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Averting Tragedies in the Transition from Medicaid to Medicare coverage of Prescription Drugs

An Opinion by Michael B. Friedman, LMSW
First Published in Mental Health News, Winter 2006

Poor People – on Medicaid and Medicare - at Risk of Losing Drug Coverage They Have

The Medicare Modernization Act, which establishes Medicare coverage of prescription drugs, becomes fully effective on January 1, 2006. Predictable problems with its introduction have begun to make headlines. What these stories rarely make clear is that it is only poor people—people who are eligible for Medicaid as well as Medicare—who are at risk of losing the drug coverage they already have.

For people on Medicare only, glitches could delay getting a new benefit. For people on Medicare and Medicaid—who currently have drug coverage through Medicaid—the glitches in the transition to Medicare coverage could result in tragedy.

This population has come to be called the “dual-eligibles”. In New York State alone there are over 600,000 dual-eligibles. Roughly 200,000 of them have cognitive impairments, including long-term psychiatric disabilities. Nearly 100,000 of them are served by New York State’s mental health system.

Scenario for Tragedy

Here’s a possible scenario. John Smith has been diagnosed with schizophrenia for 20 years. After a long period of psychological instability resulting in volatile living circumstances, he found a medication that works for him. For the past 10 years he has avoided acute psychotic episodes and has settled into a life that he finds satisfying. Currently Medicaid pays for his medication. This fall he gets a letter informing him that Medicare will cover his prescription drugs beginning January 1, 2006 and that he can choose a plan from a list he can find by calling Medicare. The letter also tells him that he can do nothing and that he will be auto- enrolled in a plan, which is named in the letter. Information about the plan’s network of pharmacies, about the drugs the plan covers (its “formulary”), and about co-payments is provided. The letter tells him that, if he is dissatisfied with the plan to which he has been auto-assigned, he can compare that plan with ten or more other plans with below average costs and choose a different plan. To get information about these plans, the letter says, he can visit a website, call Medicare, call the State Health Insurance Assistance Program, or attend educational events in his community.

Mr. Smith is confused and does nothing. On January 2 he goes to the pharmacy he has been using for years only to be told that the pharmacy is not covered by his plan or that some of the drugs he takes are not covered or that there is a co-pay for each of the drugs he uses ranging from $1 to $3. He is already struggling to manage rent and other basic necessities on the income he gets from Social Security Disability. Co-pays are not in his budget. Obviously Mr. Smith may end up not getting his medication. His mental and/or physical condition might deteriorate. Indeed, he might have a recurrence of acute psychosis, undermining not only his mental state but also his living situation.

There are tens of thousands of John Smiths in New York State, and they are all at serious risk.

Some may end up in hospitals and nursing homes
Some may end up homeless on the streets
Some may end up in jails or prisons
Some may die

To avert tragedy there are two kinds of action that need to be taken:

Federal and state policy changes
Massive consumer education

Policy Changes Needed

Perhaps the simplest way to avoid the dreadful consequences glitches can have is to run a dual system for a transitional period. That would mean that for 6 months or a year, dual-eligibles who cannot get the Medicare coverage for which they are eligible would automatically continue to have Medicaid coverage.

Other policy decisions that would help include:

Medicaid coverage of drugs not covered by Medicare
A 90-day supply of medications at the end of 2005
Medicaid coverage of co-payments
Extension of New York State’s EPIC program to people with disabilities

There is Some Good News

The good news is that both the federal and New York State governments are aware of the risks and have taken some steps to address them. For example, the federal government has ruled that all plans must include in their formularies “all or substantially all” anti-depressant, anti-psychotic, and anti-convulsant medications. It is not clear that all of the medications will actually be in the formularies, but the ruling is certainly a step in the right direction.

In addition, New York State has said that state Medicaid will cover all medically necessary prescription drugs available in New York State’s Medicaid program if they are not covered by Medicare. We are not yet clear how complex the process will be or how long it will take for someone needing a medication not covered by Medicare to get it. But this too is certainly a step in the right direction.

Consumer Education is Essential

Whatever policy decisions are made, the transitional process is likely to be exceedingly difficult for people becoming eligible for Medicare coverage. Education regarding their choices and about how to actually get coverage is essential.

The Federal government has developed a variety of educational mechanisms including advertising and an interactive website. New York State has also been alert to the issues and has begun training aimed at ultimately helping people who are dually eligible make the choices they have to make and learn how to get coverage. For example, the New York State Office of Mental Health has already provided trainings in its five regions.

Mental health Providers and Advocates are Helping

In addition, New York State’s mental health providers and advocates have stepped up to take responsibility for helping people who use their services. The Coalition of Voluntary Mental Health Agencies in New York City has established a provider help line and published a guide. The Mental Health Association in New York State has organized education and training as has the Council of Community Behavioral Healthcare, the New York State Rehabilitation Association, and others. NAMI-NYS has also published a brief guide.

At the federal level, The National Mental Health Association in collaboration with several other national groups has developed a website for both providers and consumers.

All of these organizations understand that each person who is dually eligible will need to have individualized help to manage their transition from Medicaid to Medicare. And all of these trade associations are preparing their providers to sit down with each of their clients to figure out what is best.

It will not be easy. I have sat through several trainings now and always get confused and have unanswered questions. Mostly, I’ve come to understand that there will not be one plan that works for everyone because individual circumstances are so different.

Despite Best Efforts, Many May Suffer

For this reason, despite all the efforts by government, providers, and other groups, I remain nervous that a significant number of people will be left without drug coverage for a period of time. It brings back disturbing memories of the early 1970s when there was a transition from locally managed welfare benefits for people with disabilities to the federally managed SSI system. People lost their housing. People came to the program I worked in because they had no other source of food. People came too because they desperately needed advocates on their behalf.

There is a remarkable advocacy effort underway to avert the problems we can anticipate. I hope it will be enough. But I wouldn’t bet on it.

(Michael B. Friedman is the Director of the Center for Policy and Advocacy of The Mental Health Associations of New York City and Westchester. He can be reached at center@mhaofnyc.org. The opinions in this article are his own and do not necessarily reflect the positions of The Mental Health Associations.)

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