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Memorandum of Support

Legislative Memo: Allow Part D Co-pays to Count Toward Medicaid Co-Pay Cap



A.576 (Gottfried)

Amends the Public Health Law and the Social Services Law, in relation to Medicaid payment for co-payments due under Medicare Part D

Bill Summary
This bill, if enacted, would provide dual eligibles (individuals who receive both Medicare and Medicaid) with a cost protection for prescriptions that is currently only provided to Medicaid beneficiaries who lack Medicare.  A.576 would protect all Medicaid recipients by allowing Medicare Part D co-pays to count toward the Medicaid co-pay cap limit, resulting in fewer elderly and disabled New Yorkers leaving the pharmacy without their medicine.

Background
Since the enactment of Medicare Part D, dual eligibles have endured several unjust penalties:

(1) Part D co-payments for dual eligibles are as high as $6.30 per prescription, as opposed to $3 for people with Medicaid only. 
(2) Under Part D, dual eligibles can be turned away at the pharmacy and denied prescription drugs if they cannot afford the co-pay.  This is not true for people with Medicaid only.
(3) While Social Services Law 367-a(6)(a)(ii) gives some relief to Medicaid recipients by placing a $200 annual ceiling on all co-payments, [1] co-pays under Part D do not count toward the annual cap for duals.  Dual eligibles are unlikely to meet the $200 cap solely through services other than prescription drugs, such as hospital stays ($25), clinic visits ($3) and other services.  Further, even if a dual eligible reaches the annual cap, they must continue to pay Part D-related payments.

The only protection for dual eligibles occurs if they hit the Part D catastrophic cap – when Part D payments made by the plan, the federal low income subsidy and the beneficiary reach approximately $6,447.50 – at which point there are no further co-payments for the year.  Part D catastrophic coverage is a far weaker protection than Medicaid’s annual co-pay cap.

Statement of Support
A.576 would afford dual eligibles the same protection of the annual cap granted to other Medicaid recipients by specifically allowing Part D co-payments to count toward the cap.  When the annual cap is reached, pharmacists would bill NYS Medicaid for the cost of the Part D co-payments, just as they do now for non-dual eligibles.  The cost to the state will be minimal, since dual eligibles with extraordinary prescription costs will hit the Part D catastrophic threshold during the year, at which point Medicare picks up all the costs. 

Allowing Part D co-pays to count toward the Medicaid annual co-pay cap will better align Medicare and Medicaid for our dually eligible beneficiaries, ease their co-payment burden for part of the year, and treat dual eligibles on an equal basis with Medicaid-only recipients. 

Empire Justice Center strongly supports the provisions of A.576, which would cap prescription drug co-pays for dual eligibles in New York State. 

End Note:
[1] The annual co-pay cap limit is scheduled to increase to $300 on October 1, 2011.

06/01/11