Golden Opportunities

For seniors, the Medicare Drug benefit does help the medicine go down, by providing much needed coverage. But that infamous donut hole can leave a sour taste because you can still spend a lot of money on prescriptions. Here to help us keep more of our dough from the doughnut hole is Jeffrey Wallace, director of pharmacy at Kaiser Permanente.

Question: We've heard a lot about MEdicare Part D drug coverage. In general, how does such coverage work?

Answer: The drug benefit was introduced in 2006 - - this was the biggest change in Medicare since the inception of the Medicare program. It is provided through private insurers/companies such as Kaiser Permanente.
Beneficiaries may choose to enroll in a Medicare Plan that includes both the Medical coverage as well as RX coverage. Beneficiaries may also choose to enroll in a Medicare Prescription Drug Only plan or a Free-Standing RX plan.

Question: I understand that different plans have different, sometimes lower costs. Can you give an example?

Answer: Most carriers are offering plans without deductibles and flat co-pays prior to reaching what is called the Initial Coverage Limit. This initial coverage limit is reached when the total costs of RX (what you and the carrier pay) equals $2,510 in 2008. The coverage gap begins at this point. Once you reach the coverage gap, the co-pays you pay may change or you may have to pay 100% of the cost of the RX.
The next important level is reaching the annual out-of-pocket maximum or Catastrophic Coverage limit. In 2008, this is $4,050.
Once you reach the Catastrophic Coverage Limit, your co-pays or cost share will drop to an amount no greater than 5% of the cost of the drug.

Question: Why does it make more sense if you buy generic?

Answer: The Coverage Gap is triggered not by how much one spends, but by the cost of the drug. If you're buying a brand name drug, the drug's cost might be something like $150. Even if you are paying a $35 for it, $150 is going towards your drug spend.
The generic of that same medication may only cost $20, so only $20 goes towards your drug spend. Therefore, it takes a much longer time for you to reach the donut hole if you are using generic drugs. [So you get more bang for your drug buck because it takes longer to reach the donut hole.]
At Kaiser Permanente, we have a generic use of 86%, the highest rate in the country. This helps our members manage their drug spend, and we have fewer members hitting the coverage gap.

Question: What is the difference between generic and brand name drugs? Is one type better than the other?

Answer: Brand name drugs have only one manufacturer. Generic drugs, which are not available if the drug is still under patent, have multiple manufacturers. Marketplace competition drives down the cost of the generic drugs.
A generic version of an older drug with good effectiveness can give the same, good results as a newer, brand name drug in many cases. Kaiser Permanente has done many tests on this and there is a lot of evidence to show that we have the same results using generic medication.while lowering a patient's drug spend.

Question: What is a formulary? Does that limit the types of drugs that are covered?

Answer: A formulary is a list of drugs that are covered by a plan. [You can get that list before you sign up.] In order to be a provider of Part D RX, carriers must meet the formulary guidelines established by the Center for Medicare and Medicaid Services. Therefore, all carriers will have a formulary.
We have a committee, locally and nationally, that reviews drugs for inclusion and exclusion in the formulary. We are not looking at just price, but at evidence-based medicine, to see what's appropriate for inclusion in the formulary. We also factor in the requirements established by CMS.
Formularies do include both generic and brand name drugs. Part D carriers will often charge different co-pays for various categories such as generic, preferred brand, non-preferred brand, specialty RX.

Question: This is all very confusing. Where can we learn more?

Answer: A Kaiser Permanente is sponsoring Medicare Seminars where you can learn details about the Medicare drug benefit. You can also call to ask questions.

Is your head spinning yet? Getting the most out of your Medicare drug benefit can be confusing. To learn more, give Kaiser Permanente a call. They are offering free Medicare seminars that can help. Also, if you call them and mention Golden Opportunities, you can receive a free copy of the Healthwise for Life Handbook. The number's next. My thanks to Jeff Wallace.