Alexandra Ramirez
Changes to Prescription Drug Plans in Maryland as of 2019
Currently, seniors in Maryland are offered prescription drug coverage through Employer Group Waiver Plans (EGWP). EGWP’s were the most cost-effective way for organizations to offer retired seniors prescription coverage after being offered Other Post-Employment Benefits (OPEB).
The EGWP’s were directed through a pharmacy benefit manager that’s contracted through The Centers for Medicare and Medicaid Services (CMS). There are three major subsidiary prescription drug policies that provided discounts that allowed for lower costs on prescription drugs for plan sponsors and their members.
There were many additional advantages to these EGWP’s. However, Maryland has chosen to do away with these plans and are forcing seniors to switch to Medicare Part D Plans, also known as, Prescription Drug Plans (PDP).
In May of 2018, Maryland Medicare beneficiaries started to receive letters from The Maryland Department of Budget and Management stating their Prescription Drug Coverage was changing from a state plan to the federal Medicare Prescription Drug Plan, after the first of this upcoming year.
The reason behind this change started when the Affordable Care Act caused changes to Medicare Part D Plans. This prompted state officials to end Maryland’s state prescription plan for Medicare-eligible retiree’s as of July 1, 2019. Governor Martin O’Malley’s administration in 2011, is behind the change, as an overall pension reform program.
July 1, 2019 was the original end date for the state prescription plans as that’s when, “the donut hole,” (coverage gap in Medicare Part D) was scheduled to end. The donut hole occurs after Medicare beneficiaries reach the current maximum prescription drug coverage (as of 2018 this is $3,705.00). After this time, seniors are required to pay out of pocket for their medications in full.
The Federal Bipartisan Act of 2018 moved the original July date, to earlier in the year, January 1, 2019. Despite protests from Governor Larry Hogan’s Administration, letters were sent out to all eligible seniors, urging them to enroll in Medicare Part D prior to the January 1, 2019, Open Enrollment Period.
How This Affects Maryland Seniors
On January 1, 2019, Maryland seniors will be required to relinquish their Employer Group Waiver Plan (EGWP) benefits. As of December 31, 2018, your state prescription coverage will automatically end.
Medicare beneficiaries are eligible for Open Enrollment for the Medicare Part D Plan from October 15, 2018, through December 7, 2018. Failing to enroll during this period will result in you having no prescription medication coverage, meaning you will pay full price for all medications. With some medications not coming in generic form, this could mean thousands of dollars in medications each month for those suffering from pre-existing medical conditions.
Additionally, you subject yourself to the Part D Penalty. The Medicare Part D Penalty gives you a monthly fee that’s calculated by however long you went without prescription drug coverage. This fee will then be added onto your Medicare Part D monthly premium once you finally obtain the Prescription Drug Coverage. Depending on how long you went will depend on how much extra you’ll be required to pay each month.
Medicare Part D is your outpatient Prescription Drug Coverage for seniors that are eligible for Traditional Medicare benefits. The individual insurance companies in your area offer the PDP benefits. Each carrier provides the same prescription benefits; however, plan coverage will vary depending on which plan is chosen and where in Maryland you reside.
With seniors across Maryland losing their state prescription benefits and being forced into a Medicare Part D Plan, many are up in arms. Their biggest concern is their out-of-pocket costs raising for prescription medications, some life or death, and whether they’ll be able to afford these medically necessary drugs.
Additionally, they have the Medicare Part D deductible which can be up to $405.00 depending on which plan is chosen. For seniors already on a fixed income, this is a giant increase as the Employer Group Waiver Plans don’t have a deductible for the state-funded insurance.
What Maryland Plans on Doing to Help Seniors
With the majority of seniors already living on a fixed income or currently on social security, any increase in their monthly costs is of great concern. With the new changes in prescription drug benefits, Maryland retirees have filed a lawsuit against the state to prevent the switch.
Four retired government employees have banded together and are suing Governor Larry Hogan and the state of Maryland. In the lawsuit, they ask to halt the switching from the state Prescription Drug Plan to the federally funded, Medicare Part D Plan.
With the pending lawsuit ahead, Governor Larry Hogan and his administration have implemented a one-year transition program. With this plan, seniors are reimbursed on all out of pocket prescription drug expenses for anything over $1,500.00. There is no limit on the reimbursement amount nor is there any household income margin to qualify.
This program will begin immediately following the switch to Medicare Part D on January 1, 2019. There will be some additional help for retired seniors offered through Maryland’s Prescription Drug Assistance Program. This program was designed to assist low- and middle-class-income families with their Medicare Part D premiums and coverage gap costs.
Additional Medicare Help
There is additional help for seniors on Medicare, not only in Maryland but all across the country. This help comes in the form of Medicare Supplement Plans.
Medicare Supplement Plans were designed to work hand-in-hand with your Traditional Medicare benefits. With your inpatient hospital benefits (Medicare Part A) and your outpatient benefits (Medicare Part B), both only covering at 80%, the remaining 20% is left for the insured to pay.
Factor in deductibles, coinsurance, co-payments and other healthcare costs that Medicare beneficiaries are responsible for, the out of pocket expenses can escalate rapidly. This is especially worrisome for any seniors living with pre-existing medical conditions.
