Medicare Part D –
Think “D” for Disaster
The Advocate’s Guide for Organizing
To Improve Medicare Drug Coverage
David Grant and Marie Jobling
CARA 415-550-0828
This Workshop brought to you by…
California Alliance for Retired Americans
(CARA) 877-223-6107
in partnership with the
Medicare Advocacy Collaborative:
Health Access California
OWL - California
Gray Panthers - California
Congress of California Seniors
This workshop made possible in part by a grant
from The California Wellness Foundation.
Medicare Part D - Time to
“Shout Out” an Alarm
• Everywhere folks are talking about Part D
• Mostly, individuals are trying to figure out if it
will help or hurt them
• We need to raise the “red warning flag”
about dangers as they unfold.
• We need to “Shout Out” that Medicare Part D
has too many problems and must to be
“Reconsidered and Replaced” by Congress
Overview of Today’s Workshop
• Medicare Part D – The Basics
• Medicare Part D – An Advocate’s Perspective
- Does Medicare Part D reduce cost & improve
- Does it simply privatize a major part of Medicare
by turning over drug coverage to an
unregulated army of private drug providers
(while sacrificing the standard benefits
fundamental to Medicare?)
• CARA’s Call to Action!
Here is a CLUE…
In 2003, when Medicare Part D was
enacted, the Drug Companies…
• hired 952 lobbyists,
• spent $141 million on
• contributed more than
$30 million to campaigns.
Drug profits rose $182 billion.
Medicare Part D – Working for YOU?
What has been your
experience so far?
Welcome to Medicare Part D
“The Basics”
• Coverage began January 1, 2006 for those
• Available for all people with Medicare, but
impacts particular groups differently
• Drug Benefits provided through Private Plans:
– Prescription Drug Plans (PDP’s)
– Medicare Advantage Plans (HMO’s)
• Some Employer and Union Retiree Plans
receive government subsidies to help prevent
them from dropping drug coverage.
How it Works – The Basics
• Monthly premium: minimum of $5.31 to $66.00 per
month (in California)
• Deductible - $250 per year
• Co-payment - $500 maximum based on drug “costs”
up to $2,250
• Donut Hole – No coverage for costs from $2,250 to
$5,100 (but you must keep paying monthly premiums)
• Catastrophic Coverage – After $5,100, it covers 95%
of drug costs
• Co-pays – generally $2 - $5 for each prescription
Part D Plans – The Basics
• Plan Choice – 47 “stand alone” plans in addition to
current HMO plans
• Co-payments, deductibles, pharmacy networks vary
• All mental health drugs, immunosuppressants, AIDS and
cancer drugs are covered
• In other categories, all drugs are not covered
• Medi-Cal will continue to cover drugs not on Part D
formulary for Medi-Cal recipients
• Part D Plans can change formulary at any time
• Customer service – up to each plan
• Appeals - up to each plan
Low Income Subsidy – The Basics
• Three groups “deemed” eligible for full low-income subsidy
were automatically enrolled January 1, 2006.
– Dual eligible (Medicare/Medi-Cal)
– People with SSI
– People enrolled in Medicare Savings Programs (QMB, SLMB & QI-1)
• Those with incomes OVER this level and UNDER 150% of
poverty level are eligible but must apply through Social
Security for this benefit.
– Single – up to $1197 monthly
– Couple – up to $1,604 monthly
– Excess assets may prevent you from getting this benefit.
First, you must apply for the subsidy, then you must enroll
in a Part D Plan.
Enrollment Issues – The Basics
• Dual Eligibles (with both Medicare and Medi-Cal):
– Were automatically enrolled in a Part D plan January 1, 2006
– Beneficiaries must determine if chosen plan covers their drugs and
is accepted at a nearby pharmacy
– Drugs on the Medi-Cal formulary, but not on the Part D formulary,
will continue to be paid for by Medi-Cal
– If you don’t like your plan, you can change as often as monthly
• Medicare Only:
– Can apply for Low-Income Subsidy
– Are being encouraged to pick a Part D plan and enroll by May 15,
– You can only change plans during the annual open enrollment
period, November 15 through December 31.
– Beneficiaries pay a 1% of premium penalty each month if you do
not enroll by May 15, 2006
Dual Eligibles
• Dual eligibles in long term care facilities
No premium, no deductible, no co-pays
• Dual eligibles in the community and those in
Medicare/Medi-Cal Medicare Savings
Programs (QMB, SLMB, QI-1) or SSI/SSDI
– No premium or deductible
– Co-pays: $1 to $5 (per prescription)
– No “donut hole” of non-coverage
– No co-pay after $5,100 limit of total cost of
What did the Governor just do?
• Authorized the State to pay for
medications for those Medi-Medi’s who
are unable to get their drugs paid for by
• This coverage was only for the period
January 12 through January 17, 2006.
• Sponsors of this workshop are part of
efforts with the Legislature to get this
safety net coverage continued.
Low-income Medicare Beneficiaries
Not on Medi-Cal
• A two–step process
• Apply for a “low-income subsidy” if income
and assets are low
– Single – up to $1,197 monthly
– Couple – up to $1,604 monthly
– Assets limits vary
• Choose a prescription drug plan before
May 15, 2006 and enroll – your subsidy
should be automatically applied.
Medicare Beneficiaries with
Existing Drug Coverage
• Watch out for a letter saying if your current coverage is
at least as good as Medicare Part D – the term used is
“creditable” – not all plans are “creditable”.
• These letters could come from:
– Existing Medi-gap policies
– Medicare Advantage HMO’s
– Union and Corporate Retiree Benefit Programs
• Covered individuals can still sign up for a Part D plan,
but may lose their regular drug AND health coverage
(More on this in the “red flag” section to follow).
• If you have not yet received a letter, or are confused, call
your health plan.
Where You Can Go For Help
• Health Insurance Counseling and Advocacy
Program (HICAP): Call 1-800-434-0222 to reach
your local HICAP or go to
• Social Security: 1-800-772-1213 or go to
• Center for Medicare and Medicaid Services
(CMS): Call 1-800-MEDICARE or go to
• Your CARA Part D Toolkit and at
• Remember, most other sources of information
are trying to sell you something
Preparing Advocates to
“Raise the Red Flag”
• Presentations like what you just saw are
happening all over the state.
• We need to tell the other side of the story - that
Medicare Part D = Disaster
• We need to be “on guard” against the numerous
dangerous features of Medicare Part D
• Let’s count the ways that Part D is a Disaster…
#1 Enrollment =
Chaos and Confusion
• Enrollment is being pushed too quickly
• Enrollment decisions are too complex
• Too few resources are available to help
• Too little information is available in multiple
languages and in formats easy for consumers to
#2 Medi-Cal Enrollment
• On January 1, over 1 million Medi-Cal
beneficiaries were automatically switched to
Medicare Part D. Horror stories include:
– Pharmacies can’t access computer system to process
claims. When they do, data is not accurate.
– Phone lines for Medicare and the private plans totally
– High co-payments and totally different formularies
mean beneficiaries leave without lifesaving drugs.
– California and other states must step in to bail out the
#3 - Late Enrollment Penalty
It Lasts A Lifetime!
• Beneficiaries not automatically enrolled have until May
15, 2006 to chose a plan.
• After May 15, 2006, if you have not chosen a plan, you
will pay 1% of the average area premium PER
MONTH…FOR LIFE as your penalty!
• Example – say the average monthly premium in your
area is $50 a month. If you wait 12 months to sign up,
your premium would be $50 + $6 (12% of $50) every
month or an additional $72 per year forever! If the rate
goes up, your penalty goes up proportionately. If you
wait longer, the penalty just keeps growing.
#4 -Retirees with Current
Drug Coverage - Beware!
• Retirees with current drug coverage through a
retiree or employer health plan could lose
(not just drug coverage) by signing up for
Medicare Part D.
• Many letters to retirees regarding “creditable
coverage” do not make this pitfall clear.
• If you mistakenly join Part D, you and your family
members covered by the retiree plan may not be
able to get the coverage back.
#5 The “Donut Hole” – Not
Such A Sweet Deal
• You get no coverage for costs between $2,250
and $5,100
• You keep paying premiums but get no benefit
• It is unclear what drug costs will get counted
toward the $2,250 (i.e. all out of pocket costs or
only those that show up in the Medicare
• Many factors will make it difficult for individuals
to reach the other side of the hole ($5,100) and
to start getting benefits again.
#6 Choosing a Plan?
Welcome to the Valley of Tiers
• Already complex decisions related to cost and coverage are
now more difficult because of choices within plans.
• Many plans are organized into different “tiers” based on
whether you are using generic, preferred, non-preferred, or
specialty drugs – Higher tier = Higher cost.
• Plans may force you to try cheaper drugs, perhaps with bad
side effects, before you can get the “higher tier” drug they offer.
• In addition, plans have different costs depending on whether
you go to a preferred, non-preferred or off-plan pharmacy.
• For example, you could have as 12 different combinations of
premium and co-payment amounts and the possibility of even
more confusion if all your drugs are not covered in one plan
• End result – it is virtually impossible to make an informed
DANGER – With Part D,
You Could Pay MORE!
Annual Premium
Annual Deductible
Co-payments (varies)
Donut hole coverage gap
Additional charges based on
whether drug is covered,
pharmacy is in network, etc.
$ 445
$ 250
$ 155 - $500
$ 2,850
• How does this compare with what you pay now?
• How does it compare if you simply bought your drugs
from Canada or from places like Costco?
• How would it compare if the government could negotiate
lower drug prices, like those for the VA?
#7-12 More Dangers on
the Road to Part D
• Persons in special programs for HIV/AIDS, disabled
children, other groups face even more confusion.
• Many beneficiaries will find this new “benefit” actually
reduces assistance from other programs like food stamps.
• Beneficiaries in long term care facilities nursing home left to
fend for themselves in terms of making choices.
• Each plan has its own grievance and appeal process.
Doctors and patients are forced to deal with multiple,
differing appeal processes to get needed drugs.
• Beneficiaries will be trapped in plans even if drug
formularies changes
• Drug plans have little or no oversight from government.
#13 Unlucky California Will
Lose Nearly $420 Million
• The federal government will “clawback” $1.4
billion of the money formerly in Medi-Cal.
• Experts estimate that over-all, California will lose
more than $250 million in the first year alone.
• Since the State is no longer buying drugs
directly, it potentially loses all the discounts and
rebates, an estimated loss of $170 million more.
America Can Do Better
After all that you’ve heard, what do YOU
Will Medicare Part D reduce cost, improve
access, and increase your ability to live a
healthy life?
Together We Can Get A Real
Prescription Drug Benefit
• CARA has a plan for how to “Reconsider
and Reform” Medicare Part D,
• Here are at least 4 Ways you can help.
At the national level…
• Take the CARA Medicare Petition and get everyone you
know to sign it.
• Tell people about the problems with Part D and urge them
to join the fight for a Real Drug Plan.
• Join the CARA Action Team (CAT) and participate in
meetings in your area. Call 877-223-6107(toll free) for the
Team in your area.
• Organize to hold your representative accountable for real
relief from high drug costs
– Support HR 3861, the Medicare Informed Choice Act (Stark,
Schakowsky) to extend the deadline
– Support HR 752 (Stark, Berry) the Medicare Prescription Drug
Savings and Choice Act, to create a uniform drug benefit in
Medicare and require that Medicare negotiate for the best
possible prices.
• Dial the House & Senate switchboard
• Ask the operator for the first representative you want to reach
• When connected: “Hello, I live in your district and I’m calling to
ask you to:
– Support HR 3861, the Medicare Informed Choice Act to
extend the enrollment period and protect against bad choices.
– Support HR 752, the Medicare Prescription Drug Savings and
Choice Act, to create a uniform drug benefit in Medicare and
require Medicare negotiate for the best prices
– Reconsider & replace Medicare Part D with real reform that
saves Medicare and provides relief from high drug prices.”
• Repeat until you have called all 3 of your representatives!
• Call today, call often, get your friends to call too!
• Be part of a team to follow-up on today’s
– Take what you’ve learned today back to other
groups you’re involved with
– Attend local Medicare Part D trainings and
workshops to help “raise the red flag” about
problems with Part D.
– Write a “Letter to the Editor” about the pain
and confusion Medicare Part D is causing
(see information in your toolkit).
• Share your experiences and those of people you know
– “Tell Your Story” form is in the Toolkit to help make the
issues real to the media and local policymakers.
– Tell your story today!
– Collect stories from others tomorrow
– Host a local “Shout Out” to get the press to cover the
“dangerous side” of Part D.
• The Tool Kit can help guide you with these and other
• Your local CAT Team can help you organize a “shout-out
and media” in your area.
At the state level…
• Support State legislation being developed for the 3rd year
of the statewide OuRx Coalition - Year 3? – Part D!
– Establish a “wrap-around” benefit to protect “MediMedi’s”
– Provide assistance with co-payments and deductibles
– Increase funding for consumer counseling and support
– Demand oversight and regulation of drug plans
• Participate in state hearings on Medicare Part D
• Coordinate “shout-outs” and legislative visits through the
local CAT’s to participate in your area.
CARA member groups
Local senior and disability advocacy groups
Pharmacists and their organizations
Non-profit housing providers to seniors and
persons with disabilities
• Nursing Homes & Residential Care Facilities
• Legal Services Programs
• Paid and family care givers
• Now it’s time to move into action
• Join us as we plan the next steps in your
• And to end on an up-beat note, join us in
song as we prepare to march and sing our
way into the history books.
Stay Involved - Join the CARA
Action Team (CAT)
The Alameda County CAT meets
every 2nd Monday, at 10:00 a.m.
South Berkeley Senior Center
Ellis at Ashby in Berkeley
For more information, contact
Jim Forsyth at 510-581-5169.

Medicare Part D – as in D for Disaster