Public Employee Press

Union prescription drug coverage picks up where
HIP/VIP and other Medicare Advantage plans leave off

Beginning March 1, retirees enrolled in the HIP/VIP Medicare plan will be able to use the DC 37 prescription benefit only after their drug coverage hits $2,000, or if a medication is not covered by HIP/VIP.

Before this year, DC 37 retirees in HIP/VIP and other Medicare Advantage plans in the city health insurance program used the union benefit for drug coverage.

But since the new Medicare Part D benefit started Jan. 1, HIP/VIP and most other Medicare Advantage plans for city retirees have added drug coverage, which is to be used first.

Nationwide, many Medicare health plans have added drug benefits because they can get federal subsidies to help pay for the coverage. Participants receive primary drug coverage through Medicare Advantage plans like HIP/VIP, and the DC 37 benefit now provides secondary coverage for affected retirees.

Since HIP/VIP has an annual $2,000 limit for its drug coverage, the DC 37 Health and Security Plan decided to pick up the cost once retirees reach that threshold or if a prescription drug is not covered by HIP/VIP. DC 37’s annual limit is $100,000.

Before reaching the $2,000 cap, participants must use their HIP/VIP card for prescriptions at pharmacies and make the required co-payments. After hitting the $2,000 threshold, participants can use the DC 37 prescription card and assume the union’s co-pay obligations. The co-pay is also applicable when the DC 37 drug plan covers prescription medication not covered by HIP/VIP.

More than 6,500 DC 37 retirees are enrolled in HIP/VIP. A much smaller number of retirees participate in the city’s other Medicare Advantage plans, such as Aetna and Oxford. DC 37 will also provide “wrap-around” coverage to the retirees in those plans once they reach their cap (which may differ from HIP/VIP) or if a prescribed medication is not covered by their plans.

In some instances, DC 37 retirees will find their medications aren’t covered by city Medicare Advantage plans.

Recognizing that these individuals shouldn’t be penalized because they were automatically enrolled in a plan with different preferred drugs and rules, the DC 37 plan will cover affected individuals, who should call 212-815-1234 to ask how to file for an exemption.

Retirees who joined a so-called stand-alone or independent Medicare drug plan will be covered only after their maximum coverage is reached.