337.5 Medicare Part D - Prescription Drug Coverage

On January 1, 2006 the Medicare Prescription Drug Benefit was implemented. This coverage is called Medicare Part D. Part D was created to provide prescription drug coverage for individuals who are eligible for Medicare. To get Medicare prescription coverage, an individual must join a plan. The Centers for Medicare and Medicaid Services (CMS) sends out an advance notice and enrollment package as individuals approach Medicare eligibility and become eligible for Part D.

If a beneficiary wants Part D coverage they must enroll in a private insurance company that offers the benefit. Consumers can choose one of the Medicare approved stand-alone prescription drug plans (PDPs), or a Medicare Advantage Plan that also includes Part D coverage (MA-PDs).

Medicare Part D is an optional benefit and if consumers choose Part D coverage they must pay a monthly premium, meet a deductible (if the plan charges one) and incur significant cost-sharing unless they qualify for a Low Income subsidy from Medicare (see Section 337.54). Medical Assistance beneficiaries who qualify for full benefits under MA and who also qualify for Medicare must enroll into a Part D plan because they no longer have prescription coverage through Medical Assistance.

MA recipients who will be enrolling in Medicare Part D will come from an MA Fee-For-Service or the ACCESS Plus Program where they had been using their ACCESS card for prescription drugs or from an MA Managed Care/ACCESS Plus program, where they had been using the Plan’s ID card for prescription drugs.

MA recipients in a Fee-For-Service (FFS) or Access Plus program who become eligible for Medicare are issued the “Reduction of Benefits Notice For Medical Assistance Fee-For-Service Recipient” notice explaining benefit changes along with the “Very Important Information About Getting Prescription Drugs Under Medicare Part D and Other Health Care Services Under Medicare Part B” notice as shown in Appendix B.

These individuals will continue to use the ACCESS card (yellow if they just receive Medical Assistance benefits and green if they get Supplemental Nutrition Assistance Program (SNAP) benefits in addition to their MA) along with their Medicare cards when receiving health care services.

MA recipients in Managed Care Plans who become eligible for Medicare are issued the “Very Important Information About Getting Prescription Drugs Under Medicare Part D And Other Health Care Services Under Medicare Part B” notice as well as “Reduction of Benefits Notice for Medical Assistance Managed Care Recipients” notice explaining benefit changes shown in Appendix B. Once these individuals are disenrolled from their Medical Assistance Managed Care Plan they will use an ACCESS card (yellow if they just receive Medical Assistance benefits and green if they get SNAP benefits in addition to their MA) along with their Medicare card when receiving health care services.

Medicare Part D Plans generally do not cover benzodiazepines, barbiturates or over-the-counter medications. A chart listing Part D Excluded Drugs is shown in Appendix C. This list is not all inclusive. Medical Assistance may cover some of these medications through the ACCESS card A list of the Barbiturates and Benzodiazepines covered by Medical Assistance is found at Appendix C. For questions about prescription drugs covered by Medicare Part D, individuals should call 1-800-Medicare (1-800-4227). TTY users should call 1-877-486-2048 with questions.

337.51 Initial Enrollment Period (IEP)

The initial enrollment period for Part D is for 7 months. Individuals who are eligible based on age will have an IEP beginning 3 months prior to their 65th birthday and ending 3 months after the month of their 65th birthday. Disabled individuals will have an IEP beginning 3 months before reaching 25 months of receiving SSDI cash benefits and ending 3 months after their 25th month of receiving monthly SSDI benefits. Both groups will receive a notice from CMS at the beginning of their IEP advising them of their upcoming eligibility and informing them of their Part D options and how to enroll in a plan.

337.511 Annual Open Enrollment Period

The annual Open Enrollment Period (OEP) is a six week period at the end of every calendar year (from November 15th through December 31st) during which time any Medicare beneficiary can enroll into a Part D plan or change plans. If a consumer enrolls in a plan at any time during this period, the enrollment is effective January 1st of the next year.

337.52 Special Enrollment Periods (SEPS)

In certain situations, people with Medicare may be eligible for a Special Enrollment Period (SEP) to join a plan that provides Medicare prescription drug coverage, or switch to a different plan. An SEP is a period of time when an individual can enroll in or switch plans outside of the Initial Enrollment Period or the Open Enrollment Period. Appendix A describes the different situations in which an individual may be eligible for a Special Enrollment Period.

NOTE:  Individuals who have both Medicare and who receive any help from Medical Assistance (even if it is just the payment of their Part B premium) are known as dual eligibles. Dual eligibles qualify for an ongoing Special Election Period and can change their Part D plan at any time during the year. Coverage becomes effective the first of the month after joining the new plan.

337.53 How to Get Medicare Prescription Coverage

There are two ways to get Medicare prescription drug coverage:

• An individual can join a Medicare Prescription Drug Plan. These plans are sometimes called “PDPs.”

• An individual can join a Medicare Advantage Plan or another Medicare health plan that includes prescription drug coverage.
  

An individual can get all Medicare coverage (Part A and Part B), including prescription drugs (Part D) through these plans. These plans are sometimes called “MA-PDs.”

• Everyone with Medicare can get Medicare prescription drug coverage (Part D).

• An individual is not required to join a prescription drug plan when first eligible. However, the individual will be required to pay a late enrollment penalty when later choosing to enroll in a prescription drug plan.

• An individual with limited income and resources may qualify for extra help from Medicare to pay for prescription drug coverage. This extra help is sometimes called the low-income subsidy. See Section 337.54.

337.54 Low-Income Subsidy (LIS)

Individuals who have both Medicare and who receive any help from Medical Assistance (even if it is just the payment of their Part B premium) are also known as dual eligibles.

Low-Income Subsidy (LIS) is a Medicare program  to help individuals with limited income and resources pay for some health care and prescription drug costs.

Individuals who qualify for LIS and join a Medicare drug plan:

• Get help paying their Medicare drug plan's monthly premium, yearly deductible, coinsurance and co-payments

Important:  If an individual has selected an enhanced plan, the individual will be required to pay a portion of the premium for the extra coverage.

• Can switch drug plans at any time. Any changes will take effect the first day of the following month.

• Have no coverage gap.

NOTE:  Most Medicare Prescription Drug Plans (Part D) limit the amount of money that the plan will pay for covered drugs. Once the individual reaches the limit, the individual must pay out-of-pocket for drugs needed until a catastrophic limit defined by the drug plan is met. The drugs paid for by the individual until the catastrophic limit is reached are considered the coverage gap. Once the limit for drugs paid by the individual has been reached the individual will get “catastrophic” coverage.

Qualifications for Low-Income Subsidy include:

• Single individuals with annual income below $21,870 (150% FPIGs) and resources less than $15,720.

• Married individuals (with spouse and no other dependents) with annual income below $29,580 (150% FPIGs) and resources less than $31,360.

• Individuals who receive any type of MA benefits, including those whose only benefit received is the payment of their Medicare Part B premium.

NOTE:  Beginning January 1, 2024, individuals who would have been eligible for the partial LIS benefit will be eligible for the full LIS benefit.

337.541 Resource Limits Used to Determine Eligibility for the Low-Income Subsidy (LIS):

*    Out-of-pocket Threshold is $8,000 for 2024

**  Resource limits displayed include $1,500 per person for burial expenses.

*    Out-of-pocket Threshold is $7,400 for 2023

**  Resource limits displayed include $1,500 per person for burial expenses.

Updated December 21, 2023, Replacing January 3, 2023