EGWP: An opportunity for AlaskaCare to maintain existing pharmacy benefits for Medicare-eligible retirees and achieve cost savings for years to come.

Effective January 1, 2019, AlaskaCare implemented an Employer Group Waiver Plan for all Medicare-eligible members covered under the AlaskaCare retiree health plan. An Employer Group Waiver Plan, known as an EGWP (pronouced “Egg Whip”), is a program offered by the federal government that increases federal subsidies for prescription drugs for the retiree health trust. This was an administrative change to how pharmacy benefits were previously managed for Medicare-eligible retirees and dependents. The pharmacy benefit for AlaskaCare retirees remains the same.

AlaskaCare was already receiving a federal subsidy for the retiree health prescription drug benefit. Moving to an EGWP plan means the retiree health trust will receive significantly higher subsidies, saving the trust up to $20 million annually and providing $40-$60 million each year in additional State savings through a reduction in the unfunded liability. The Division must manage the health plan to ensure retirees can access their earned benefits throughout the entire course of their life, and an AlaskaCare EGWP allows the State to keep existing pharmacy benefits for Medicare-eligible retirees and beneficiaries, while increasing federal reimbursement of existing costs, reducing the State’s direct costs for these benefits in the long-term.

More than 90% of states that provide drug benefits to Medicare retirees have already implemented EGWPs. As Alaska, along with the rest of the U.S., faces rising health care costs, EGWPs are a proven win-win for maintaining high quality coverage for today’s and tomorrow’s Alaska retirees.

An AlaskaCare EGWP is just one way the Division is looking to reduce the cost of health care while maintaining or improving benefits for retirees. As part of the ongoing retiree health plan modernization project, the Division has added preventive care and enhanced surgery and travel benefits, increased the lifetime maximum, and added a virtual physical therapy program. Our goal is to improve, protect, and sustain the health plan as it continues to offer high quality benefits for current and future generations of retirees.

Learn more about the AlaskaCare Retiree Health Plan Modernization Project.

If you have questions or concerns about EGWPs, we want to hear from you! You may contact the Division of Retirement and Benefits at:
Alaska Department of Administration
Division of Retirement and Benefits
P.O. Box 110203
Juneau, AK 99811-0203

You can also send comments via email to or reach the Division by phone toll-free at or in Juneau at .

You can expect to receive information from Medicare three months prior to turning age 65, and though you should enroll in Medicare Part A and B, you do not need to enroll in an individual Medicare Part D plan. You will be automatically enrolled in the AlaskaCare EGWP by the State when you provide your Medicare Number (Medicare Beneficiary Identifier or "MBI").

If you are over the age of 65 and have not yet provided the State with your MBI, you can call the Member Education Center or submit the Medicare Enrollment Verification Form (ben097) PDF .

The AlaskaCare retiree plan, through OptumRx.com , will enroll eligible retirees into the AlaskaCare EGWP. AlaskaCare will pay a monthly administrative cost to the Pharmacy Benefit Manager (PBM) for each enrolled member, and most retirees and their Medicare-eligible dependents will not be required to pay a premium to Medicare. The Centers for Medicare and Medicaid Services (CMS) does require a premium payment of high-income individuals who are eligible for Medicare. This premium is called the Income Related Monthly Adjustment Amount. If you are assessed this surcharge, AlaskaCare will reimburse you.

Learn more about IRMAA here.

You can opt out of the enhanced EGWP, but this is highly discouraged and will result in higher costs for both you and the health plan. CMS requires that you be given the opportunity to opt out of EGWP. Retirees who opt out of the AlaskaCare EGWP will be placed in a different prescription drug program with increased out-of-pocket expenses for you or your Medicare-eligible dependents.

If you are considering opting out because you are covered under another Medicare plan (e.g. Medicare Advantage that includes prescription drug coverage or another EGWP), in lieu of opting out you can provide a copy of your Medicare Advantage or EGWP ID card to the Division and we will remove you from the enhanced EGWP and place you in the AlaskaCare standard pharmacy benefit plan.

Contact the Member Education Center if you need assistance or have questions.

Medicare has a list of drugs that require pre-authorization. These required prior authorizations do not include any “step therapy” requirements. (“Step therapy” is when an insurance plan requires a member to try certain lower-cost medications first before covering a more expensive type of medication.) You may have to get a prior authorization for drugs where it was not previously required. Medicare does not allow prior authorizations from another plan to be transferred to the EGWP.

This does not mean the PBM will decide what medication your doctor can prescribe. Your doctors can still prescribe whatever medication they think is most appropriate for you and your co-pay will remain the same as it is today, $0 mail order, $4 generic, and $8 brand-name (or $0 for those covered under more than one AlaskaCare plan). Depending on what they prescribe, the medication may require prior authorization. And just like today, all claims, not just prescription drug claims, must be medically necessary in order to be covered by the health plan. Determinations of medical necessity are part of the claims processing function for all health care plans and can be complex depending on the situation. AlaskaCare has long relied on our PBM to make evidence-based decisions on medical necessity as part of the pharmacy claims processing function, and this process will continue under an AlaskaCare EGWP.

If you have multiple medical conditions and high drug-utilization, you may be enrolled in the Medicare Medication Therapy Management Program by the State. Medicare developed this program as a member protection. This program helps you and your doctor make sure that your medications are working to improve your health and provides a comprehensive review that includes:

• How your medications are working
• If they have side effects
• Any interactions between drugs you are taking

You can choose to opt out of this program at any time if you decide you no longer wish to participate You can opt out of this program.

When you reach the eligible age you will be mailed a welcome kit with information about your pharmacy benefits. You or your health care provider can begin the prior authorization process by contacting Optum Rx, who will work with you on prior authorizations. In addition, the Division will work with Optum Rx to provide targeted communications to members who are known to be taking medications that require prior authorization.

If you are considering opting out because you are covered under another Medicare plan (e.g. Medicare Advantage that includes prescription drug coverage or another EGWP), in lieu of opting out you can provide a copy of your Medicare Advantage or EGWP ID card to the Division and we will remove you from the enhanced EGWP and place you in the AlaskaCare standard pharmacy benefit plan.

Each calendar year Medicare requires Optum Rx provide AlaskaCare enhanced Employer Group Waiver Plan (EGWP) members with an Evidence of Coverage booklet. It tells you how to use your Medicare prescription drug coverage through our plan, explains your rights and responsibilities, what is covered, and what you pay as a member of the plan. Optum Rx streamlines the Medicare Part D/EGWP Annual Notices, which means less paperwork for you! Instead of automatically mailing a copy to all members, Medicare is allowing Optum Rx to provide the document electronically through the online Optum Rx member portal. You can still receive a paper copy of the Evidence of Coverage booklet upon request.

There are two ways to get an updated Evidence of Coverage booklet for your plan:

• Visit OptumRx.com and download a copy of the Evidence of Coverage from the “Programs & Forms” page (found under the “Information Center” tab).
• Call Optum Rx at the number listed on your member ID card to request to have a copy mailed to you.

Members can still expect to receive the Annual Notice of Changes in the mail, along with instructions on how to request further information.