2003, effective January 1, 2005] was the legislation that created Part D Who is eligible: Every person eligible for Medicare is eligible for Medicare D Basic idea: Voluntary program designed to provide significant relief from the often prohibitive costs of medication How did they execute this? Initial bumps in the road! -

6. Medicare Part D:Signing Up How it works • Insurance Companies: create Medicare D plans to include at least 2 drugs in each major category • Patients: pick a plan based on their personal drug profile • Cost comparison - Annual deductible, monthly premium, individual drug co-pays Issues • Can you identify issues that may have arisen?

7. Medicare Part D:Social Security Extra Help Purpose • Additional assistance with med costs to seniors with limited income. Covers • Annual deductible • Monthly premiums • Lower set costs of medication co-pays Issues/barriers • Another application • Suspicion • Toss or ignore the mail • Completely directed to seniors – junk mail, illiteracy, dementia…

8. Medicare D Chart Annual deductible Initial coverage The Donut Hole Catastrophic coverage

9. More about the Donut Hole… • Extra assistance: • For dual-eligible patients • Illinois Cares Rx program • Recent and anticipated changes due to Affordable Health Care Act: • 2011 change: 50% subsidy name brand and 7% subsidy generic drugs • 2012 change: up to 14% subsidy of generic drugs • 2020: constant coverage, no periods of non-coverage

10. Standard Medicare Prescription Drug Coverage & Costs - 2012 [Medicare Prescription Drug Improvement and Modernization Act (signed December 2003, effective January 1 2005)] a TrOOP: True out of pocket expense or $4,700 in 2012 b The amount Medicare drug coverage pays before the catastrophic coverage = $2,290 c $320 (deductible) + (($2930-$320)*25%) (initial coverage) + (($6657.50-$2930)*100%) (coverage gap) = $4,700 Max OOP pre catastrophic coverage

11. Mr. Washington’s Medicine expenses by month for 2012with AARP MedicareRx Preferred Medicare D Plan • Annual Deductible: 0-$320 • Mr. Washington’s Deductible: $0 • Monthly Premium: 0-$48/month • Mr. Washington’s monthly Premium: $34.20 • Monthly Medication cost $168 • Annual cost for Mr. Washington: $2,860.08 medication + $410.40 premiums TL $3,270.48 • Donut Hole begins at $2,930