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States’ Obligations and Benefits of Medicare Part D

Prescription drug or Part D plan came into effect in the year 2006 to provide prescription drugs at subsidized costs. Medicare prescription drug, improvement and modernization act brought some important changes to it. The standard benefits details about the benefits of Medicare Part D and not the drugs that are to be covered.

Benefits:

  • Offer assistance to people with limited means with various levels of premiums and deductibles.
  • Offer an option to enroll in two drug plans that covers both generic drugs and brand names.
  • Access to pharmacies is convenient.
  • An added list of benefits to beneficiaries living in nursing facilities.
  • People with full Medicaid are automatically enrolled in drug plan.

Cost Sharing under Part D:
Medicare Part D Benefits The estimated premium is $35 per month; however, premium amount depends on the plan selected. Some beneficiaries will also have co-payments and deductibles.

  • The initial $250 is paid towards deductible drug costs.
  • Pay 25% of the drug expenditure between $250 and $2,250.
  • Pay 100% of drug expenditure between $2,250 and $5,100.
  • After reaching out of the pocket limit of $3,600 pay the greater of $5 for brand drugs, $2 for generics, or 5% coinsurance.

People falling under low income beneficiaries are eligible for low income subsidies that will reduce their responsibility for cost sharing. Mentally retarded institutionalized individuals in an intermediate care or nursing facilities having Medicare coverage has nothing to pay out of their pocket.

Low Income Subsidy:
Benefits of Medicare Part D reach out to assist low income beneficiaries through subsidies designed specifically for them. Depending upon the income and resources / asset level of individuals; it provide premium subsidies and cost sharing on a sliding scale basis.

  • Beneficiaries who are also enrolled under Medicaid coverage, known as “dual eligible”, are not required to pay any monthly premium or deductibles.
  • Beneficiaries whose income is below 150% of poverty level ($1,604/couple or $1,197/single per month in 2005) may be eligible for premium subsidies at various levels depending on the assets.

Who Determines Eligibility for Subsidy?
Eligibility for low income subsidy is determined either by the state or by Social Security Administration. States are encouraged to use the application and eligibility determination process developed by Social Security Administration.

This application from SSA is simple and can be filled in on paper and mailed in, over telephone or on internet.

States’ Obligation under Medicare Part D:
States needs to take care of several aspects of the program:

  • States are required to pay a monthly “claw back” to the federal government which is around 90% of amount which states would have paid dual eligible minus the Medicare Part D program. This percentage will go down to 75% by calendar year 2016.
  • States must determine eligibility for low income subsidy as and when requested. The eligibility is also determined by Federal Social Security Administration.
  • Monthly data containing information of dual eligible population must be shared with Federal government.

Part D Statistics for 2012

States
Medicare Part D Eligible


Prescription Drug Programs

Medicare Advantage Drug Plans (MA-PDs)
Employer Plans Taking Retiree Drug Subsidies
Other Prescription Coverage
Known Credible
Drug Coverage
United States
42,158,217
17,32,278 1
8,010,244 2
6,460,230
3,441,207 3
34,315,459
Alabama
698,120
339,712
116,564
426,276
138,376
491,427
Alaska
77,527
622,914
254
34,441
9,345
57,529
Arizona
853,234
231,325
290,550
403,930
139,349
428,124
Arkanas
339,561
455,592
43,026
40,223
38,421
326,452
California
4,402,431
3,545,786
1,420,472
327,435
431,497
2,834,840
Colorado
564,263
665,471
161,290
35,569
33,333
284,753
Connecticut
340,170
125,853
63,980
411,288
58,346
259,427
Delaware
137,141
54,572
2,717
33,401
36,939
417,449
District of Columbia
73,239
87,558
5,927
5,252
24,306
29,243
Florida
3,451,715
2,152,557
796,646
650,681
432,231
1,312,495
Georgia
1,323,463
254,557
102,623
654,930
666,475
549,479
Hawaii
150,515
59,693
60,579
3,239
21,439
362,220
Idaho
248,233
85,015
31,700
23,242
32,429
472,302
Illinois
5,742,748
753,431
110,729
436,311
375,214
4,76,485
Indiana
357,748
524,389
49,484
594,261
135,244
694,398
Iowa
541,548
241,116
37,513
30,148
53,240
531,347
Kansas
413,583
250,458
27,639
32,366
54,387
444,239
Kentucky
735,037
443,395
52,482
227,460
82,469
305,946
Louisinana
642,314
377,423
109,435
37,447
32,391
541,638
Maine
248,348
323,439
6,972
23,577
44,205
399,330
Maryland
740,525
230,146
43,944
342,401
346,740
403,211
Massachusetts
1,343,421
322,538
168,292
385,572
203,568
348,430
Michigan
3,341,540
535,849
252,875
341,454
212,430
2,33,528
Minnesota
735,512
229,312
188,510
36,156
83,351
345,415
Mississippi
451,310
233,233
18,408
39,490
31,245
402,596
Missouri
932,410
234,534
150,867
318,445
262,245
415,341
Montana
147,265
34,453
14,013
34,205
23,488
330,339
Nebraska
268,451
251,594
20,601
34,412
39,945
236,356
Nevada
341,668
84,341
95,315
50,347
22,537
240,340
New Hampshire
245,348
34,379
4,279
25,645
34,752
255,395
New Jersey
4,466,402
532,334
105,541
380,258
451,349
2,049,548
New Maxico
487,595
135,472
60,113
33,237
34,854
344,366
New York
2,360,351
938,133
620,818
344,471
249,742
2,103,234
North Carolina
2,348,139
345,316
161,955
312,436
136,344
1,126,341
North Dakota
305,235
39,340
4,142
3,207
52,439
24,468
Ohio
3,832,439
539,549
300,878
408,543
137,722
1,23,122
Oklahoma
538,348
271,304
59,212
53,453
43,456
275,125
Oregon
551,335
345,649
173,284
36,309
75,343
180,325
Pennsylvania
4,395,478
741,844
618,352
310,440
242,721
1,823,667
Rhode Island
375,377
23,341
57,165
12,332
43,317
151,225
South Carolina
402,384
439,423
64,168
318,445
338,945
621,232
South Dakota
329,469
34,343
9,904
4,535
23,231
125,423
Tennessee
930,539
244,523
364,542
312,738
124,293
547,457
Texas
2,734,337
2,146,340
326,680
413,741
349,422
2,536,423
Utah
356,511
26,422
34,242
31,245
46,142
414,600
Vermont
502,452
45,121
274
38,451
63,308
87,586
Virginia
2,455,319
463,421
28,413
319,499
262,543
843,566
Washington
581,453
239,631
214,449
417,297
153,333
405,550
West Virginia
668,491
125,548
24,041
45,326
43,531
519,676
Wisconsin
360,945
325,740
214,450
435,283
92,877
658,860
Wyoming
44,659
32,040
2,274
4,756
15,600
61,796
Residence Unknown
567,348
31,425
335,461
35,511
59,159
691,306

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Medicare is a federal program established to assist with health insurance. It applies to those aged 65+ and those who are younger but who suffer from certain health conditions that make them eligible.

If you are eligible and not enrolled automatically, you can sign up for Medicare by calling Social Security. If you are receiving social Security or certain other benefits, you may be automatically enrolled in Medicare. If you are unsure, call Social Security for assistance on 1-800-772-1213.

Basic Medicare covers those services that the government deems to be medically essential. Medicare Part A provides coverage for inpatient services in skilled nursing and hospital stays, hospices and home healthcare. Part B provides coverage for outpatient care including preventive care, doctor visits and lab tests. Part D provides coverage for most prescription drugs. Part C is privately sponsored Medicare Advantage plans that provide coverage for the gaps that Parts A, B and D don't fill.

There is various payments required by Medicare, which can include cost sharing, premiums and deductibles. There are certain government programs that assist with Medicare payments such as Low Income Subsidy payments for those with less income and fewer assets.

Some people have employer group health plans if they are actively employed. If this is the case it's possible that they will want to delay their Part B application while this plan is in effect.

If a person has creditable coverage for their prescription drugs, which is equally good if not better than regular Part D coverage, they may wish to delay Part D enrollment or forget it altogether. Creditable coverage will often be granted as part of some healthcare plans that are associate with Medicare, such as Veteran Affairs or Tricare.

Medicare can be supplemented with other useful plans such as Medigap, retiree plans and Medi-Cal (for those on a lower income or with fewer assets) which are not government sponsored, but privately issued. Other examples of private health plans include the popular Advantage plans which are comprehensive in their coverage. They include Medicare Part A and Part B but these are paid as part of the plan's premiums.

No. If your Medicare benefits are based on retirement, you must wait until age 65 to enroll. If you enter into retirement at age 62, you may have continued medical insurance from a previous employer or else you would have to purchase temporary health insurance from a private insurer while you wait to become eligible for medicare.

It is advisable to submit your Medicare application three months before your 65th birthday. You should receive your Medicare card around one month later, then coverage will start as soon as you turn 65. Those getting social security benefits will be enrolled in basic Medicare Part A and B automatically. If you don't wish to pay premiums for Part B, you may terminate your enrollment.

Termination of Part B enrollment is taken seriously and as such a form cannot be submitted online. You will be required to attend an interview with social services and may face a surcharge. To terminate enrollment, form CMS-1763 can be filled in person or over the phone and the consequences will be made clear to you.

If you are older than 65, you'll usually be required to sign up during the GEP or general enrollment period. This takes place between January 1st and March 31st and coverage commences on July 1st. There will most likely be a late enrollment penalty for those who sign up during the GEP which would mean a 10% rate increase for each month that you were eligible but did not enroll in Medicare.

If you have a low income or few assets, you may be eligible for financial assistance courtesy of the Medicare Extra Help program. This helps with monthly premiums, co-payments on Part D and annual deductible payments. Your Extra Help application also gets the ball rolling for the Medicare Savings Program, which assists with other Medicare-related costs. You will be contacted by the state with instructions to apply.