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Bumpy Ride Ahead for EPIC Seniors

August 18, 2011

One of the vital safety net programs that underwent major changes in this year’s Executive Budget process is EPIC (Elderly Pharmaceutical Insurance Coverage program), New York’s prescription drug benefit for adults age 65 and older.  To help balance the state budget, the Governor and the Legislature agreed to cuts in the EPIC program, and amended sections of the NYS Elder Law affecting EPIC. 

This article provides an overview of the EPIC changes, the impact they will have on seniors and  discusses concrete steps to help seniors through the transition process.  

What are the Changes to the EPIC Program?

First – the good news. EPIC will continue to provide cost sharing assistance for seniors who reach the Medicare Part D coverage gap (“donut hole”).  Additionally, EPIC has expanded its Part D premium assistance benefit.

Now - the cuts to EPIC, which are being implemented in two phases. The first phase (relatively small impact) went into effect on July 1, 2011.  Phase 2, when the major cuts take effect, begins on January 1, 2012.

Phase 1 -- July 1, 2011 changes

The annual income threshold for the Part D monthly premium assistance program has increased by $3,000.  EPIC now pays monthly Part D premiums for seniors with incomes up to $23,000 (single)/$29,000 (married).

Another change affects ONLY EPIC deductible members – those who have to meet an annual deductible before EPIC coverage kicks in. 1  These members may see an increase in their out-of-pocket drug costs because of the elimination of the Part D deductible credit starting on July 1, 2011.  

Prior to July 1, 2011, EPIC had been applying the cost of monthly Part D premiums toward the seniors’ annual EPIC deductible.  Most seniors were given a $464 annual credit applied to their EPIC deductible (464 = 12 months x $38.67 – the monthly benchmark Part D premium amount).  Beginning on July 1, 2011, seniors can no longer use the Part D monthly premiums they pay as an allowable expense for EPIC deductible purposes, so EPIC eliminated the annual credit they had previously applied to members’ annual deductible amount. 

Some EPIC deductible members – those with incomes between $20,000-$23,000 (single)/$26,000-$29,000 (couples) – will be affected by both the expansion of Part D premium assistance and the elimination of the annual Part D deductible credit.  These members had been responsible for paying their own Part D premiums up through June 30, 2011, but as of July 2011 EPIC will pick up payment of these monthly premiums.  All the other “normal” EPIC deductible rules still apply (Part D premium credit eliminated from their annual Part D deductible, etc.). EPIC sent a mailing to all EPIC deductible members in May and June explaining the July 2011 changes. 

Phase 2 – January 1, 2012 Changes

Starting on January 1, 2012, EPIC will no longer provide:

  • Drug coverage for seniors without Part D
  • Seniors who don’t have Medicare Part D will no longer qualify for any EPIC assistance.  Those with retiree drug coverage, Medicare Advantage without drug coverage, and seniors who are not eligible for Medicare will be shut out of EPIC coverage entirely.
  • Payment of the annual Part D deductible (up to $320)
  • Seniors will be responsible to pay their own Part D deductible.  In 2012, the maximum annual Part D deductible is $320.
  • Assistance with Part D co-pays outside of coverage gap
  • This critical function of EPIC, which cushions seniors from high Part D co-pays, is being eliminated outside of the coverage gap.  EPIC will only step in to help with Part D cost sharing if and when a senior hits the Part D coverage gap.  Currently, the maximum co-pay for EPIC members is $20 per drug.  EPIC also has an annual co-pay cap; once the senior hits the cap, EPIC picks up 100% of the cost of future co-pays.   These provisions end on December 31, 2011.Beginning on January 1, seniors will be responsible for all of their Part D co-pays, with no limit, until and unless they hit the coverage gap.  Once they hit the coverage gap, the current  EPIC co-pay schedule applies -- $20 max per drug.
  • Temporary emergency coverage for seniors pursuing a Part D appeal
  • If a Part D plan denies coverage, EPIC can no longer temporarily cover the drug while an appeal is being pursued. 

The drastically “slimmed down” EPIC program starting on January 1, 2012, will no longer have its “fee” and “deductible” structure.  It will offer free coverage to all seniors with annual incomes of up to  $35,000 (single) and $50,000 (married couples).  As previously mentioned, its two remaining functions will be to provide co-pay assistance for seniors who reach the Part D coverage gap and to pay monthly Part D premiums for lower income seniors, those with incomes up to $23,000 (single)/$29,000 (couples).   EPIC will continue to facilitate enrollment into the federal Part D Extra Help (Low Income Subsidy) Program as well as the Medicare Savings Programs.

To add to the mix of changes EPIC seniors will be facing, the Part D open enrollment period (OEP) is changing too.  Starting this fall, it runs from October 15 through December 7. 

EPIC is planning to notify all members about the upcoming changes to EPIC in September, before the start of the Part D OEP.  EPIC is also conducting an extensive outreach campaign to educate EPIC members, as well as physicians, pharmacists, HIICAPs, senior service providers and others about the upcoming changes.   EPIC has developed a “key points” fact sheet explaining the changes, which you can access at  http://www.health.ny.gov/health_care/epic/2001-12_key_points_and_faq.htm.

What are Some Ways to Help Seniors Adversely Affected by EPIC Changes?   The EPIC changes will result in many seniors paying more for their drugs in 2012, which will almost certainly present a hardship for most individuals.    Fortunately, there are concrete steps to offer seniors which should help cushion the blow of the upcoming EPIC changes.  A multi-pronged approach is recommended, though this article focuses heavily on maximizing enrollment into the Extra Help program:

1)   Checking for Extra Help Eligibility:  Getting into the Part D low income subsidy (also known LIS or “Extra Help”) is the best long term solution for EPIC members who are able to qualify for the subsidy.  This is because the federal Extra Help subsidy covers the monthly Part D premiums, the Part D deductible and most of the Part D co-pays; 2 additionally, there is no coverage gap for Extra Help recipients. 

There are three basic ways to qualify for the Extra Help subsidy:  1) receiving the Extra Help subsidy through the Social Security Administration (SSA);  2) receiving the Medicare Savings Program (MSP) benefit (which allows SSA to “deem” you into the Extra Help); and 3) receiving Medicaid (with or without spenddown), another form of “deemed” status.

Although EPIC has been screening for, and facilitating enrollment into, Extra Help for its members, some LIS-eligible EPIC members are falling through the cracks.  For example, some LIS “potential eligibles” who appear to be over income for MSP may qualify if they pay monthly health insurance premiums (i.e., Medigap, Medicare Advantage, dental insurance) which reduce their incomes below MSP eligibility levels.

However, the biggest group of LIS “potential eligibles” is likely to be EPIC members who could qualify one or  more months of Medicaid spenddown coverage based on their drug costs and other out of pocket health care costs.  Getting into Medicaid spenddown for even just one month automatically deems a senior into the Extra Help program for at least 6 months, and as long as 18 months.  Any senior deemed into Extra Help between July and December 2011 will keep the Extra Help coverage through December 31, 2012.   This pool of LIS “potential eligible” EPIC seniors may only need Medicaid spenddown coverage for the sole purpose of allowing them to qualify for the Extra Help benefit, and may not know that they qualify or how to access the benefit.  Here’s where advocates can really help.

To better understand the interplay between EPIC and Medicaid spenddown, it is useful to quickly review what types of expenses can count toward Medicaid spenddown.   People applying for Medicaid can use medical bills paid out of pocket during the month of application, as well as any paid bills from the previous 3 months.   Additionally, state law allows expenses paid by state programs like EPIC or ADAP (the AIDS Drug Assistance Program) to count toward the Medicaid spenddown.  So you can include drug costs covered by EPIC during the 3 month retro period and the month of application.  Also any viable unpaid bills older than 3 months can be applied toward the spenddown.  Finally, you can deduct one month’s worth of any out-of-pocket health insurance premiums (like Medigap or Medicare Advantage) from the person’s monthly income.

Here’s just one example of an EPIC senior who could get into Extra Help through the Medicaid spenddown program:

Jane Doe is an EPIC fee senior who gets $1800/month in Social Security and pension benefits.  Her monthly income is too high for her to qualify for either the Medicare Savings Program or the Extra Help subsidy through SSA, though her countable assets are below Medicaid limits. 3  She has a Medicare health plan with prescription drug coverage and takes several medications, including Enbrel for her rheumatoid arthritis.  Her plan charges a $290 monthly co-pay for the Enbrel, but she pays just $20 because EPIC covers the remainder.  She is very worried about how she will be able to afford her Enbrel when the EPIC changes happen in January.

A little quick math helps you figure out that she can get into Medicaid spenddown based on the Enbrel costs alone, without even factoring in any other countable expenses. 
Jane applies for Medicaid and is granted one month’s worth of Medicaid spenddown coverage.  She gets deemed into Extra Help; her Enbrel co-pay drops to less than $7 per month – even less than what she was paying under EPIC!



For more information on Medicaid spenddown and Extra Help, visit the NYHealthAccess.org webpage. 

Other ways to help seniors affected by upcoming EPIC changes include:

2)   Helping Seniors Pick the Best Possible Part D Plan for 2012

EPIC seniors with Part D have generally not needed to worry too much about their cost sharing obligations, because EPIC picks up the Part D deductible, helps with Part D co-pays and offers  temporary emergency coverage for drugs not covered by the Part D plan.  Not anymore after December 31, 2011!

Starting with plan year 2012, it will be critical for EPIC seniors to ensure that they are in the most compatible Part D plan, so that they are getting the best “deal” for their individual circumstances.  The Medicare online planfinder tool (at www.medicare.gov) can help seniors and their advocates reach an informed decision about which plan to choose.   Updated information about 2012 Part D plans should be available on the Medicare planfinder tool sometime in October.

3)   Exploring Alternatives to Help Pay for Drugs

Drug discount cards, patient assistance programs offered by pharmaceutical companies, and charitable institution funds may be a source of assistance.  The national non-profit organization NeedyMeds can let you know what resources are out there to help pay for specific drugs.  Go to www.needymeds.org for more information.

4)    Screening for Food Stamp Eligibility

Most EPIC seniors eligible for Part D premium assistance are also eligible for food stamps, also known as SNAP (Supplemental Nutrition Assistance Program). 

Seniors already receiving food stamps should be sure to let their food stamp worker know about any increase in out-of-pocket health care expenses starting in January 2012.  Increased out-of-pocket health costs may result in a higher monthly food stamp benefit.  (Note: decreases in health care costs don’t have to be reported until the senior’s next food stamp recertification.)  

EPIC seniors who aren’t getting food stamps should be strongly encouraged to apply if they are in the Part D premium assistance program.  There is no longer an asset test or in-person interview requirement for most seniors.  And the Food Stamp Program can save EPIC seniors hundreds of dollars a year on groceries, and help lessen the financial blow caused by increased out of pocket drug costs. 

For more information about food stamps, go to the “MyBenefits” website at https://www.mybenefits.ny.gov/

5)    Educating Seniors about the Upcoming Changes

OK, this one is obvious. But one of the most important challenges we will all face is to make sure that seniors are aware of the upcoming changes, they understand the implications of these changes and they know where to go for help. Advocate assistance is a critical piece of the puzzle.

If you have any questions about this article, or EPIC and Medicare Part D, please contact Cathy Roberts at (518) 462-6831 or croberts@empirejustice.org


Endnotes

1   EPIC currently provides two tiers of coverage.  The EPIC fee program covers seniors with incomes up to $20,000 (single)/$26,000 (married couples), and charges an annual fee, set on a sliding scale basis from $0-300.  The EPIC deductible program covers higher-income seniors (single individuals with income between $20,000-$35,000 and married couples with incomes between $26,000-$50,000).  There is no fee for EPIC deductible members, but EPIC coverage only kicks in after a member’s out-of-pocket drug costs reach a threshold amount (deductible), also set on a sliding scale basis.
2   The maximum co-pay amount for LIS recipients in 2012 will be $6.50 per drug. 
3   The Medicare Savings Program monthly income maximum for a single person is currently $1,226 (before disregards); the LIS monthly income threshold is $1,362.  The Medicaid asset threshold for one person is $13,800.

 





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