Effective July 1, 2007, the New York State Department of Health (DOH) will commence a process to enroll seniors, who are EPIC participants into a Medicare Part D plan. Seniors will be required to participate in order, to remain eligible for EPIC, unless Medicare Part D enrollment would cause significant financial hardship (such as the loss of health insurance benefits).
Seniors that have not selected a plan, will be enrolled by DOH into one of thirteen benchmark plans. DOH will select the most appropriate plan for the senior based on his or her network, pharmacy and drug prescriptions. Medicare Advantage members will be enrolled in a plan offered by their Health Maintenance Organization (HMO).
Drugs covered by EPIC that are not covered by Medicare Part D will still be covered by EPIC.
EPIC will also provide for all participants wrap around coverage which will pay for pharmaceutical expenses that fall within the Medicare Part D coverage gap (“donut hole”).
Seniors enrolled in Medicare Part D will receive two cards: a new EPIC card that indicates the seniors participation in Medicare Part D and a Medicare Part D card.
Premiums.
Seniors enrolled in the EPIC fee for service program (incomes of $20,000 or lower for singles and $26,000 or lower for couples) and Medicare Part D will no longer have to pay the monthly Part D premium (up to the monthly benchmark premium amount of $24.45).
Fee plan participants, however, will continue to pay their quarterly EPIC fees unless they qualify for “Full Extra Help” under Medicare Part D, in which case their enrollment fee will be waived.
Deductibles.
Seniors enrolled in the EPIC catastrophic coverage program (incomes from $20,001 to $35,000 for singles and $26,001 to $50,000 for couples) will receive an annual credit toward their EPIC deductible that is equal to the monthly Medicare Part D benchmark premium amount (approximately $300 prorated by the number of months remaining in their EPIC coverage year). However, they will continue to be responsible for paying the Medicare Part D premium.
How Medicare Part D Works
Medicare Part D is a Federal prescription drug program that offers a defined standard benefit or an alternative benefit that is actuarially equivalent or better than the standard benefit.
For 2007, the standard benefit has a $265 deductible and pays 75 percent of costs up to an annual amount of $2,400 (including the $265 deductible). Once the deductible is reached, the insured is responsible for paying 25 percent of the next $2,135; this represents an amount of $534. After the threshold of $2,400 is reached ($2,135 + $265), the next $3,051 is not covered by Medicare Part D.
This is also known as the coverage gap or “donut hole.” Once the participant has paid $3,850 out of pocket ($265 + $534 + $3,051), Medicare Part D pays 95 percent of the remaining costs (15 percent from the plan, 80 percent from Medicare). The State’s EPIC plan will pay for the donut hole so New York’s seniors will not be impacted.
According to the Kaiser Foundation, most Participating Drug Providers (PDP) offer a benefit that is more generous than the standard package; 60 percent of PDPs have no deductible and 25 percent offer tiered copayments for drugs rather than coinsurance.
