Seniors’ drug costs likely to spike under new rules

PHOTOGRAPHER: Sara Foss

Drastic changes to the state’s supplemental drug program for seniors will result in higher out-of-pocket costs for enrollees, warn advocates for elderly and low-income state residents.

The cuts, which were approved by the state Legislature during last spring’s budget process as part of the effort to plug the state’s sizable deficit, are scheduled to go into effect today .

“What you’re going to see is older people on EPIC paying more for their prescription drugs,” said William Ferris, AARP New York’s state legislative representative. “It’s going to be harder for them to access affordable prescription drugs. Now you could go to a pharmacy counter, and walk away without drugs.”

As of now, seniors enrolled in the Elderly Pharmaceutical Insurance Coverage program must be enrolled in Medicare Part D, which wasn’t a requirement in previous years, and will only receive assistance with their drug costs once they reach the Medicare Part D coverage gap, known as the “donut hole.” But EPIC will also be free, without the fees or deductibles of the past.

Under the old EPIC, the maximum co-payment for members was $20 per drug; because EPIC had an annual cap on co-pays, the program picked up 100 percent of the cost of future co-payments once a senior hit the cap. Now seniors are responsible for all of their Medicare Part D co-payments unless they hit the donut hole. If they do, the EPIC co-payment of $20 will apply.

In addition, the revamped EPIC program will no longer cover members’ annual $320 Medicare Part D deductible.

“The only thing left for EPIC members is donut hole coverage,” Ferris said. “The state has really eviscerated this program.”

Ferris said that the average EPIC member is 78 and takes four prescription drugs.

According to AARP New York, there are 2,576 EPIC members in Schenectady County, 3,727 in Saratoga County, 2,062 in Montgomery County, 1,771 in Fulton County and 862 in Schoharie County.

Medicare Part D is the federal drug program for Medicare beneficiaries. In 2012, seniors will hit the donut hole and pay the full cost of their medications once they’ve spent $2,930 on prescription drugs, and emerge from it once they’ve spent $4,700. At that point, Medicare Part D will cover most of the cost of a member’s drugs for the rest of the year.

EPIC also changed in July, when the annual income threshold for the monthly Medicare Part D premium assistance benefit was increased by $3,000, to $23,000 for single seniors and $29,000 for married seniors. AARP New York regards the bump in the premium assistance benefit as a positive development.

Tough on seniors

The changes to EPIC are designed to shift costs traditionally borne by the state program to the federal program, but critics say cash-strapped seniors will wind up paying a lot more under the new system.

Cathy Roberts, a senior paralegal at the Albany-based non-profit organization the Empire Justice Center, said seniors who are fairly healthy won’t experience much of an impact from the changes to EPIC. “The folks who are going to be seriously affected are the ones who have chronic health problems and take a lot of drugs,” she said. “The drugs are expensive.” Some people take drugs that are not covered by Medicare Part D, such as barbiturates, she noted.

Roberts said she met with a group of seniors enrolled in EPIC recently, and that not a single member understood the implications of the changes that go into effect today. “I don’t think most people really understand what’s happening,” she said.

According to the New York State Department of Health, 190,000 seniors are affected by the changes, and the state is helping about 14,000 of those seniors transition onto Medicare Part D.

Peter Constantakes, a spokesman for DOH, said the state has sent letters to pharmacists and reached out to the 14,000 seniors not yet enrolled on Medicare Part D to tell them about the changes, but added that “whenever there’s any change, there are going to be people who don’t expect it. Certainly, people are going to see an impact.”

Constantakes said that DOH is encouraging EPIC members to speak to their doctors and learn whether they can take cheaper, generic drugs that are covered by Medicare Part D instead of more expensive brand-name drugs. He said there are other programs that help seniors pay for drugs, such as the federal Extra Help program, which is open to Medicare beneficiaries.

Under the old EPIC, monthly co-payments ranged between $3 to $20. Under the new EPIC, many of those co-payments will jump, with some drugs costing as much as $40, even $80.

A chart Roberts prepared shows the difference in cost that a low-income 78-year-old EPIC member with emphysema and over a dozen drug prescriptions will see under the new EPIC. The senior’s monthly drug costs before reaching the donut hole were projected to be $320.57, compared to $121.75 with EPIC; after the member hits the donut hole, those monthly costs would drop to $137.05 with help from EPIC. Without any drug coverage at all, the member’s drugs would cost over $1,700 out-of-pocket.

Pharmacists aren’t sure what to expect when the new EPIC rules go into effect, but are hoping for a seamless transition, said Craig Burridge, executive director of the Pharmacists Society of the State of New York. He said the main concern pharmacists have is that seniors will be shifted onto Medicare Part D plans that are part of a closed network. “We want them to have choices,” he said.

Bookkeeping worries

Another concern is that the changes to EPIC will “increase the number of plans and cards pharmacists have to deal with,” Burridge said. When Medicare Part D went into effect in 2006, there were over 50 plans; today there are about 20, he said, adding that beneficiaries will need time to find plans that cover the drugs they need. Now that EPIC only covers the donut hole, there’s a chance people will discover that their Medicare Part D plans that don’t fit their prescription drug needs, he said.

Ferris echoed this concern, noting that the new EPIC program will no longer provide emergency drug coverage if a claim is denied at the pharmacy counter. In the past, members with an unresolved claim would be given a three-day supply of drugs.

“Now you could go to a pharmacy counter, and walk away without drugs,” he said. “In the past, a longstanding provider would never have allowed an EPIC enrollee to walk away without drugs.”

During last spring’s budget process, over $36 million was cut from the EPIC program.

Advocates for seniors are hoping to convince legislators to restore some of that money after the new year, and adjust the program accordingly.

“We think the governor and the Legislature made a mistake instituting these cuts, and we want them to fix the problem,” Ferris said.

Roberts said that New York has been a leader in terms of helping seniors meet their drug needs, and that the old EPIC was a good program. But after Medicare Part D went into effect, many states began cutting back or disbanding their prescription drug programs, and New York is the latest to follow suit, in hopes of getting the federal government to pick up more of the costs associated with prescriptions for seniors.

EPIC is open to New York residents who are 65 or older, and provides free coverage to seniors with annual incomes below $35,000 if single or $50,000 if married.

People with questions about EPIC can call 1-800-332-3742.

“We’re going to try to make this transition the best transition we can,” Constantakes said. “It is a change, and we will provide assistance.”