Should your patients sign up for Medeicare prescription drug coverage?

April 1, 2006

Dorado, Puerto Rico?The Centers for Med-icare and Medicaid (CMS) now offers a prescription drug option to patients enrolled in Medicare. Those eligible for Medicaid were automatically enrolled in a plan in their states in January. As the deadline for enrollment approaches (May 15, 2006), you and your staff should be prepared to assist your senior patients in choosing a plan that is right for them.

James Rienzo, senior eye care business advisor, Allergan Inc., spoke about the impact of this new coverage for patients and practices during the Current Concepts in Ophthalmology meeting here.

With the passage of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), Congress hoped to make drug coverage available to all Medicare recipients. At that time four out of 10 seniors had to pay for their medications out-of-pocket.

It is hoped that the new Medicare Part D (prescription drug coverage) will spur better patient compliance and improve clinical outcomes for patients, explained Rienzo, who spoke at the meeting sponsored by Johns Hopkins University School of Medicine, Baltimore, and Ophthalmology Times.

"If patients pay a small co-payment now, as opposed to a 100% true out-of-pocket payment, we can assume that they are going to take their medications now because they can afford them," Rienzo said.

Will all patients benefit?

For Medicaid patients, the benefits are substantial. For an individual with an income less than $8,980 per year or a couple with an income less than $12,120, there are no monthly premiums and the yearly deductible is 0. Medicaid patients pay only $1 for a generic drug and $3 for a brand-name one at all times.

"Medicaid patients that fit into these categories were automatically enrolled in a plan in their state," Rienzo said. "So your Medicaid patients should have gotten some notification right away."

Other patients with limited resources may also be eligible for beneficiary subsidies, he continued. If individuals have an income 135% above the poverty line (for an individual it is less than $12,123 and a couple, $16,362), they also pay no monthly premiums or yearly deductible for the Medicare prescription drug plan. Their out-of-pocket costs are $2 for generic drugs and $5 for brand-name drugs, Rienzo said.

For those individuals or couples with an income 150% above the poverty line, monthly premiums must be paid by patients and a $250 yearly deductible met before the drug benefit kicks in, he continued. However, during the initial benefit period (less than $2,250) and the coverage gap ($2,250 to $5,100), these patients will only pay 15% of the drug cost. When the catastrophic benefit kicks in (above $5,100), these patients pay only $2 for generic prescriptions and $5 for brand-name drugs.

"Physicians need to communicate this information to their patients," Rienzo said.

If one is not eligible for beneficiary subsidies, will Medicare patients reap large savings from the Medicare prescription drug coverage? Rienzo showed three case studies as examples of the amount of savings that could be derived from enrolling in Medicare Part D.