New Medicare Drug Benefit Excludes Some Medicines

The new Medicare prescription drug benefit will have a financial hole for people who use certain medications. For example, the drug benefit excludes coverage for benzodiazepines, a class of medications that treats a variety of conditions, including anxiety, convulsions and sleep disorders.

Some beneficiaries whose doctors prescribe the drugs must pay out of their own pocket for these prescriptions without any reimbursement from Medicare under the new law starting Jan. 1, 2006.

The companies that will be offering private drug coverage under the new Medicare drug benefit will have formularies, or lists of drugs they must offer as part of the benefit. Medicare pays for anything on the approved list. Drugs that aren’t on the list, such as benzodiazepines, may be offered to consumers by the companies through the Medicare Part D plans, but the federal government will not provide reimbursement for these treatments.

Advocacy Groups Voice Concerns

This has some advocacy groups concerned.

“People with Medicare deserve to know that their doctor may choose the medication that will work best for their conditions rather than worrying that an unintended mistake by Congress, compounded by the White House, will leave them without the medication they need,” Robert Hayes — executive director of the Medicare Rights Center, a patient advocacy organization — said.

Benzodiazepines “are prescribed in the treatment of disorders such as generalized anxiety, insomnia and seizures — disorders commonly diagnosed in the elderly population,” according to a letter last month to state officials from Dennis Smith, director of the federal Center for Medicaid and State Operations. The “vast majority of benzodiazepines” have been identified by researchers under “classes of drugs that should be avoided by the elderly,” he wrote, explaining why the federal government won’t pay for new prescriptions for these compounds. However, the federal government will pick up the tab for “alternative treatment options for those disease states for which benzodiazepines are prescribed,” according to Smith.

Hayes disputes the decision by Congress to put the drugs on a banned list for reimbursement. “When an obvious mistake will bring incalculable harm to Americans in need, it is the moral obligation of the White House or Congress to fix it,” he said.

Congress, responding to various reports of abuse, overuse and ineffectiveness among various medications, had over the years banned several classes of drugs from reimbursement under programs. These included some weight-loss medications, barbiturates and benzodiazepines. When the Medicare law creating the prescription drug benefit was passed by Congress in 2003, legislators adopted the already-existing list of drugs ineligible for reimbursement.

Rule Change Request

Health advocacy groups asked the Medicare regulators earlier this year to change the formulary rules and allow benzodiazepines to be paid for under the new law. The regulators declined, saying that they were following the congressional intent and could not use their administrative powers to change the approved list.

If individual states already pay for benzodiazepines under Medicaid, the federal and state health program for the poor, they can continue to do so after the drug benefit takes effect, Medicare regulator Smith said in his letter. And the federal government will share the cost with them through Medicaid as it does with other approved drug expenses.

Smith said that “the potential exists for severe adverse effects in patients who abruptly discontinue the use of these drugs, and because care must be taken to transition individuals to the safer alternatives,” states might want to continue coverage to maintain “continuity of care.”

Medi-Cal now covers benzodiazepines and will continue to do so after the drug benefit takes effect Jan. 1, 2006. The fiscal year 2005-2006 state budget includes $112.5 million in state funds to maintain the coverage, and the federal government will match the state’s contribution. Of the total $225 million budgeted to maintaining drug coverage for “dual eligibles” — the group of people enrolled in both Medicare and Medi-Cal — about $18 million will be allocated for benzodiazepines.

Most Seniors Could Face More Payments

But some California beneficiaries eligible only for Medicare might be on their own paying for these drugs. It is not yet clear how many might have to do so. There is potential for considerable confusion because of the plethora of possibilities offered under Part D, which covers prescription drugs for the first time in the 40-year history of Medicare.

First, enrollment in the Medicare drug benefit is voluntary, although the government expects the majority of the 40 million beneficiaries in the U.S. to enroll in the program.

Some Medicare beneficiaries already get their medications through HMOs, which are more popular with seniors in California than any other state. Health plans vary in the drugs they cover and the copayments required for their members, so the impact of Part D will different among plans, depending on how they deal with benzodiazepines.

The Medicare HMOs in California offering drug coverage as part of their benefits generally cover benzodiazepines, according to Bobby Pena, a spokesperson for the California Association of Health Plans, which represents the HMOs in the state. However, future coverage is uncertain, with some plans indicating they will exclude the drugs just as the federal government does, and others saying they might provide coverage, Pena noted.

Final decisions won’t become known until October 1, the date when plans can start marketing their coverage plans under the new Medicare benefit.

Other people receive drug coverage through a former employer and here, too, the coverage and the formularies differ. Firms can decide whether to maintain retiree drug coverage or terminate it and transition retirees to Part D. The government will provide financial subsidies to firms that keep retiree coverage that meets standards specified in the 2003 Medicare law.

Consumers Should Check Coverage

It won’t be clear until October, when companies begin advertising about the new benefit, which HMOs or stand-alone drug plans will include benzodiazepines in their lists of approved drugs. Consumers will have to check to see the terms of coverage for the prescriptions they use, whether benzodiazepines or anything else. Consumers can enroll in plans between Nov. 15, 2005 and May 15, 2006.Advocates likely will keep pressing to expand coverage in the states that aren’t as generous as California in the range of covered drugs.

Andrew Sperling, director of legislation for the National Alliance for the Mentally Ill, said that although NAMI is “very grateful for what we got” in the new Medicare law, it will make a push to add benzodiazepines to state Medicaid formularies. “We’ve got to lobby state legislatures and state Medicaid directors to take the invitation given them by (Washington) and cover benzodiazepines so they can get federal matching dollars,” he said.

More information on the Web:

The California HealthCare Foundation has additional information about the Medicare drug benefit online.

The Medicare Rights Center also provides information about the Medicare drug benefit on its Web site.

Medicare drug benefit information is available on CMS’ Web site.

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