MEMORANDUM
2004 Memorandums
IM-42    05/11/04

SUBJECT:
MEDICARE PRESCRIPTION DRUG DISCOUNT CARD AND TRANSITIONAL ASSISTANCE
DISCUSSION:

Medicare is now implementing a Medicare Prescription Drug Discount Card and Transitional Assistance program.  These benefits are authorized by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173) which provides improved Medicare coverage by adding prescription drug coverage.  Full coverage does not begin until January 2006.

Beginning May 3, 2004, persons entitled to Medicare Part A or enrolled in Part B may apply for a Medicare Approved card that provides discounts for some drugs beginning June 1, 2004.  Additionally, such persons with income under 135% of poverty can apply for a $600 credit per year in prescription drug transitional assistance for 2004 and 2005.  Persons with Title XIX prescription drug coverage when they apply are not eligible for the card or $600 credit.  Application for these benefits is made to the discount card sponsor of the individual’s choice.  The Department of Social Services does not administer these benefits.

Beginning January 2006, a Medicare prescription drug benefit will be offered under a new Part D of Medicare.  All persons who receive Title XIX benefits and are entitled to Medicare Part A or enrolled in Part B will no longer have prescription drug coverage through Medicaid beginning January 1, 2006.  The Part D benefit will also replace the Medicare Prescription Drug Discount Card and Transitional Assistance program.  Prior to January 2006 additional information will be sent regarding this coverage, enrollment procedures etc.

Following is additional information about the Medicare discount drug card and $600 credit and how they relate to Medicaid:

Medicare Authorized Cards

Medicare is authorizing only certain companies to offer Medicare Approved discount drug cards.  In Missouri, there are currently 40+ card sponsors.  Most are cards that are available throughout the nation.  However, some may be specific to persons living in Missouri, some are specific to persons living in long-term-care facilities and some may be specific to a Medicare + Choice plan.  These Medicare authorized discount cards may have an annual enrollment fee of up to $30.  Each card sponsor may offer discounts on different drugs; thus, the individual will need to determine which card offers the most discounts on drugs they use.  Persons who have Title XIX prescription drug coverage when they apply for the card are not eligible.

Once enrolled with a specific card, persons cannot change cards except between November 15 and December 31, 2004 and under other limited circumstances.  Thus, persons should carefully consider which card to make application for.

Transitional Assistance of $600 Credit in 2004 and 2005

Persons whose income is below 135% of poverty, who apply and are determined eligible, will receive a $600 credit each calendar year for 2004 and 2005.  Persons with prescription drug coverage through Title XIX or through most other health insurance may not be eligible for this credit. 

If eligible, Medicare will pay the card’s annual enrollment fee and provide a $600 credit that will pay for a portion of the person’s prescription drug cost.  Medicare will pay 95% of drug costs for persons under 100% of poverty and 90% for persons under 135% of poverty until the $600 credit limit is reached.  The person will access this benefit through the discount card they have enrolled with.  The $600 will appear as a credit on the card, like our EBT benefits.  Once determined eligible for transitional assistance, the person remains eligible for the remainder of that enrollment.  Any unused portion for 2004 will usually roll over to 2005.  Persons who do not apply for the transitional assistance benefits until later in 2005 will have that year’s benefit prorated. 

Medicare Beneficiaries Apply to Card Sponsor

Application is made to the card sponsor.  Application may be made for the discount card alone or for the discount card and transitional assistance.  A person, who gets only a discount card, can apply later for the transitional benefits.  Benefits through the card can begin as early as the first of the month following application.

Persons with Medicaid or Other Prescription Drug Coverage:

Persons who receive Title XIX prescription drug coverage when they apply are not eligible for the Medicare discount card or $600 credit.  A file of Title XIX recipients will be created the 3 rd calendar day of each month and sent to the Centers for Medicare and Medicaid Services for use in determining eligibility for the discount card.  Persons found eligible for the discount card and/or $600 credit when they apply but who subsequently become eligible for Medicaid do not lose their eligibility.

  • QMB/SLMB ONLY recipients receive no prescription drug benefit through Medicaid; thus are eligible to apply for the discount card/$600 credit and are considered as meeting the under 135% of poverty.
  • spend down recipients:  Their eligibility depends on what part of the month they apply for the discount card/$600 credit.
    • Those who apply during the days of the month before they reach their spend down are not considered to be receiving Medicaid prescription drug benefits during that time period and could (if all other eligibility is met) be eligible for the discount card/$600 credit.
    • Those who apply during the day they meet spend down eligibility through the end of the month are not eligible for the discount card/$600 credit because they are receiving Medicaid prescription drug coverage.  This would include all persons who pay-in in advance of a month.
We are awaiting clearance from the Centers for Medicare and Medicaid Services regarding whether the portion of a prescription paid by the $600 credit can be used to meet spend down.  We will issue this clearance by memorandum once it is received.
  • Blind Pension and General Relief recipients may apply for the discount card/$600 credit, since they receive their prescription drug benefits through wholly State funded medical.  However, if you find a General Relief individual receiving Medicare, please explore eligibility under Medical Assistance.  Also, the Blind Pension cash grant is not counted as income in determining eligibility for the $600 credit.
Note:  The Medicare discount drug card/$600 credit is a voluntary program.   The above information will assist you and such individuals or their spouses who wish to apply for the Medicare discount card to understand their potential eligibility.

Persons who are participating in the Missouri Senior Rx program may also participate in the discount card and if applicable, the $600 credit.  If Senior Rx members use up their $600 credit, it will count as having met their deductible in the Senior Rx program. 

Persons who have prescription drug coverage through other health insurance may or may not be eligible for the $600 credit.  Such persons should contact the Medicare or CLAIM helpline to inquire how the prescription drug coverage they have may affect their eligibility.

Referrals

Refer persons requesting information about the Medicare discount drug card/$600 credit program to:

  • Medicare phone at 1-800-MEDICARE (1-800-633-4227) (TTY users call 1-877-486-2048)
  • CLAIM at phone 1-800-390-3330
These sites will answer questions regarding the Medicare discount drug program and will also give assistance in determining which Medicare drug card provides the best savings based on the prescription drugs the individual uses.  The website has a tool to help a person determine if they may be eligible and which Medicare discount card helps the individual the most.  CLAIM will have the most knowledge regarding Missouri specific issues.

NECESSARY ACTION:
  • Review this memorandum with all appropriate staff.
  • Refer persons with questions regarding the Medicare Discount Card and Transitional Assistance program to the resources identified above.
MF