SUBJECT:
MEDICARE PRESCRIPTION DRUG PLAN NEW EXPENSE CODE FOR MEDICARE PART D
DISCUSSION:
The purpose of this memorandum is to discuss the Medicare Prescription Drug Plan (Part D) and to introduce the new medical expense code, “PD”.
Effective January 1, 2006, the Medicare Prescription Drug Plan (Part D) becomes available.
The medical expense type code “PD” has been added to the Medical Expense (FMXA) screen in FAMIS effective December 16, 2005 to allow staff to budget the premium that is paid for the Medicare Prescription Drug Plan (Part D).
If an applicant is not enrolled in Part D and has a Medicare Drug Discount Card, allow the full amount of the cost of prescription drugs when determining the food stamp medical expense. Staff is responsible for verifying the expense as discussed in Memorandum IM-#89, dated September 13, 2004.
NOTE: The Medicare Drug Discount Card will remain in effect until the earlier of:
- the effective date of enrollment in Part D; or
- May 15, 2006.
If the applicant has not enrolled in Part D and does not have a Medicare Drug Discount Card, anticipate the EUs actual out-of-pocket expenses over the food stamp certification period.
Reminder: In order for FAMIS to correctly calculate future COLA adjustments, these medical insurance premiums must be accurately coded.
- Medicare Prescription Drug Plan costs must be coded as PD,
- Medicare Part B must be coded as SM.
The cost of Medicare premiums coded something other than SM are not automatically adjusted during the COLA process each December and must be manually adjusted by staff.
Food Stamp Policy
Food Stamp Policy for allowable medical expenses is changed to considering only unreimbursed out-of-pocket expenses for prescription drugs. Treat Medicare Part D expenses like all other expenses incurred by an EU according to established verification and budgeting procedures.
Most food stamp EUs will qualify for a low income subsidy and will pay no premium for Part D, unless they choose a higher priced plan with a premium. The income limits to qualify for low income subsidies are $14,355 per year ($1196.25 per month) for a single person and $19,245 per year ($1603.75 per month) for a couple. If an EU qualifies for a low income subsidy the following applies:
- premiums will be reduced or eliminated;
- deductibles will be reduced or eliminated;
- co-insurance and co-pays will be reduced; and
- the “coverage gap” is eliminated.
When an EU applies for food stamps, ask each elderly or disabled member if they participate in Medicare Part D. Enter the medical expenses on the Medical Expense (FMXA) screen. Verify all out-of-pocket expenses and monthly premiums of the elderly or disabled EU member as set forth in the Verification Codes in FAMIS 
chart and in the Food Stamp Manual sections 1115.035.15 - 1115.035.15.25.
EXAMPLE: Mr. Smith claims medical expenses of $25 per month in co-pays (code RX) on prescriptions and a premium of $32 per month for Medicare Part D (code PD). The caseworker verifies the co-pays by a telephone call to the pharmacist. Mr. Smith provides the worker verification of the premium amount.
All of Mr. Smith's medical expenses are entered on the Medical Expense (FMXA) screen in FAMIS. Mr. Smith's medical expense deduction is $22 ($57 monthly less $35).
Active food stamps EUs have no obligation to report changes in medical expenses. If an EU reports that an EU member has a change in medical expenses, change the allotment if necessary and if permitted by the EU's reporting requirements. Refer to the Food Stamp Manual section 1140.000.00 Interim Contacts.
Food Stamp Manual section 1115.035.15.10 is revised to include Medicare Part D and the PD code.
Temporary Assistance Policy
The expense code PD is not an allowable expense for the Temporary Assistance Program.
Child Care Policy
For the Child Care Program PD is an allowable expense. Obtain verification of the expense as stated in Allowable FAMIS Verification Codes chart. If an unacceptable standard of verification is entered for the expense, FAMIS will create a PEND for the case until the worker enters an acceptable form of verification.
NECESSARY ACTION:
- Review this memorandum with appropriate staff.