CMS Part D 2012 Standard Benefit Model Plan Details
Here are the highlights for the Centers for Medicare and Medicaid Services (CMS) defined Standard Benefit Plans for 2008, 2009, 2010, 2011 and 2012. This "Standard Benefit Plan" is the minimum allowable plan to be offered.
Initial Deductible: will be increased by $10 to $320 in 2012
Initial Coverage Limit: will increase from $2,840 in 2011 to $2,930 in 2012
Out-of-Pocket Threshold: will increase from $4,550 to $4,700 in 2012
Coverage Gap (donut hole): begins once you reach your Medicare Part D plan’s initial coverage limit ($2,930 in 2012) and ends when you spend a total of $4,700 in 2012. In 2012, Part D enrollees will continue receive a 50% discount on the total cost of their brand-name drugs while in the donut hole. The full retail cost of the drugs will still apply to getting out of the donut hole even though 50% was paid for by the pharmaceutical manufacturers. Enrollees will pay a maximum of 84% co-pay on generic drugs while in the coverage gap.
Minimum Cost-sharing in the Catastrophic Coverage Portion of the Benefit**: will increase to greater of 5% or $2.60 for generic or preferred drug that is a multi-source drug and the greater of 5% or $6.50 for all other drugs in 2012
Maximum Co-payments below the Out-of-Pocket Threshold for certain Low Income Full Subsidy Eligible Enrollees: will increase to $2.60 for generic or preferred drug that is a multi-source drug and $6.60 for all other drugs in 2012
Out-of-Pocket Threshold - This is the Total Out-of-Pocket Costs including the Donut Hole.
+(($2930-$320)*25%) (Initial Coverage)
+(($6657.50-$2930)*100%) (Cov. Gap)
= $4,700 (Maximum Out-Of-Pocket Cost prior to Catastrophic Coverage - excluding plan premium)
Total Estimated Covered Part D Drug Out-of-Pocket Spending including the Coverage Gap Discount (NON-LIS) See note (2).
Catastrophic Coverage Benefit:
Generic/Preferred Multi-Source Drug (3)
Other Drugs (3)
Part D Full Benefit Dual Eligible (FBDE) Parameters:
Applied and income below 150% FPL and resources between $6,941-$11,570 (individuals) or $10,411-$23,120 (couples) (category code 4) (4)
Coinsurance up to Out-of-Pocket Threshold
Maximum Copayments above Out-of-Pocket Threshold
Generic/Preferred Multi-Source Drug
(1) Total Covered Part D Spending at Out-of-Pocket Threshold for Non-Applicable Beneficiaries - Beneficiaries who ARE entitled to an income-related subsidy under section 1860D-14(a) (LIS)
(2) Total Covered Part D Spending at Out-of-Pocket Threshold for Applicable Beneficiaries - Beneficiaries who are NOT entitled to an income-related subsidy under section 1860D-14(a) (NON-LIS) and do receive the coverage gap discount. For 2012, the weighted gap coinsurance factor is 98.082%. This is based on the 2010 PDEs (86.3% Brands & 13.7% Generics)
(3) The Catastrophic Coverage is the greater of 5% or the values shown in the chart above. In 2012, beneficiaries would be charged $2.60 for those generic or preferred multisource drugs with a retail price under $52 and 5% for those with a retail price greater than $52. As to Brand drugs, beneficiaries would pay $6.50 for those drugs with a retail price under $130 and 5% for those with a retail price over $130.
(4) The actual amount of resources allowable was updated in April 2012 for contract year 2012 and 2013.
The annual percentage increase in average per capita Part D spending -- used to update the deductible, initial coverage limit, and out-of-pocket threshold for the defined standard benefit for 2012 -- is 4.67 percent. The annual percentage increase in the Consumer Price Index -- used to update the 2012 maximum copayments below the out-of-pocket threshold for certain dual eligible enrollees -- is approximately 1.42 percent. CMS revises these percentages to correct calculation errors identified following the release of the Advance Notice."
Pharmaceutical manufacturers will be required to provide certain beneficiaries access to discount prices for certain brand drugs purchased under Medicare Part D. The manufacturer discount prices will be equal to 50% of the plan’s negotiated price defined (minus any applicable dispensing fees). These discount prices must be applied prior to any prescription drug coverage or financial assistance provided under other health benefit plans or programs and after any supplemental benefits provided under the Part D plan. The discounted prices will be charged at the pharmacy (point-of-sale). The beneficiary will not have to do additional paperwork, etc. to receive the benefit.
These manufacturer discount prices will be made available to Part D enrollees who are in the coverage gap or donut hole (they have reached or exceeded the initial coverage limit and have incurred costs below the annual out-of-pocket threshold). Medicare beneficiaries will not be eligible to receive these discount prices if they are enrolled in a qualified retiree prescription drug plan or are eligible for the low-income subsidy. The costs paid by manufacturers towards the negotiated prices of drugs covered under this manufacturer discount program shall be considered incurred costs for eligible beneficiaries and applied towards their out-of-pocket threshold. This means that the total negotiated retail drug price will be applied to the TrOOP and will count toward getting out of the doughnut hole.
Reduced Cost sharing for Generic Drugs in the Coverage Gap
The coinsurance under basic prescription drug coverage for certain beneficiaries will be reduced for generic covered Part D drugs purchased during the coverage gap (donut hole) phase of the Part D benefit. The coinsurance charged to eligible beneficiaries will be equal to 86% (or actuarially equivalent to an average expected payment of 86%). To be eligible for this reduced cost sharing, a Part D enrollee must have gross covered drug costs above the initial coverage limit and true out-of-pocket costs (TrOOP) below the out-of-pocket threshold. Medicare beneficiaries will not be eligible for this reduced cost sharing if they are enrolled in a qualified retiree prescription drug plan or are eligible for the low-income subsidy.
In some Medicare Part D regions, low income beneficiaries would have a very limited choice of zero-premium prescription drug plans under the statutory methodology for calculating the maximum government premium subsidy. For 2012, Part D plans will be allowed to charge subsidy-eligible beneficiaries a monthly beneficiary premium equal to the applicable low-income premium subsidy amount, if the plan’s adjusted basic beneficiary premium exceeds the low-income premium subsidy amount by a minimal amount. CMS will issue subsequent guidance specifying the minimal amount.
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Benefits, formulary, pharmacy network, provider network, premium and/or co-payments/co-insurance may change on January 1 of each year.
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When enrolling in a Medicare Advantage plan, you must continue to pay your Medicare Part B premium.
Medicare beneficiaries with higher incomes may be required to pay both a Medicare Part B and Medicare Part D Income Related Monthly Adjustment Amount (IRMAA). Read more on IRMAA.
Medicare Advantage plans that include prescription drug coverage (MAPDs) are considered Medicare Part D plans and members with higher incomes may be subject to the Medicare Part D Income Related Monthly Adjustment Amount (IRMAA), just as members in stand-alone Part D plans. In certain situations, you can appeal IRMAA.
You must be enrolled in both Medicare Part A and Part B to enroll in a Medicare Advantage plan. Members may enroll in a Medicare Advantage plan only during specific times of the year. Contact the Medicare plan for more information.
If you are enrolled in a Medicare plan with Part D prescription drug coverage, you may be eligible for financial Extra Help to assist with the payment of your prescription drug premiums and drug purchases. To see if you qualify for Extra Help, call: 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048, 24 hours a day/ 7 days a week or consult www.medicare.gov; the Social Security Office at 1-800-772-1213 between 7 a.m. and 7 p.m., Monday through Friday. TTY users should call, 1-800-325-0778; or your state Medicaid Office.
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A Medicare Advantage Private Fee-for-Service plan (PFFS) is not a Medicare supplement plan. Providers who do not contract with the plan are not required to see you except in an emergency.
Disclaimer for Institutional Special Needs Plan (SNP): This plan is available to anyone with Medicare who meets the Skilled Nursing Facility (SNF) level of care and resides in a nursing home.
Disclaimer for Dual Eligible (Medicare/Medicaid) Special Needs Plan (SNP): This plan is available to anyone who has both Medical Assistance from the State and Medicare.
Premiums, co-pays, co-insurance, and deductibles may vary based on the level of Extra Help you receive. Please contact the plan for further details.
Disclaimer for Chronic Condition Special Needs Plan (SNP): This plan is available to anyone with Medicare who has been diagnosed with the plan specific Chronic Condition.
Medicare MSA Plans combine a high deductible Medicare Advantage Plan and a trust or custodial savings account (as defined and/or approved by the IRS). The plan deposits
money from Medicare into the account. You can use this money to pay for your health care costs, but only Medicare-covered expenses count toward your deductible.
The amount deposited is usually less than your deductible amount, so you generally have to pay out-of-pocket before your coverage begins.
Medicare MSA Plans do not cover prescription drugs. If you join a Medicare MSA Plan, you can also join any separate (stand-alone) Medicare Part D prescription drug plan
There are additional restrictions to join an MSA plan, and enrollment is generally for a full calendar year unless you meet certain exceptions. Those who disenroll
during the calendar year will owe a portion of the account deposit back to the plan. Contact the plan provider for additional information.
Medicare beneficiaries may enroll through the CMS Medicare Online Enrollment Center located at www.medicare.gov.
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Beneficiaries can appoint a representative by submitting CMS Form-1696.