"Newsmaker of the Week" is presented by the SCV Press Club and Comcast, and hosted by Signal Multimedia Editor Leon Worden. The program premieres every Wednesday at 9:30 p.m. on SCVTV Channel 20, repeating Sundays at 8:30 a.m.
This week's newsmaker is Jeff Flick, Region 9 Administrator of the U.S. Centers for Medicare and Medicaid Services. Questions are paraphrased and some answers may be abbreviated for length.
Signal: You're the Region 9 administrator for Medicare; how large an area is that?
Flick: It includes the four states of California, Arizona, Nevada, Hawaii, and then there are three territories way out in the Pacific. So it's a pretty good-sized territory.
Signal: OK, so you're the head honcho. Tell us all about the prescription drug program that went into effect Jan. 1.
Flick: I am indeed. It's really a huge program for us. ... It's a brand new program for Medicare. It's designed to provide very important help that just about every Medicare beneficiary needs.
It really saves some money on the cost of prescription medications, and provide(s) the very important insurance that people need. Because you never know. Conditions happen, health care situations develop, and you might be in need of very expensive medicines. We want to make sure you have the insurance protection you need to get those medicines.
Signal: How does it differ from what has gone before?
Flick: The big change about this new part of Medicare is the fact that there are options and choices for individuals. Individuals really get to choose the kind of coverage that's going to work best for them.
There is a fairly large number of options, but the options are important. We have what is called the "standard benefit" option, which is lowest level of benefits. Those kinds of standard benefit(s) are available very affordably. They are priced as low as $5 a month here in California. It is designed to provide just the basic coverage. But if people really get a serious health care situation, there is fantastic catastrophic coverage available. So you sort of have a limited standard level of benefit; then you have richer levels of benefits for people who are already taking lots of prescription medications. Even if the premiums go up as the coverage gets richer, you might find that's where you save the most money if you're already taking a lot of prescription medication.
Signal: Do the co-pays inversely parallel the premiums? If you're on the $5-a-month plan, you have a big co-pay?
Flick: They do. I mean, it fluctuates. If you have the standard benefit program, the standard benefit is still pretty darned good coverage. On average it covers better than 50 percent of your prescription medication cost, so it's still pretty good. But there are coverages that go beyond the standard, where you are lower co-pays, and of course some of the coverages completely eliminate this famous — what some people call "doughnut hole," but its actually a gap in coverage that is built into the standard benefit.
Signal: How do you figure out which plan is right for you?
Flick: There is a lot of help available, and it's something that the (readers) really need to focus on, really need to pay attention to.
The easiest way to do this is to first, get yourself a little bit organized. And it doesn't take a lot of work, but you've got to have your Medicare card, which has all of the important information that you need, and a list of current medications that you are taking — the name of the drug and the dosage. So you do a little bit of homework up front.
Once you do that homework, now you have several options. You can simply call 1-800-MEDICARE. You can do that any hour of day or night. There are trained operators there. They will take that prescription information, put it into the computer — the computer really does the hard work for us here — and the computer will then tell that operator, who will tell the caller, based on the medicines you are taking right now, "Here are the three top plans that cover all the medicines you are taking now, and they give you the lowest out-of-pocket costs." That's where most people start, looking at the top three programs for them. It's really as easy as making a phone call, 1-800-MEDICARE.
But there are other things people can do. If you're comfortable using the Internet yourself, you can simply go to www.medicare.gov — and you can look this up yourself right on the Web site — you click on something called Drug Plan Finder. It's a really pretty straight-forward tool. You can go and you can check out all this information personally on the Internet.
But there are still two other very good options available. Some people don't like the telephone, and some people don't like the Internet. They'd rather sit down face-to-face with somebody who can actually walk them through this program. We have wonderful and very well-trained volunteers in the state of California. They are called HICAP (Health Insurance Counseling and Advocacy Program) organizations. These are people who are trained to help people understand all of their Medicare benefits, including this new drug coverage, so you can call your local HICAP organization, schedule an appointment, come in and sit down face-to-face with someone who will help you understand the programs that are available and the drug coverage that is best for you.
The easiest way to get the HICAP phone number is to simply call 1-800-MEDICARE, tell them your ZIP code, where you live, and they will be able to give you the telephone number for the local HICAP that's closest to you.
Signal: How does a person's income play into this?
Flick: You know, it's very interesting. That's one of the other aspects of this program that is new, that is different from the basic Medicare program, and I think it's a really good idea.
Here's what Congress did: They sat down and they said, "Listen, everybody needs access to prescription drugs, and we need to have a benefit that every single Medicare beneficiary can access, and we need to provide a range of coverages where the beneficiary pays for part of the cost, and the program pays for part of the cost. But there are some people who are on very limited incomes, and those individuals, in order to access all of the benefits of this program, they need some extra help."
So Congress built into this law a provision where anyone who is earning — as a married couple, less than $19,200 per year, or a single person making less than $14,300 per year — if they are making those incomes or less, and if they have limited assets available to them, they get what's called extra help. Which means they get an extraordinary drug benefit. Very comprehensive coverage.
Most of these individuals will pay no premium at all for the coverage. They will have no doughnut hole. They will have no gap in coverage. They will have no deductible. The only thing they will pay are modest co-payments, usually $2 for a generic or preferred brand or $5 for prescription drugs that are not preferred.
And if any of your (readers) are in those income categories, or if they have friends, or if they know people who have Medicare with limited income, they should encourage those individuals: Please go to your local Social Security office. Call Social Security, access them on the Web, get to Social Security. They have the applications. It's a pretty easy application to fill out, and when you fill out that application, you may be entitled to a really great drug benefit at almost no cost at all.
That's what Congress did to make sure that people with limited incomes get the full benefit of this program.
Signal: For people whose only income is Social Security, is there any impact on their Social Security benefits?
Flick: No. There's no impact at all in their Social Security benefits. But it has the potential to have impacts on food stamps and other things. When you talk to Social Security folks, you can get into all that.
But anyone who qualifies based on income, they're going to get a very rich drug benefit — a drug benefit that, for many people, will be worth as much as $4,000 a year, and they will be getting it for virtually no cost. So it's a real good deal for any senior or any Medicare beneficiary with limited income.
Signal: Are we only talking about seniors, or do disabled Medicare beneficiaries also qualify?
Flick: We're talking about every single Medicare beneficiary. So obviously that includes seniors, but it also includes — there are almost 7 million disabled individuals who have access to the Medicare program. So it's everyone who has Medicare, whether you have Part A or Part B, or both Part A and Part B. If you have any part of Medicare coverage, you are entitled to this new prescription drug benefit — something that is available to every single Medicare beneficiary.
Signal: Normal eligibility is still age 65, right?
Flick: That's right.
Signal: As the baby boomers age, is the Medicare eligibility age going up?
Flick: It is. It goes up in a couple years to age 66. That's — by the way, when I get (into the program), I get in at 66 — and then it eventually goes up to 67. So it starts to move up a little bit for people who are in certain age brackets. But not a lot. We go from 65 up to 67.
Signal: As for enrolling in the prescription drug program, time is of the essence?
Flick: It is. The program has already started. So if there are any of your (readers who) have Medicare coverage (and) have not yet signed up for the prescription drug benefit, they still have some time to do it. They have until May 15 to pick a plan and to enroll. But if they are out there spending their own cash today for prescription medications, they probably want to sign up fast, because as soon as they sign up, they start to save.
So if they sign up any time in the month of February, their coverage actually begins March 1. And as we said before, there is a lot of real good help available. It really is not that difficult, once you get a little bit of help with this. So people who are out there spending their own cash for prescription medication should think about this really hard and should probably act in the month February.
Signal: After May 15 there is a penalty?
Flick: There is. Here's the way the program works. If you don't sign up in the program by May 15, you have an opportunity every year to sign up with the program. There's what we call open enrollment, and many of the people under 65 understand what open enrollment is — it's that one time of the year when you get to make decisions about your health coverage. In the Medicare program, that is going to be from Nov. 15 to Dec. 1 of every year. So you can sign up any year you want.
But if you delay, if you do not enroll by May 15 and then you decide to enroll later on, there is a penalty that is applied. That penalty is 1 percent per month for every month that you delay. So for most people, the wise decision is going to be to enroll today, because even if you're fortunate enough today to not need any medicines at all, chances are in the future, you are going to need prescription drugs.
And the prices are so good today. That's exactly what I was talking about with this standard benefit. There are some Medicare beneficiaries who are in great, great health and not taking a single medication. And good for them. But they don't know what their heath is going to be like next month or six months from now, or something may happen and they may need medicines. They can get that basic coverage for as little as $5 a month. And if they get that, they don't ever have to worry about penalties in the future, and if they happen to get sick — I will give you an example of how good this coverage is. Some people who have cancer or other serious diseases can spend $50,000 a year on medicines. That's how expensive this can get if you have certain kinds of medical problems.
Even if you choose the standard benefit, the lowest level of benefit at the $5-a-month premium, if you get into that situation where you need $50,000 worth of drugs, this program will pay for over $45,000 of the $50,000 cost. So you get a lot of catastrophic coverage for a pretty modest premium.
Signal: So if somebody is 65, 66, 67 today and in great shape, and then something happens at 70, 71, 72 and they decide, "Gee whiz, I'd better enroll," they're going to be penalized 1 percent per month for all five years or however long they waited?
Flick: Exactly right. This happens almost every week in my office. This is actually not a new concept in Medicare.
Many of your (readers) might know about Part B in Medicare, which is also voluntary. Some people pay those Part B premiums and they get that important coverage for doctor bills and outpatient care. Some people choose not to. Well, the same thing happens in Part B. If you wait basically until you're sick and then you decide to get coverage, there are penalties. And the penalties are quite steep.
Just about every week, someone shows up in my office very, very upset. From 65 to 70 they were in great health and they didn't need that insurance coverage. Now they're 70 years old, now they're sick, now they're paying 60 percent more. One percent a month, 12 months a year, ends up being 60 percent more. That's a heavy burden to pay. And now they're upset at themselves. "Why did I wait? Why didn't I get this insurance when it was first available?" It's the exact same thing with the prescription drug benefit. People can do it when they want. But when they join a plan later on, they will face that penalty.
Signal: Somebody in that situation who doesn't sign up today and decides five years from now that they need it — is that person better off with the new plan, or would they have been better off before the plan went into effect on Jan. 1?
Flick: Before the new plan came into effect, there was no coverage for medicine through the Medicare program.
But you raised an interesting point. Some people with Medicare have very good drug coverage, and one of the other unique things this law does — it actually helps those people who already had good coverage, who had it under an employer or a labor union, it helps them keep that coverage. Because any private employer or private plan that provides very comprehensive prescription drug benefits to Medicare beneficiaries will now get a subsidy. They'll get a little bit of help from the government so that these plans can hopefully continue to provide the benefits that they've provided in the past.
Some people will get a letter from their current prescription drug plan company saying, "We already have a plan that is as good as Medicare." And if that is the case, those individuals can absolutely stay with the coverage that they have, and if they later decided to join a Medicare plan, there won't be any penalty, because they already have coverage as good as the Medicare coverage.
Signal: Seniors around these parts haven't exactly been flocking to sign up. Why do you think they aren't?
Flick: The national numbers, and even the numbers in California, are actually quite good. Today we have 24 million people taking advantage of this prescription drug program — 24 million out of 42 million. That's a pretty healthy start. That's nationwide. In the state of California, today we have about 3 million people who are already participating in this prescription drug program. That's 3 million out of the 4.2 million who are eligible for Medicare in California. So we're actually off to a pretty strong start.
Now, some of that population, however, was auto-enrolled into a program. And when I say "auto enrolled," I'm talking about that population that is covered by both the Medicare program and, in California, also has Medi-Cal coverage. Somebody who has both — Medicare and Medi-Cal — they used to have prescription drug coverage through the Medi-Cal program here in California. In January, all those individuals were converted over. They can either pick their own plan, which many did, or we would assign them to a plan, because we wanted to make sure that those "full-benefit dual-eligibles," we call that population, they didn't miss a day of coverage. So we put them automatically into a plan if they didn't chose their own. In California that's almost 1 million. But then there are 2 million other people who are in this prescription drug program today. That's a lot of people here in California.
Some of those people were in health maintenance organizations. That's another component of this (that) we ought to talk about. Some of those individuals chose a stand-alone drug company. There are really two ways to go with this benefit.
Signal: For the Medi-Cal people who were converted, are their new premiums and co-pays comparable?
Flick: Yes. There's not really a lot of change for those individuals, except now, of course, they're in a private drug plan, run by one of 19 or so different companies that are operating here in California. The coverage is very, very comprehensive. They don't have to pay any premium; they have no deductible; they certainly don't have to worry about the coverage gap or the doughnut hole.
But here's the one change. Under the new program, there are modest co-payments that are the responsibility of the beneficiary. When I say "modest," for most full-benefit dual-eligibles, those people who have both Medicare and Medi-Cal, they are expected to pay a $1 co-pay if the drug that they are selecting is either a generic or a preferred brand, or a $3 co-pay if the drug that they're accessing is a brand that is not preferred.
So that's relatively new. Under the Medi-Cal program here in California, there was a $1 co-pay. But the $1 co-pay was really not required, and it was waived pretty liberally. So many people here in California were used to getting prescription medicines paying nothing at all. So the one change for the full-benefit dual-eligible population now is that they have these co-payments of $1 or $3. And that's something new, and that, of course, was done on purpose to encourage people to think a little bit about the possibility of generic and preferred brands. Because when people choose those products, lots and lots of money is saved, and it helps the whole benefit to be affordable.
Signal: Is there anything to hold down the cost of co-payments?
Flick: Actually, the way the program is designed, the co-pays will go up at the same rate that the overall drug program goes up. There are modest increases that we expect every year, but there is an important thing about this co-pay that I want to point out to people. That is an opportunity under this program to get 90-day prescriptions. One of the ways to cut back on these co-payments is to either go to a 90-day prescription through a mail-order program — that's one option — or to a 90-day prescription at a pharmacy.
If you go to these 90-day prescriptions, then of course you only pay that $1 once every three months instead of every month. So that can also help to drive the cost down. I don't know about you, but for the prescription drug that I take, I get my 90-day prescription because I save money. Most people under 65 are pretty familiar with that, and that is a concept that is now being introduced into the senior population.
Signal: You mentioned people in HMOs and other programs. How are they affected?
Flick: People in the health maintenance organizations can stay right in the health maintenance organization they're in right now.
The good thing about that is, a good many of the health maintenance organizations have unbelievably good prescription drug programs, especially in Southern California. In this part of California there are many plans with no cost, zero premium. Pretty hard to beat. Free. Many of these plans actually have coverage into the coverage gap. They have coverage much better than the standard benefit.
So for any (readers who) are thinking, "Boy, I want the best deal possible," they ought to look at the HMOs and look at the drug coverages that are offered by the major HMOs in this area. They'll find very comprehensive coverage, and they'll find premiums that in many cases are zero.
Signal: If they're in an HMO today, do they have to pay an additional premium to enroll?
Flick: Win many cases the answer is no, the premium is zero. But they might have to — some of the HMOs do charge a premium, so they need to contact the HMO that they're with today to find out exactly what the offering is from that HMO. Of course, they can call 1-800-MEDICARE and get the same information.
But they're going to be, I think, pleasantly surprised because most of the HMOs have very, very competitive products. If you look on the PDP (Medicare Prescription Drug Plan) side, we talked about the lowest plan in California is $5 a month. The highest plan is $66 a month. So you have a range. But most of the HMOs plans are at a zero premium in the southern part of California.
Signal: Say somebody's medical condition changes, or they decide later on, for whatever reason, that a different plan would work better for them. How easy is it to change plans?
Flick: Everyone, of course, can change once a year. We have that open enrollment period. So every year, Nov. 15 to Dec. 31, people can change plans.
Right now, because we're still in the enrollment period here, for those people who joined a plan in November or December, they can change it one time between now and May 15. So if they are in a plan that is not working for some reason, they have an opportunity to change the plan.
For those individuals who are covered by both Medicare and Medi-Cal, a special exception was made, and those individuals can change plans whenever they want. They can literally change plans 12 different times a year.
Signal: Word is, there are scam companies out there that offer to help people wade through this thing. What should people watch out for?
Flick: Here's what people should be careful about. Anybody who knocks on their door and says, "Hi, I'm here from the Medicare program to help you with this benefit," they are not telling the truth. No one is allowed to go door-to-door in this program.
They are allowed to do outbound calls, but only if they pay attention to all the rules and regulations and requirements.
The most important thing that viewers should pay attention to, if they have any questions whatsoever, or if anyone is bothering them and they want it to stop, all they have to do is say, "Stop." That individual better not make another phone call, better not send another piece of mail, better not do anything at all to contact them — and if they do, or if they have any questions about who they're dealing with, please pick up that phone. 1-800-Medicare.
Signal: Does this program cover drugs from Canada or any other country?
Flick: No. That's one of the provisions of the program: It covers prescription medications here in the United States.
Of course, with the kind of coverage that's available, the thinking is that most people won't have to think about going to Canada or Mexico or anyplace else for their medicines, because now they're going to be affordable. But they are medicines that are provided here in the United States. So it doesn't cover medicines in other countries, or for people who sort of shop the Internet. Personally, I think that's a pretty risky thing to do, because they have no idea where those drugs are coming from. If they do that, it's not covered. Now, mail order, of course, is covered here in the United States.
See this interview in its entirety today at 8:30 a.m., and watch for another "Newsmaker of the Week" on Wednesday at 9:30 p.m. on SCVTV Channel 20, available to Comcast and Time Warner Cable subscribers throughout the Santa Clarita Valley.
"Newsmaker of the Week" is presented by the SCV Press Club and Comcast, and hosted by Signal Multimedia Editor Leon Worden. The program premieres every Wednesday at 9:30 p.m. on SCVTV Channel 20, repeating Sundays at 8:30 a.m.