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September 2008 Medicare Part D Newsletter - Special Edition
:: 1. 2009 Medicare Part D Prescription Drug Plan Overview
:: 2. What are the 2009 Medicare Part D Plan Statistics in your State?
:: 3. What’s Coming Next?
:: 4. Medicare Part B Premiums Remain Unchanged for 2009
:: 5. State Pharmacy Assistance Program (SPAP) Information - Now Online
:: 6. Correction, Clarification and Update: Annual Retail Drug Costs and TrOOP
:: 7. Correction, Clarification and Update: Straddle Claims into the Coverage Gap
:: 8. A Few Closing Notes
1. 2009 Medicare Part D Prescription Drug Plan Overview
Based on recently released 2009 Medicare Part D prescription drug plan information from the Centers for
Medicare and Medicaid Services (CMS), you can expect an increase in the 2009
monthly premiums and slightly fewer Medicare Part D plans offered in your area.
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Average Monthly Part D Premium Increases
The average monthly Medicare Part D premium will increase approximately 14%
in 2009. The average monthly premium
across all 2009 Part D plans (excluding
the US Territories) is about $45.50— compared to the 2008 average monthly
premium of $40. For example, the 2009 average Part D premium
for residents of Pennsylvania
and West
Virginia will increase to $46 as
compared to the 2008 average premium of $38 - a 21% increase.
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However, as noted in our August
Newsletter, Medicare, or CMS,
expects the average Part D premium that is actually paid by Medicare
beneficiaries for basic or standard Part D coverage to be around $28, as
compared to the standard or basic coverage average of $25 in 2008.
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Monthly Premiums: The Highs and The Lows
2009 monthly Medicare Part D
plan premiums across the country will range from the lowest cost of $10.30 (for First Health PartD - Secure
in New
Mexico) to the highest premium cost of $136.80 (for Aetna Medicare Rx Premier in New
York). The 2009 variation in monthly
premiums can be compared to the 2008 national premium range of $9.80 to $107.50.
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As a comparison, in Texas,
the number of Part D plans that qualify for the Low-Income Subsidy will be
reduced by only one (1) from 15
Part D plans in 2008 to 14
Part D plans in 2009.
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A Decrease in Medicare Part D Plan Choices
Medicare Part D
beneficiaries will have fewer Part D prescription drug plan choices in
2009. Although most states or Medicare
Part D regions still have a large number of national and regional Medicare
Part D plans being offered this year, on average, there will be 49 Part D plans
available in each Part D region or state as compared to an average of 53 Part D
plans offered in the same region during 2008. For example, residents of Pennsylvania
and West
Virginia have a choice of 57
Medicare Part D plans in 2009 as compared to the 63 prescription drug plans offered in 2008, or a 11% decrease in
available Part D plans. In Ohio,
the number of Part D plans dropped by nine (9) from 58
2008 Part D plans to 49
Part D plans in 2009 — almost a 16% decrease in Part D plans.
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The Majority Part D Plans have no Initial Deductible
The standard or model
Medicare Part D plan for 2009 includes a $295 initial deductible, as compared
to the $275 initial deductible in the 2008 Medicare Part D plans; however, Part
D plans can also offer variations on the initial deductible.From our analysis, we find that 45% of the
2009 Medicare Part D plans will include an initial deductible.In other words, the majority 2009 Medicare
Part D plans will offer a $0 initial deductible or first-dollar coverage. In Florida,
30
out of the 54 Part D plans available in 2009 will have a $0 initial
deductible.
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Slight Drop in the Number of Part D Plans with partial Donut Hole Coverage
It should not surprise
anyone that, as in 2008, there are no 2009 Medicare Part D plans that offer
complete brand-name doughnut hole or gap coverage.However,
across the country, approximately 25% of 2009 Part D plans are still
offering some form of drug coverage in the donut hole and even a few Part D
plans offer limited brand-name drugs along with generics in the donut
hole. The 2009 coverage gap begins after
the total annual retail drug purchases exceed $2,700 as compared to $2,510 in
2008. (Click
here for more on the 2009 Medicare Part D plan limits.) Again in Florida,
around 28% of all Part D plans will offer some form of Gap coverage — that is, 15
out of the 54 2009 Part D plans. In South
Carolina, 23% of all Part D plans offer some
form of donut hole coverage.
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All Generics, Many Generics and Some Generics
One interesting twist for
2009 is the change in the way that donut hole drug coverage is defined.In 2008, Medicare Part D plans with donut
hole coverage were defined as plans with: All Generics, All Preferred Generics,
All Generics and Some Brands, or Some Generics. In 2009, the subtle variations of donut hole coverage have increased
even further to: All Generics, Many Generics, All Generics and Few Brands, Many
Generics and Few Brands, or Some Generics. Be sure to check the Part D plan’s formulary rather than rely on the gap
coverage designation. The gap coverage designation is simply a reference.The three Part D plans that are offering
limited Brand-Name coverage are:
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(1) Quality Health Plans - Quality Rx Plus - in Florida
with a $79.90 monthly premium and covering "Many
Generics and Few Brands" in the Coverage Gap
(2) Alliance Medicare Rx - Alliance Medicare RX - in Michigan
with a $64 premium and covering "All
Generics and Few Brands" in the Coverage Gap
(3) Dean Health Insurance, Inc. - DeanCare Rx Enhanced - in Wisconsin
with a monthly premium of $93 — covering "Many
Generics and Few Brands" in the Coverage Gap
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Will you hit the donut hole or coverage gap in 2009?
If your average retail
prescription drug costs exceed $225 per month you will go into the donut hole
sometime in 2009. If you wish to get a
better idea of how to budget for 2009, you can use our free 2009
PDP-Planner — here is a pre-filled example of our Doughnut
Hole (2009) cost estimator in action — you can substitute your estimated
retail drug costs for the value in the example.
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2. What are the 2009 Medicare Part D Plan Statistics in your State?
Have we left out an example
from your state? No problem - we have
summarized the available 2009 Medicare Part D plan information for all Medicare regions (or states) so you
are free to browse premiums and Part D prescription drug plan changes that
directly affect you. Select your state from the list below to
review specific Medicare Prescription Drug Plan Statistics.
Select a state to review the 2009 Medicare Prescription Drug Plan Statistics per State.
AK
AL
AR
AZ
CA
CO
CT
DC
DE
FL
GA
HI
IA
ID
IL
IN
KS
KY
LA
MA
MD
ME
MI
MN
MO
MS
MT
NC
ND
NE
NH
NJ
NM
NV
NY
OH
OK
OR
PA
RI
SC
SD
TN
TX
UT
VA
VT
WA
WI
WV
WY
National Statistics
| 2008 Statistics
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3. What’s Coming Next?
To sum up the changes for
2009: there are fewer Part D plans
available in most states, monthly Part D premiums will increase, and no Part D
plan will offer complete coverage of both brand-name and generic drugs in the
coverage gap — although a large number of plans will offer some generic
coverage and a few plans will offer limited Brand-Name drug coverage.
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Marketing Begins Next Week — But No More Free Lunches!
The next big event starts on Wednesday, October 1 when Part D plan providers are permitted to begin marketing their new Part D plans. Along with the beginning of this new marketing effort, October also starts the implementation of the new Medicare Marketing regulations — designed to stop high-pressure and deceptive Medicare Part D sales practices.
Although many of the new regulations do not vary greatly from the already existing Marketing guidelines used in 2008, a few new and important rules will now apply to 2009 Part D marketing. In particular, Medicare Part D plans and their insurance agents are no longer permitted to make unsolicited telephone or in-person "cold-calls" or to "cross sell" other products that you
have not agreed upon before your meeting. If you wish to discuss other Medicare products or non–health related
products, agents are required to wait 48 hours (the so called "cooling off"
period) before your next meeting.
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Also new for this year is that Medicare regulations do not allow "meals" to be served at Medicare Part D marketing events, although the Medicare regulations
allow "light snacks". To best deal with this regulation some Part D providers may decide to simply not allow any food at their marketing events and avoid the stress of deciding whether one person’s snack is another person’s meal, and therefore, a Medicare compliance problem. Click here for more information on the new Medicare Part D marketing regulations.
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Remember: There is plenty of time to review your 2009 Medicare Part D options!
Medicare Part D plan
providers are required to send you a letter (Annual
Notice of Change letter) explaining the 2009 changes in your current
Part D prescription drug plan. The
letters should arrive by the end of October. Next, like last year, the annual enrollment period (or Annual
Election Period — AEP or annual coordinated election period) for 2009
Medicare Part D plans begins on Saturday, November 15 and continues until
December 31. Please note that if you are
satisfied with your current 2008 prescription drug plan and understand the 2009
plan changes, you do not need to make any enrollment decision during the annual
enrollment period and your 2008 Medicare
Part D plan will continue with any new changes or features through 2009.
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How does your 2008 Part D
plan change in 2009? Our 2009
PDP-Compare tool is coming soon and will give a quick overview of Part D plan
changes.
Still not sure where to
begin or you have a question? Click
here to let us know.
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4. Medicare Part B Premiums Remain Unchanged for 2009
Some good news for your 2009
budget: the 2009 Medicare Part B monthly premiums will remain at $96.40 the
same cost as in 2008. Your Medicare Part
B premiums cover such expenses as physician services, outpatient hospital
services, specific home health services, and durable medical equipment.Please note however, that Part B premium
rates can be higher than $96.40 for Medicare beneficiaries with larger incomes.
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Also good news for 2009 is that the 2009 Medicare Part B deductible will remain $135, unchanged from the 2008 deductible. On the other hand, Medicare Part A deductibles will increase $44 to $1024 in 2009.Your Medicare Part A covers such items as inpatient hospital costs, skilled nursing facility costs, hospice, and specific home health care services. (Click here for the complete CMS Press Release on Medicare premiums and deductibles.)
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5. State Pharmacy Assistance Program (SPAP) Information - Now Online
Needing some additional assistance with your prescription drug costs? We now have a listing of the State Pharmacy Assistance Program (SPAP)
information online. State Pharmacy
Assistance Programs are state-funded programs that provide low-income and
medically needy Medicare beneficiaries with financial assistance for purchasing
prescription drugs. Please note that
SPAP rules vary from state-to-state.
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As noted by Medicare:"The law allows State Pharmacy
Assistance Programs to ‘wrap around’ the Medicare benefit to fill gaps in
coverage. As a result, State Pharmacy Assistance Programs will be able to
provide the same or better coverage for the beneficiaries who receive coverage
through state programs now, at a lower cost per beneficiary for the states
because of the availability of the Medicare drug benefit."Click here to see if a SPAP is available in your area.
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6. Correction, Clarification and Update: Annual Retail Drug Costs and TrOOP
Entering and exiting the Doughnut Hole.
In our September Newsletter we discussed the entering and exiting of the donut hole and found that a correction and further clarification are required.In particular, we should have explained that there are two related costs used to determine when you enter or leave the coverage gap: (1) your annual retail drug costs and (2) your true out of pocket costs (TrOOP).
Accordingly, the first
paragraph in our last Newsletter should have read that in the 2008
Part D plan year, you enter the donut hole when your annual retail drug costs reach the initial
coverage limit of $2,510 and you leave the donut hole when your total out of pocket (TrOOP)
expenses on formulary drug purchases reach $4,050.
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The first number, your total annual retail drug cost, is all of your covered drug costs (excluding monthly premiums) plus the cost your Medicare Part D plan
paid. Your TrOOP or true out of pocket costs are everything you spend alone
(and make up a part of your total annual drug cost).TrOOP costs include deductibles, co-payments, co-insurance, and donut hole costs. As
noted, TrOOP does not include monthly Part D plan premiums (click here for more about what is, and is not, covered in TrOOP).
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Here is more on how the two costs are related in a "Standard" Medicare Part D plan
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(1) Initial Deductible Phase (you pay 100% up to $275) |
(2) Initial Coverage Phase (you pay 25% and the plan pays 75% from $275 to $2,510) |
(3) Coverage Gap (you pay 100% from $2,510 until $5,726.25 or TrOOP = $4,050) |
(4) Catastrophic Phase (you pay max 5% of drug cost) |
Your
Total Retail Drug Cost |
$275 |
$275 to $2,510 |
$2,510 to $5,726.25 |
Over $5,726.25 |
And Your Portion or
TrOOP |
$275 |
$275 to $833.75 |
$833.75 to $4,050 |
Over $4,050 |
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Again, your true out of pocket costs are what you pay as part of your total retail drug costs and therefore your TrOOP accumulates throughout the year as you make your
prescription purchases. However, since most Medicare Part D plans do not exactly follow the Standard Part D plan design with different cost sharing models and initial deductibles, the total annual retail drug cost values will not always exactly match the TrOOP values
found in the table above for the Standard Part D plan. (Thanks to our reader from Edgartown, Massachusetts for asking for clarification).
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7. Correction, Clarification and Update: Straddle Claims into the Coverage Gap
As noted in our last Newsletter, Medicare beneficiaries usually enter the donut hole with a purchase that spans two Medicare Part D phases at one time, example: the initial
coverage phase and the coverage
gap. In a situation where you have a
Part D plan with co-payments and no donut hole coverage, it is our
understanding that you will typically pay the co-payment of the initial
coverage phase, plus 100% of the remaining retail drug cost balance — but the
total amount cannot exceed the retail cost of the prescription.
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For example,
if you were to purchase a medication that has a retail price of $120 with a $40
co-payment and your total annual retail medication costs are already up to
$2,410, then you only need $100 more to reach the 2008 initial coverage limit
of $2,510. So $100 of the $120 retail cost falls into your initial coverage
phase and the remaining $20 falls into your coverage gap where you are 100% responsible for the costs. So you will pay the $40 co-payment on the medication plus the $20 that falls into your donut hole for a total cost of $60. Medicare always checks to make sure you pay less than the retail prescription cost using what they call the "lesser of" logic. Since you pay $60 and that is less than $120, then no change is needed. (Thanks to Eileen L. from Massachusetts
for catching our error).
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Senior Groups, Medicare Advocates, Nursing Homes and Health Care Providers:
Please let us
know if you would like to have
information about your Organization, Facility or Company listed on our site
www.Q1Medicare.com. Click
here for our Group and Company Contact Form.
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Linking to our Online Content:
We
have a new function to help you link to one of our pages on
Q1Medicare.com. You will notice that
we have added a new text box in the upper right corner of each page on our
website with the text "Click here to link to this page on your website".If you click on this text, you will be
provided with the HTML code needed for the particular page.You can use the link just as listed, or
customize the link to your needs. Link
to our Online Content, But … Please No Unauthorized Reproduction.
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Get ready now for next year’s Part D:
Our new 2009
PDP-Planner is available at no cost and users have the option to have a copy of
their PDP-Planner results sent directly to them via eMail.The 2009 PDP-Planner can be found at www.PDP-Planner.com/2009.
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About Us:
Q1Medicare.com
is the nation’s largest private internet sources for Medicare Part D prescription drug information. The Q1Medicare.com
website is jointly operated by National Insurance Markets, Inc. (Pittsburgh, PA) and Q1Group LLC (Saint Augustine, FL).
Our Newsletter and your Privacy: We never share your personal information or eMail address with third parties.
Please Note: As a policy, we do not send unsolicited eMails. If you no longer wish to receive our Medicare Part D Newsletter, simply reply to this Newsletter with
"unsubscribe" in the subject line of your eMail.
Copyright Q1Group LLC and National Insurance Markets, Inc. (2008)
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Last updated on: 07/05/2009
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Life Insurance plays an important role in your families financial stability.
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