By Ellyce Anapolsky & John Coburn

Under Medicare Part D, beneficiaries can choose from multiple stand-alone prescription drug plans or a managed care plan including a prescription drug benefit, known as a Medicare Advantage Health Plan. For prescription drugs, individuals pay a monthly premium and share certain costs; many plans also have a deductible before coverage begins. For low-income elders, both the costs and the complex range of plans available can present obstacles to coverage -- yet a few basic changes to federal policy and state programs could go a long way toward addressing the problems.

Each year, the Centers for Medicare and Medicaid Services (CMS) define the parameters for the cost-sharing that plans may charge to individuals. In addition, CMS publishes formulary guidelines detailing the classes of medications that plans must offer. Within these restrictions, the plans are free to offer whatever benefits package they choose. Cost-sharing and formularies may change within the plan year, with certain restrictions, and may change from year to year. Individuals are expected to choose the plan that best meets their particular needs.

For low-income elders, the standard cost-sharing renders Medicare Part D unaffordable. To redress this gap, the program offers a subsidy, referred to as extra help. Certain Medicare recipients automatically receive this subsidy: those covered by Medicaid, called full-benefit dual eligibles; those enrolled in Medicare Savings Programs; and those receiving SSI without Medicaid. Individuals who have incomes below 150 percent of the federal poverty level and who have limited resources also can be eligible, but must apply for the subsidy.

Choosing the Right Plan

Although low-income individuals who qualify for extra help may be less concerned than others about the costs of their Part D pan, they still must confirm that they are in a suitable plan every year. To date, only two states, Maine and New Jersey, have implemented mechanisms -- called intelligent assignment -- to ensure that dual eligibles are automatically assigned to a drug plan that will fit their needs.

In every other state, individuals must reanalyze their medication needs annually and determine which Part D plan will best meet their healthcare expectations for the year to come, then select a new plan or prepare to make an appeal to their existing plan to receive needed drugs. This presumes, of course, that the individual has the ability to effectively sort through the complex options or has a support system to help with the process.

Unfortunately, such a presumption may be invalid for a significant minority of Medicare beneficiaries. As a study presented by K. Merrell and colleagues at the 2001 annual meeting of the Academy for Health Services Research and Health Policy concluded, "Medicare beneficiaries as a group have levels of cognitive deficits, social isolation and physical limitations that may compromise their ability to act as effective, informed consumers in the health plan marketplace."

To ensure that low-income Medicare beneficiaries are in the most appropriate prescription drug plan available to them, we must do one or more of the following:

• Adequately fund education and outreach so that each low-income Medicare beneficiary has a reasonable opportunity to receive assistance in choosing an appropriate plan.
• Use an intelligent-assignments system to ensure that individuals are in plans that best meet their needs.
• Ensure that there is at least one identified plan available in every area that is comprehensive enough to meet the needs of all Medicare beneficiaries.

Absent these kinds of remedies, continued confusion and trouble at the pharmacy will continue year after year.

Finding Legislative Solutions

The only proposed solution promotes the third of the remedies noted above. Legislation sponsored by Sen. Richard Durbin (D-Ill.), Rep. Marion Berry (D-Ark.) and Rep. Jan Schakowsky (D-Ill.) would establish a Part D plan offered directly by Medicare to compete with the stand-alone plans offered by private providers. The legislation also would empower Medicare to negotiate with pharmaceutical companies for lower prices on medications and would develop a formulary based not on cost and utilization but on best available medical evidence. This effort is a start toward improved and simpler coverage for low-income beneficiaries but would not solve all the problems facing this vulnerable population.

Ellyce Anapolsky is a staff attorney and John Coburn is a senior policy attorney, both at Health and Disability Advocates, a Chicago-based nonprofit that works to protect the rights of children, people with disabilities and low-income older adults. Visit the organization’s website at www.hdadvocates.org.

---

Copyright © 2008 American Society on Aging; all rights reserved. This article may not be duplicated or distributed in any form without written permission from the publisher: American Society on Aging, 71 Stevenson St., Suite 1450, San Francisco, CA 94105-2938; e-mail: permissions@asaging.org.