Medicare Part D - Finding Help for Prescription Drug Coverage

This article focuses on programs that help Medicare beneficiaries acquire necessary medications, although many of the programs discussed are not limited to that population. Due to the recent economic downturn, millions of Americans are looking for ways to cut costs. Unfortunately, some have been forced to make the choice between their prescription medications and other essentials. One recent survey found that one American in five has gone without medications, split pills or skipped doses in an effort to save money. In doing so, they may be risking their health and possibly their lives.[1]

Advocates and beneficiaries should be aware that there are programs that offer direct subsidies to pay for medications as well as those that provide free or discounted medications; the amount of assistance varies from program to program. Some assistance programs may have income limits or other requirements, but many have eased requirements due to the recession, even as they have seen an increase in applicants. Applicants should have all of the information necessary to fill out the application assembled and provide all requested information to decrease the likelihood of being denied and having to reapply. Applicants for assistance may need the following documents:

The resources listed below include programs that can act as a supplement to Medicare Part D, and some that operate independent of Part D. The monetary value of assistance provided by programs that operate independently of Part D cannot count toward out-of-pocket costs for Part D; in other words, assistance from independent programs will not count toward meeting the deductible or the initial coverage limit, or toward getting through the donut hole to be entitled to catastrophic coverage.[2] A full document with details relating to each segment of this Alert, including toll free numbers and URLs for specific programs, is available at http://www.medicareadvocacy.org/PrescDrugs_09_06.18.AssistancePrograms.htm.

The most direct assistance for Medicare beneficiaries with prescription drug costs is the Low Income Subsidy (LIS). The LIS has a "full" subsidy and a "partial" subsidy. The former is available for individuals with incomes up to 135% of federal poverty levels (FPL) ($1,218.38/individual/month; $1,639.13/couple/month) and countable assets of not more than $8,100/individual and $12,910/couple. Those with the full subsidy have no premium in benchmark plans, no deductible, no coverage gap and pay co-payments of $2.40/generics and $6.00/brand names. They pay no copayments after reaching the catastrophic threshold. Partial subsidy enrollees cannot have incomes of more than 150% FPL ($1,353.75/individual/month; $1,821.25/couple/month and countable assets of not more than $12,510/individual or $25,010/couple). Individuals with partial subsidy have an annual deductible of $60 and pay co-insurance of 15%, have no coverage gap and pay co-payments of $2.40/generics and $6/brand names when they reach the catastrophic threshold.

Individuals receiving Supplemental Security Income, Medicare Savings Programs or Medicaid are entitled to the LIS without applying. The latter two programs are available through state Medicaid agencies, the former through the Social Security Administration. Those individuals with full Medicaid who are residing in certain institutions have no co-payment requirement; others with full Medicaid and whose incomes are below 100 percent FPL pay co-payments of $1.10/generic and $3.20/brand names.

III. Incurred Medical Expense Deduction: Help for Some Medicaid Beneficiaries

Medicaid beneficiaries who live in nursing homes or in assisted living facilities under a home and community-based waiver are ordinarily required to pay most of their income to the facility as their "share of cost." However, a provision in the Medicaid law allows Medicaid beneficiaries to deduct the costs of certain medical expenses from the amount they must pay for their nursing home or assisted living facility stay. When a beneficiary uses this "incurred medical expense deduction," the state Medicaid agency makes up the lost amount in its own payment to the nursing home or assisted living facility. The provider gets the same Medicaid rate that it would have gotten if the beneficiary had not used the deduction, but more of the rate is paid by the state, and less by the beneficiary.

In calculating a Medicaid beneficiary's share of cost for a nursing home or assisted living stay, the Medicaid law requires states to allow a beneficiary to pay for health insurance premiums, deductibles, and coinsurance, without any limitations on those payments. It also allows a beneficiary to deduct the costs of medical services that are recognized by state law but not covered by the state's Medicaid plan. While the deduction has most often been used by beneficiaries to pay for prescription drugs, eyeglasses, hearing aids, and dentures that their state has not included in its Medicaid program or that exceed the state's coverage, the deduction is also useful for getting prescription drugs that are not covered by a resident's Part D drug plan or that are excluded from Part D coverage altogether. A complete explanation of how to use the incurred medical expenses deduction and the myriad Part D related costs for which it can be used is found in the document referred to in the introduction.

SPAPs are state-funded programs that provide low-income and medically-needy senior citizens and (sometimes) individuals with disabilities financial assistance for prescription drugs. About twenty-three states and one territory offer these programs to Part D enrollees. Each program has its own eligibility and coverage rules. Assistance from qualified SPAPs counts toward out-of-pocket costs. CMS has published a list of qualified SPAPs available at www.cms.hhs.gov/States/Downloads/QualifiedSPAP4.15.08.pdf. The National Conference of State Legislatures keeps a list of SPAPs and other state programs, and closely follows new developments in state drug coverage at http://www.ncsl.org/Default.aspx?TabId=14334#Subsidy.

Discount drug cards offered through chain pharmacies for a small monthly premium provide discounts on a number of services, including prescription drugs. Individuals with a Part D plan may use a discount card, but the two drug programs operate independently of one another. That is, drug card discounts cannot be applied to Part D prices or to Part D copayments, nor can the cost of drugs purchased using a discount card be applied toward Part D out-of-pocket costs. Discount cards may be useful for the purchase of drugs that are excluded by Part D, or for individuals who have reached the donut hole but will not have sufficient drug costs to reach catastrophic coverage. Discount cards also provide discounts on services or supplies not covered by Medicare, such as those relating to vision and dental. The utility of these cards depends on each individual's situation and will likely require detailed calculations of costs and savings.

Some chains such as Walgreens (www.walgreens.com) and Rite Aid (www.riteaid.com) have links to discount cards sponsored by pharmaceutical companies or to discount websites, and therefore have not been included in the document listed in the introduction.

VI. Pharmaceutical Company Prescription Drug Discount Programs (Patient Assistance Programs, or PAPs)

PAPs operating outside of Medicare Part D that offer free or reduced-cost prescription drugs - mostly to persons with low incomes and no insurance - may still be able to offer assistance to Medicare Part D enrollees. Assistance from PAPs does not count toward Medicare Part D out-of-pocket costs (i.e. toward meeting the deductible, initial coverage limit, and catastrophic coverage. (Senator Jeff Bingaman of New Mexico has introduced legislation, S. 1201, to correct this situation.) PAPs usually require patients to apply for and be rejected by all other available public assistance as a condition of eligibility, including the Part D low-income subsidy. For more on how PAPs interact with Medicare Part D, read our Weekly Alert (AlertPDFs\2006\06_05.04.PAPs.pdf).

The BlueCross BlueShield Prescription Drug Discount Program offers a discount to members for specific drugs not covered under the regular prescription drug benefit. It provides discounts on prescription drugs at most retail pharmacies. Information on this program can be found at http://www.fepblue.org/benefitplans/non-fehb/discount.html.

ADAPs provide crucial prescription drug coverage to HIV/AIDS patients as a payer of last resort. Assistance from ADAPs does not count toward out-of-pocket costs to meet the Part D catastrophic coverage threshold as it is partially funded with federal dollars. (Senator Bingaman's legislation, S. 1201, addresses ADAP assistance as well.) Assistance from ADAPs is available for low-income, uninsured or underinsured individuals with HIV/AIDS. Requirements vary by state.

NORD'S Medication Assistance Programs help people obtain prescriptions they could not otherwise afford or that are not yet on the market. Qualification is based on a sliding scale based on income.

On-line pharmacies may specialize in particular types of pharmaceuticals and related supplies, such as diabetes and respiratory supplies, or long-term and chronic condition medications.

RxHope is a patient assistance program that links patients with programs based on the specific medication that they take.

Needymeds.org provides a variety of services for patients including: links to patient assistance programs, assistance with filling out applications, and discount drug cards.

Patientassistance.com has information about over 1,000 patient assistance programs and can manage all of your programs in one convenient place.

The Partnership for Prescription Assistance helps patients without prescriptions drug coverage get free or low-cost medications.

[1] "Programs Offer Free, Cheaper Prescription Meds." MSNBC 07 Apr. 2009. Associated Press. 07 Apr. 2009 <http://www.msnbc.msn.com/id/30093462/from/ET/>.

[2] "Filling the Gaps In Medicare Part D." Center for Medicare Advocacy. 28 May 2009 <http://www.medicareadvocacy.org/PrescDrugs_DiscountPrograms.htm>.