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MEDICARE PART D Where Do We Stand?Where Are We Going? Juliette Cubanski, Ph.D. The Henry J. Kaiser Family Foundation Medicare Policy Project – www.kff.org/medicare Families USA Health Action 2007 Washington, D.C. 25 January 2007
,Exhibit 1 Overview Part D Plan Landscape and Enrollment
Private plan availability is higher in 2007 than 2006, and there continues to be wide variation in coverage and benefit design
The majority of beneficiaries now have drug coverage, but around 10% (~4 million) are not enrolled Views and Experiences of Beneficiaries and Providers Most enrollees say they are satisfied with their Part D plans so far, but many are still vulnerable to high out-of-pocket costs
Pharmacists and physicians have played a key role in helping beneficiaries navigate their Part D plans Unanswered Questions and Issues to Monitor ,Exhibit 2 Part D – The Medicare Drug Benefit Drug benefit is offered exclusively through private organizations, not traditional Medicare
2 types:
Stand-alone prescription drug plans (PDPs) that supplement traditional fee-for-service Medicare
Medicare-Advantage prescription drug (MA-PD) plans – integrated medical and drug benefits – primarily HMOs, PPOs Plans can change from year to year – add, drop, modify New approach to delivering a Medicare benefit Take-up is voluntary, not automatic
Standard benefit available, but plans can vary Coverage and cost depends on plan chosen Additional subsidies (“extra help”) available to people with low incomes, but subject to income and asset test “Dual eligibles” no longer have drug coverage through Medicaid
,Exhibit 3 Changes in Plan Options from 2006 to 2007 Plan participation
Mostly the same organizations but far more plan options
PDPs: 1,429 in 2006 to 1,875 in 2007
MA plans: 3,195 in 2006 to 3,971 in 2007 Monthly premiums Lowest increasing from $1.87 to $9.50
Highest increasing from $104.89 to $135.70 Benefit design and formularies Minor changes in many plan offerings, along with major changes in some others
According to CMS, at least a 13% increase in number of drugs covered ,Exhibit 4 45-50 drug plans (2 states) 51-55 drug plans (26 states) 56-60 drug plans (18 states) 61-66 drug plans (5 states) Beneficiaries in Most States Had a Choice of At Least 50 PDPs in 2007 1,875 Stand-alone PDPs Offered Nationwide 53 51 57 53 53 53 53 51 57 61 54 53 57 56 54 66 53 53 53 56 61 54 56 54 66 53 56 54 55 55 DC 53 53 51 57 45 57 59 58 53 57 53 57 56 53 60 58 46
,Exhibit 5 Most Beneficiaries Had Access to One or More Medicare Advantage Plans in 2007 3,971 MA Plans Offered Nationwide Polk County: 20 MA-PD Plans (+ 53 PDPs and 2 SNPs) San Diego County: 24 MA-PD Plans (+ 55 PDPs and 2 SNPs) Miami/Dade County: 43 MA-PD Plans (+ 57 PDPs and 19 SNPs)
,Exhibit 6 Standard Medicare Prescription Drug Benefit, 2007 Beneficiary Out-of-Pocket Spending Plan Pays 15%; Medicare Pays 80% Enrollee Pays 5% $5,451 in Total Drug Costs($3,850 out of pocket) $3,051 Coverage Gap (“Doughnut Hole”) Enrollee Pays 100% $2,400 in Total Drug Costs Enrollee Pays 25% Plan Pays 75% $265 Deductible $328 Average Annual Premium NOTE: Annual premium amount based on $27.35 national average monthly beneficiary premium (CMS, August 2006). Amounts for premium, coverage gap, and catastrophic coverage threshold rounded to nearest dollar. SOURCE: Kaiser Family Foundation illustration of standard Medicare drug benefit, updated with Part D benefit parameters for 2007 (from CMS, OACT, May 22, 2006).
,Exhibit 7 The “Standard” Drug Benefit Design is Not the Typical Part D Plan Offering in 2007 Percent of plans: Generic Only No Coverage Brand and Generic Standard Enhanced $250 Partial(<$250) $0 Actuarially Equivalent Coverage in the Gap Benefit Design Deductible Amount SOURCE: Hoadley et al. Benefit Design and Formularies of Medicare Drug Plans: A Comparison of 2006 and 2007 Offerings; November 2006.
,Exhibit 8 Part D and the “Doughnut Hole” Of 22.5 million Part D en