ElderWeb

The Centers for Medicare and Medicaid (CMS) announced the expected premiums for the 2006 Medicare Prescription Drug coverage plans. The average costs (by region) are as follows:

PDP Region	States	Number of Stand - Alone Prescription Drug Plans Based on Monthly Beneficiary Premiums				Number of Organizations Offering Stand-Alone Drug Plans	Weighted Average Monthly Beneficiary Premium for Prescription Drug Plans
		< $20.00	$20.00 - $24.99	$25.00 - $29.99	$30.00 - $34.99
1	NH, ME	1	3	6	12	18	35.69
2	CT, MA, RI, VT	4	6	5	11	18	30.53
3	NY	6	7	6	16	21	32.45
4	NJ	4	4	6	14	19	32.09
5	DE, DC, MD	3	5	4	15	21	33.63
6	PA, WV	2	5	6	16	23	32.78
7	VA	2	3	2	14	18	34.19
8	NC	2	2	1	11	16	36.86
9	SC	1	4	6	16	20	34.89
10	GA	1	7	2	16	18	33.17
11	FL	4	3	3	14	20	33.01
12	AL, TN	1	3	6	14	18	33.29
13	MI	1	3	6	16	18	33.22
14	OH	3	5	6	14	20	32.89
15	IN, KY	1	6	3	12	18	35.85
16	WI	4	5	6	15	18	31.49
17	IL	1	6	8	14	17	31.85
18	MO	2	4	6	11	17	33.30
19	AR	2	1	4	14	16	35.45
20	MS	2	1	4	11	16	36.39
21	LA	1	1	6	13	17	36.85
22	TX	2	4	6	17	21	32.63
23	OK	2	2	2	12	17	35.75
24	KS	2	3	6	13	16	33.12
25	IA, MN, MT, ND, NE, SD, WY	4	5	6	13	17	32.86
26	NM	6	3	9	15	18	29.02
27	CO	3	3	9	14	18	28.52
28	AZ	4	4	10	14	19	28.08
29	NV	3	6	6	14	19	30.32
30	OR, WA	5	5	7	13	21	30.05
31	ID, UT	3	2	5	15	19	33.65
32	CA	6	6	10	18	19	25.41
33	HI	3	2	7	13	12	27.44
34	AK	0	4	4	6	11	34.66

I've developed a tool to help you see how you would be affected by the new Medicare prescription drug benefits that start in 2006. This tool was developed using Medicare Rx Plan Partner Outreach materials prepared by the Centers for Medicare and Medicaid (CMS). It was designed to mirror the call center process by asking questions and presenting selected information based on the response to those questions. After each question you will either see some information related to the answer you chose, or more questions designed to futher refine the information that is relevant. At the end of the process you will see a link to a printable page that summarizes everything related to the options you chose. View the tool at http://www.elderweb.com/medicare/?PageID=3130

Answer a few questions below to create a personalized information page about the new Medicare Drug Insurance Plan which will become available starting in January of 2006.

The Centers for Medicare and Medicaid Services (CMS) have issued guidance that low-income seniors who apply for the new Medicare Prescription Drug program may get help with drug costs, but could have food stamp and other federal benefits reduced. It appears that recipients will not lose as much in benefits as they gain in reduced medical expenses, but they will not see the net out-of-pocket gain they may have been expecting, and may have a rude shock ahead when they find out their food stamps or other benefits are reduced.

A fact sheet on the interplay of the drug benefit with other federal means-tested programs states that every $1 increase in income from reduced drug costs could reduce food stamp benefits by about $.30, and also reduce HUD housing assistance by another $.30. The increased income could also impact eligibility for Medicaid and Supplemental Security Income (SSI).

The exact impact will vary depending on a variety of factors, so I have reproduced part of a CMS fact sheet on the effect of the drug benefit on food stamps that further explains the effect on food stamps:

Question: Will I lose my food stamp benefits if I apply and qualify for extra help paying for the new Medicare prescription drug coverage?

Answer: With the extra help for Medicare prescription drug coverage, you may see your food stamp benefits go down as you spend less on drugs. Using the extra help means you will have more cash to spend on food and other things that you used to spend on prescription drugs. If you get the $10 minimum food stamp benefit, your benefits may end. However, the extra cash you will have available to spend on food and other things makes up for not getting as much in food stamps.

Question: I'™m receiving food stamps now and have claimed a deduction for my medical costs. Do I have to report a change in my medical expenses if I get extra help?

Answer: No, you don'™t have to report changes in your medical expenses until you file to renew your food stamps. Of course, if your medical expenses go up for any reason, you may report the increased cost at any time.

Question: How might my food stamp benefits be affected if I qualify for extra help?

Answer: Mrs. Smith gets Medicare'™s extra help: her monthly prescription drug bill is $200. Mrs. Smith has Medicare, lives alone, and receives $798 per month in Social Security benefits. She doesn'™t receive Medicaid. She receives both food stamps and HUD housing assistance. She regularly pays $250 monthly for medical expenses, $200 of which is for 3 prescription drugs. Her HUD subsidized rent is $162 a month.

Under the Medicare prescription drug plan, Mrs. Smith will pay no monthly drug plan premium, no deductible, and her co-payments for her 3 prescription drugs total $9. Her monthly medical spending is now $59 ($50 for other medical bills + $9 for drug co-pays) for a monthly savings of $191. Because Mrs. Smith'™s out-of-pocket medical costs have gone down, her food stamps will be $5 less than they were when she paid for all of the cost of her prescriptions out of pocket and her HUD subsidized rent will increase by $57 to $219 a month. Even though her food stamps decreased and her HUD subsidized rent increased, she has $129 more cash in her pocket each month.

Example: Mr. Jones gets extra help, his monthly drug bill is $51. Mr. Jones is just like Mrs. Smith except his monthly drug bill is lower and he does not get HUD housing assistance since he owns his own home. He has Medicare, lives alone, and receives $798 per month in Social Security benefits. He doesn'™t receive Medicaid. He regularly pays $147 monthly for medical expenses, $51 of which is for 3 prescription drugs.

Under the Medicare prescription drug plan, Mr. Jones will pay no monthly drug plan premium, no deductible, and his co-payments for his 3 rescription drugs are $3 each. His monthly medical spending is now $105 $147-$51+$9=$105) for a monthly savings of $42. Because Mr. Jones' out-of-pocket medical costs have gone down, his food stamps will be $17 less than they were when he paid for all of his prescriptions out of pocket. But he still has $25 more cash in his pocket ($42 medical savings less $17 decrease in food stamps).

PRESS RELEASE

Aging Network Launches National Education Effort on the Medicare Rx Transitional Assistance Credits as Deadline to Sign-up Approaches

The outreach campaign will target low-Income seniors who are eligible for $1,200 in prescription drug assistance credits through 2005; deadline to sign-up for first $600 is December 31, 2004

Washington, D.C. '“ Today, the National Association of Area Agencies on Aging (n4a) and the National Association of Sate Units on Aging (NASUA) launched a series of outreach and education events as part of the Aging Network Medicare Rx Outreach Campaign involving State and Area Agencies on Aging across the nation. During November and December, these agencies will be hosting events where Medicare beneficiaries can learn more about the Medicare-approved discount drug cards available and receive on-site enrollment assistance.

Any Medicare beneficiary who is not enrolled in Medicaid is eligible to sign-up for one of the discount drug cards. In addition, low-income seniors are eligible for $1,200 in transitional credits to assist them with their prescription drug costs over the next 14-months. The campaign will target communities with a high population of low-income seniors. Medicare has estimated that approximately 7.4 million beneficiaries are eligible for the credit, however to date less than 2 million have enrolled so far.

State and Area Agencies on Aging will also participate in a coordinated outreach effort through their Aging Information & Referral/Assistance (I&R/A) Programs aimed at reaching low-income Medicare beneficiaries with a single concise message about the Medicare transitional assistance credit available in 2004 and 2005. The I&R/A outreach campaign is an intensive effort from November 15 through December 15, 2004, intended to demonstrate the capacity of the aging I&R/A system to reach out to consumers and facilitate their access to needed programs.

During the Aging Network Medicare Rx Outreach Campaign, ten target site events will take place in:

* Atlanta, GA Atlanta Regional Commission and Georgia Division of Aging Services (12/4);

* Baltimore, MD Baltimore City CARES and Maryland Department of Aging (11/24);

* Buffalo, NY Erie County Department of Senior Services and New York State Office for the Aging (12/2-3);

* Columbus, OH Central Ohio AAA and Ohio Department on Aging (11/10);

* Detroit, MI Detroit AAA and Michigan Office of Services to the Aging (11/29);

* Jackson, MS Central MS Planning and Development District/AAA and Mississippi Council on Aging, Division of Aging and Adult Services (11/17-18);

* Phoenix, AZ AAA, Region One and Arizona Aging & Adult Administration (11/18);

* Raleigh, NC Triangle J AAA and North Carolina Division of Aging Department of Health and Human Services (10/26);

* Rio Grande Valley, TX Lower Rio Grande Valley AAA and Texas Dept. of Aging & Disability Services (11/16-18);

* Seattle, WA Seattle County Aging & Disability Services and Washington Aging & Disability Services, Department of Social and Health Services (11/13).

In addition to these target sites, many other State and Area Agencies on Aging around the country will also be holding education events during November and December in an effort to ensure that every low-income senior is aware of their options and how to go about signing-up before the December 31 deadline.

'œDuring the past five months state and local aging agencies have been working diligently to provide older adults and their caregivers with information and assistance on the Medicare discount drug card program,' said Dan Quirk, Executive Director of NASUA.

'œWith the December 31 deadline for the 2004 credit fast approaching, our goal through this campaign is to make sure every low-income senior is aware of the opportunity for $600 this year and another $600 in 2005 and that they know there is local help available to assist them in taking the steps to sign-up before the end of December,' added n4a CEO Sandy Markwood.

Today, n4a and NASUA released, 'œ5 Things to Know about the New Medicare Rx Discount Card Program' to help seniors and their families. The five tips are:

1. Any senior who has Medicare and is not enrolled in Medicaid is eligible for a Medicare-approved prescription drug discount card.

2. Seniors with an annual income of no more than $12,569 for a single person, and no more than $16,862 for a married couple qualify for a $600 credit in 2004 and another $600 credit in 2005. Those with slightly higher incomes may qualify for other prescription drug assistance programs.

3. The Medicare discount card program gives seniors many different cards to choose from, however, beneficiaries can only enroll in one Medicare-approved discount card at a time. Seniors should choose the card that offers the best discounts on the medicines they take.

4. For more information, call 1-800 MEDICARE (1-800-633-4227), visit the Medicare web site at www.medicare.gov, or contact your State Health Insurance and Assistance Program (SHIP) for additional counseling and one-on-one assistance. A listing of SHIP programs with toll-free numbers is available at www.medicare.gov/contacts/static/allStateContacts.asp.

5. The maximum fee for the discount card is $30 per year.

The Aging Network has a long-standing track record of successfully providing assistance, benefits counseling and easy-to-understand information to millions of older adults, especially those with low-incomes. With the increase in Medicare beneficiary options under the Medicare Prescription Drug Improvement and Modernization Act, the network has stepped up its efforts to meet the tremendous need for beneficiary assistance and education.

Since the Medicare discount card program began in June 2004, state and local aging agencies across the country have worked along with State Health Insurance and Assistance Programs to provide older adults in their communities with quality information and answers on the changes to Medicare.

The Aging Network Medicare Rx Outreach Campaign is part of a larger effort over the next twelve months that will serve to educate beneficiaries about the new Medicare Part D prescription drug benefit beginning in January 2006 and the new preventive health benefits set to take effect in January 2005. The campaign is being spearheaded by the National Association of Area Agencies on Aging (n4a) and the National Association of State Units on Aging (NASUA) with support from the U.S. Administration on Aging and the Centers for Medicare and Medicaid Services. For more information on the n4a-NASUA Medicare Rx outreach project, visit www.medicarerxoutreach.org.

###

FACT SHEET

Seniors Can Get Immediate Financial Help with Prescription Drug Costs!

* Low-income seniors can really benefit from the Medicare Rx drug discount card when they qualify for the $600 transitional assistance credit.

* To get the $600 credit, seniors can have an annual income of no more than $12,569 for a single person and no more than $16,862 for a married couple. Those with slightly higher incomes may qualify for other prescription drug assistance programs.

* The Clock is ticking to get it: Seniors must sign up by December 31. If they do, seniors will get $1,200 to pay for Medicine between now and the end of 2005.

* That is why November has been designated Aging Network Medicare Rx Outreach Month.

* Seniors are confused by the various discount card programs that are available. Some don'™t have computers to access discount card information on the Internet'¦ for others getting information over the phone is not an option. Many need help understanding the various cards and programs that are available. Fortunately, there is a local resource available to help sort it all out.

* State and Area Agencies on Aging and Native American aging programs have launched a nationwide campaign to help seniors with their prescription drug costs. The campaign'™s main objective is to provide low-income beneficiaries with the information and assistance they need to take advantage of the $600 transitional assistance credit offered in 2004, before that opportunity expires on December 31, 2004.

* Trained volunteers will help seniors complete applications in cities across the U.S.

For information: Go to www.medicare.gov/maddc/home.asp, or call 1-800 MEDICARE (633-4227).

CONTACT: Lisa Cohen
310-395-2544

After years of debate a new Medicare prescription drug card program will be available starting in 2006. For the period from May of 2004 to December of 2005, an interim program will be available -- Medicare prescription drug discount cards. Medicare participants will need to decide which, if any, they want to select. Several programs at the American Society on Aging / National Council on Aging Joint Annual Convention in San Francisco explained the options, and the difficulties, participants can anticipate.

The cards will charge the participant an annual fee of up to $30 for a card that will entitle him or her to get a discount on prescription drugs. Low-income participants can have the enrollment fee waived and get a credit of $600 toward their out-of-pocket costs under the program. Each person is limited to ONE approved card, and once selected, the choice cannot be changed during the calendar year. This means everyone will need to carefully decide what to do in May (for their 2004 choice) and then again when they are given an opportunity to make a choice for the year 2005. Further confusing things, seniors will be getting offers for unapproved cards and may not realize they have chosen a card that is not approved.

Several resources have been developed to help seniors make choices (see the end of this article for links to those resources.) Because this decision cannot be changed, it will be important to carefully research the options before making a choice.

Some things to be aware of include:

Make sure the chosen card is "Medicare Approved" by looking for the official symbol. There are already stories of fraudulent marketing by companies selling cards that are not approved.

Use the tools below to be sure that the card will cover all the drugs you routinely take. NOT ALL CARDS WILL COVER ALL DRUGS!!

Make sure the network is convenient to you. Some cards may require you to use pharmacies that are not nearby.

Be sure to investigate this opportunity if you are low income or have very high drug costs. It is not clear how beneficial the cards will be to middle income people with moderate drug costs or other drug coverage.

You do not have to rush into a decision. There will be no penalty for waiting to enroll until you are sure what you want to do. This means it may make sense for people who won't get any immediate benefit from the card to avoid signing up at this time. Then, if you later encounter health problems and need the card to cover new prescriptions, you will be able to look for a card that provides coverage for the drugs you need.

Be aware that the card issuers can change the list of drugs that they cover after you have signed up for the card. You cannot change to a different card if that happens. One weakness of the program is that you will have no recourse if the drug you need is dropped or if you later find you need a new drug which is not covered. Panels at the ASA/NCOA convention recommended that you avoid cards with very low fees because they may be more likely to change their drug formularies (the list of drugs they cover) if their costs exceed their expectations.

Panelists also suggested looking hard at the card sponsors to make sure you are dealing with the most reputable ones.

Don't be rushed into making a decision. Take time to review all your options first.

From CareScout

Medicare beneficiaries will not be allowed to use insurance to cover the share of prescription drugs under the new Medicare bill. Millions of current Medicare beneficiaries have bought insurance to fill gaps in cost that Medicare does not cover. Yet under the new provision Medigap policies that help pay the cost of drugs these beneficiaries are prohibited use of this coverage after January 1, 2006.

Congress cited two reasons for prohibiting the sale of Medigap policies. The first reason was that the Congress wanted to ensure that beneficiaries covered some of the cost of their medication and did not overuse medical services. Secondly, the legislatures wanted to prevent the duplication of the new Medicare benefit.

The Medicare drug plan may further limit the use of medications by beneficiaries through the creation of a preferred drug list. In this case only the drugs listed would be covered under Medicare. Patients could not buy private insurance to cover the cost of medication that is excluded form the preferred list.

Furthermore, low-income elderly that qualify for both Medicare and Medicaid would receive their drugs through Medicare. Even though Medicaid covers more medication cost than Medicare, the bill generally prohibits Medicaid programs from supplementing the Medicare drug benefit.

Both Democrats and Republicans have come up with proposals to provide coverage for prescription drugs for Medicare Beneficiaries. Details are sketchy, but I have tried to analyze the impact of each proposal on beneficiaries.

The Republican proposal as currently configured would favor those with annual drug costs of $1,500-$6,000 per year, and the Democratic proposal benefits those with costs over $6,000, or costs from $600-$1,500 per year. Neither proposal would benefit those with drug costs below $600 per year, since they would pay more in premiums than they would gain in coverage. Both plans would provide free coverage for low income people (at least those below 135% of the Federal Poverty Level, so I have ignored them in this calculation. Note, however, that the Republican plan would be an administrative nightmare because it has five (5!!) different benefits levels to consider.

I have used the following assumptions. Few details have been finalized or published, but these seem to be the basic parameters now being considered:

* Out-of-pocket costs include premiums
** Net benefit is total cost of drugs less the out-of-pocket costs of plan

NOTE: I urge the Republicans to PLEASE PLEASE PLEASE simplify their proposal. I am a CPA and still spent several hours trying to figure out what the cost/benefit would be for people with various levels of drug costs. There are five (5!!) different payment levels in the Republican plan, making it very complicated to calculate the relationship between the total drug costs and the actual out-of-pocket expense. Everyone involved will need to know the total year-to-date drug expense and the accumulated out-of-pocket cost at the time of every drug purchase in order to know what the beneficiary must pay as their share of the prescription cost. In addition to being difficult for beneficiaries to understand, this plan would be an administrative nightmare!!

Republican Proposal Benefit Levels

Plan Pays	For Costs From/To	Beneficiary Out-of-Pocket
0%	Up to $250	Up to $250/year
75%	$251-$3,250	Up to $750/year
50%	$3,251-$5,250	Up to $1,000/year
0%	$5,251-$8,250	Up to $3,000/year
100%	Over $8,250	Nothing
	MAXIMUM OUT-OF-POCKET:	$5,000

President Bush quietly sent his prescription drug plan to Congress Monday. It was mentioned during a White House press briefing, where some reporters suggested that the lack of fanfare might be due to a concern that the plan is not likely to do well on Capitol Hill, but White House press secretary Ari Fleischer denied that, and responded, "We have other busy events tomorrow and the following day. It's always just a question of scheduling. But the President is committed to it, and we're going to send it up and see what we can't make happen. But we are aware that there are some sensitivities on this issue. Some concerns have been raised."

The Bush administration is asking for the government to provide and "Immediate Helping Hand" for four years by channeling funding through state Medicare drug assistance programs. His proposal is to pay all drug bills for single recipients with annual incomes under $11,600 and married recipients with annual incomes under $15,700. Medicare would pay up to half the cost of a prescription drug plan for single recipients with incomes between $11,600 and $15,000, and married recipients with incomes between $15,700 and $20,300.

Ways and Means Chairman Bill Thomas (R-CA) said of the proposal, "Our first and highest priority should be to modernize Medicare with a prescription drug benefit for all seniors, but finding consensus has been challenging and will take time. As we work on a comprehensive plan to improve Medicare, Congress should always remain open to ideas to give timely coverage for those seniors struggling to make ends meet." Bush's new secretary of health and human services, Tommy Thompson, told senators that comprehensive reform may take some time to achieve, and suggested that Congress focus for now on passing Bush's prescription drug plan while a White House task force looks at ways to fix the Medicare system as a whole.

Democrats have strongly criticized the proposal, and vow to torpedo it. Michigan Rep. David Bonior and other Democrats said they would introduce their own prescription drug package that would benefit all Medicare recipients rather than a smaller pool of poor seniors that Bush has singled out for coverage. Even some Republicans, like Tennessee Republican Senator Bill Frist, have expressed doubts about the proposal as it stands.

In the current issue of the Journal of the American Medical Association, Dr. Robyn Tamblyn and colleagues from McGill University in Montreal report that asking low income people to share in the costs of prescription drugs has some unintended effects. While they found that cost-sharing did reduce the use of unnecessary drugs, it also led to dangerous reductions in the use of drugs necessary for disease management. Among the elderly, researchers found that cost sharing reduced the use of necessary drugs by 9%, and led to a 14% increase in emergency department visits.

The investigators state, "Consumer cost-sharing has been the principal method of fiscal control because it assumes that people will value what they pay for and as a result, they will reduce their use of unnecessary medication when they are required to contribute a portion of the payment, however consumers may not have the information needed to make wise decisions about necessary treatment."