State To Stop Payment of Medicare Advantage Premiums for Low-Income, Disabled
California will no longer pay Medicare managed care premiums for state residents dually eligible for Medicare and Medi-Cal when the new Medicare prescription drug benefit begins Jan. 1, 2006, state officials said on Thursday, the Contra Costa Times reports (Silber, Contra Costa Times, 11/4).
A draft letter from the Department of Health Services obtained by the San Mateo County Times states, "We have informed your Medicare HMO that as of Jan. 1, 2006, Medi-Cal will no longer pay Medicare HMO premiums for you." The letter states, "You may need to pay your monthly Medicare HMO premiums yourself if you wish to keep your current Medicare HMO membership" (Vesely, San Mateo County Times, 11/4).
The state has paid the premiums for dual eligibles since 2000 as a way to reduce prescription drug costs (Contra Costa Times, 11/4). However, drug coverage for dual eligibles will be shifted from Medi-Cal to Medicare when the Medicare drug benefit takes effect (San Mateo County Times, 11/4).
Stan Rosenstein, deputy director of medical care services at DHS, said, "The basic rationale for why we were making the payments no longer exists" (Contra Costa Times, 11/4).
Under the "clawback" provision of the 2003 Medicare law, Medicare will assume the prescription drug costs for state residents dually eligible for Medicare and Medicaid, but states will have to pay the federal government as much as 90% of the estimated amount that they would have spent on Medicaid coverage for medications for dual eligibles; the rate will decrease to 75% over time (California Healthline, 10/18).
Rosenstein said California will pay the federal government about $57 million in 2006 under the provision.
CMS spokesperson Jack Cheevers said those figures are not agreed upon (San Mateo County Times, 11/4).
About 35,000 dual eligibles enrolled in Medicare managed care plans will be affected by the change and will have to decide whether to pay premiums out of pocket or enroll in Medicare's basic coverage at no cost (Contra Costa Times, 11/4). About one million California residents are dually eligible for Medi-Cal and Medicare but "only a fraction" of the beneficiaries are enrolled in managed care plans, according to the San Mateo County Times.
According to a DHS spokesperson, California paid about $38 million in managed care premiums for dual eligibles in 2005 and premiums likely will increase in 2006 (San Mateo County Times, 11/4).
The Ventura County Star on Thursday examined the confusion of insurance companies, agents and employers who "also are trying to figure out" who should "enroll in Medicare's prescription drug coverage and what plan to select" (Bruce, Ventura County Star, 11/3).
Additional information on the Medicare drug benefit is available online.