BCNEPA/FPH 2006 Seminar Medicare Before and After Part D April 26, 2006 Randy Grabiak Highmark...
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Transcript of BCNEPA/FPH 2006 Seminar Medicare Before and After Part D April 26, 2006 Randy Grabiak Highmark...
BCNEPA/FPH 2006 Seminar
Medicare Before and After Part D
April 26, 2006
Randy GrabiakHighmark Senior Products
Medicare Part D Product Director
Agenda
• Trends in the Senior Market
• Part D Benefits & Guidelines
• Plan Participation
• Provider Challenges
• Questions
Seniors’ Sources of InformationAMONG SENIORS: Percent who say they would be very likely to turn to each of the following for help in deciding whether to enroll in a Medicare drug plan…
Source: *Kaiser Family Foundation Health Poll Report Survey (conducted Mar. 31-April 3, 2005)
**Kaiser Family Foundation/Harvard School of Public Health (conducted October 13-31, 2005)
49%33%
27%
27%23%
21%
18%
8%
Trends in the Senior Market
Your doctor
Your pharmacist
A Social Security office, website or phone number
Friends or family members
A Medicare mailing, website or phone number
A health insurance company
A local seniors’ group or community organization
An employer or union
Survey March 31 – April 3, 2005
Medicare
Your doctor
Your pharmacist
Social Security
Friends or family members
A local seniors’ group or community organization
Medicaid
An employer or union
Survey October 13 – 31, 2005
9%14%
16%
20%24%
25%
32%
33%
Health Insurance Trends Prior to Part D
Medicare Advantage
7%
Employer-Sponsored
28%
Medigap10%Medicaid
15%
Other6%
Self-Pay28%
Part A Only6%
Private45%
No Coverage34%
Government21%
To offset the growing out-of-pocket expense, many beneficiaries have turned to various forms of private or public supplemental coverage to help defray the cost of prescription drugs
However, more than a third still have no prescription drug coverage
Lack of drug coverage can have adverse affects
Sources of Prescription Drug Coverage
Trends in the Senior Market
Health Care Delivery and Expenditure Trends
Trends in the Senior Market
Seniors are particularly vulnerable to the increased cost of prescription drugs because:
– Drug usage increases with age
– Prior to Part D Medicare did not cover most prescription drugs
Source: Ageworks, a division of the Ethel Percy Andrus Gerontology Center, USC
Medicare Beneficiaries’ Out-of-Pocket Prescription Drug Spending, 2000-2013$2,763*
$1,457*
$999
$644
2000 2003 2006 2013
* Without Medicare drug benefit.SOURCE: Actuarial Research Corporation analysis for The Kaiser Family Foundation, June 2003 and November 2004.
Average annual out-of-pocket drug costs among the Medicare population:
Projected:
The Need for Drug Coverage
Trends in the Senior Market
- 83%
- 28%
Part D is Projected to Reduce Average Out-of-Pocket Spending but the Extent of the Reduction is Likely to Vary
SOURCE: Actuarial Research Corporation analysis for the Kaiser Family Foundation, November 2004.
Average Change:
- 37%
All Other Part D Participants(20.3 million)
Part D Participants Who Receive Low-Income Subsidies
(8.7 million)
Recent Trends in the Senior Market
Traditional Medicare
No Part D coverage Part D Prescription Drug Plan
Medicare Advantage
HMO (Local)
PPO (Local v. Regional)
Enroll in Part D Plan
Apply for Low-Income Subsidy
Medicaid Office
Social Security Office
Meet Income and Asset Test?Dual Eligibles
Below 100% FPL:
No premium or deductible, $1/generic Rx, $3/brand name Rx,
pay nothing after $5,100 in Rx costs
Below 135% FPL: Subsidy for premium, no
deductible, $2/generic Rx, $5/brand name Rx, pay nothing
after $5,100 in Rx costs
Below 150% FPL: Subsidy for premium on sliding scale,
$50 deductible, 15% coinsurance to $5,100 in Rx costs, $2/generic Rx,
$5/brand name Rx after $5,100
If yes, qualify for:
Private FFS
Decisions for Beneficiaries
Part D Benefits & Guidelines
Medicare Prescription Drug Benefit
$ 2 5 0 $ 2 2 5 0 $ 5 1 0 0
$ +
B e n e f ic ia r y L ia b i l i ty
D e d u c t ib le
C o v e r a g e G a p
T o ta l S p e n d in g
? 9 5 %
8 0 % R e in s u r a n c e
1 5 % P la n P a y s 5 % C o in s u r a n c e
M e d ic a r e P a y s R e in s u ra n c e
7 5 % P la n P a y s
2 5 % C o in s u r a n c e
D ire c t S u b s id y /B e n e f ic ia r y P r e m iu m
$ 7 5 0 $ 3 6 0 0 T r O O P
T o ta l B e n e f ic ia r y
O u t - O f - P o c k e t$ 2 5 0
R e d u c t io n in th e d e d u c t ib le C h a n g e s in c o s t-s h a r in g (e .g . , t ie re d
c o p a y m e n ts o r c o in s u ra n c e in a n a c tu a r ia l ly e q u iv a le n t m a n n e r to th e 2 5 % c o s t s h a r in g u n d e r s ta n d a rd c o v e ra g e
M o d if ic a t io n o f in it ia l c o v e ra g e lim it
R e d u c t io n s in c o s t s h a r in g :– R e d u c t io n in d e d u c t ib le– R e d u c t io n in th e c o in s u ra n c e
p e rc e n ta g e o r c o p a y m e n ts– In c re a s e in in it ia l c o v e ra g e lim it
C o v e ra g e o f d ru g s s p e c if ic a lly e x c lu d e d a s c o v e re d P a r t D d ru g s
B a s ic A lte r n a t iv e C o v e r a g e( A c tu a r ia l ly E q u iv a le n t to S ta n d a r d C o v e r a g e )
E n h a n c e d A lte r n a t iv e C o v e r a g e(E x c e e d s S ta n d a r d C o v e r a g e )
S ta n d a r d C o v e r a g e(E s t im a te d A n n u a l P r e m iu m : $ 4 2 0 )
1 0 0 % C o in s u r a n c e( )
2006 Standard Medicare Part D Coverage
Part D Benefits & Guidelines
Part D Plans
To participate in the program, sponsors must offer Medicare Part D benefits to all beneficiaries in one or more of the 34 PDP regions established by CMS
Plan Participation
Highmark’s Medicare Approved Drug Plans
BlueRx Benefits
Basic Plus Complete
Formulary Closed Incentive Incentive
Monthly Premium $26.55 $33.67 $47.46
Deductible $0.00 $0.00 $0.00
Initial Coverage
From deductible amount to $2,250 in total drug costs (member and plan)
Generic
$10 Copay
Brand
$30 Copay
Generic
$10 Copay
Brand
$25/$45 Copay
Generic
$8 Copay
Brand
$20/$40 Copay
Coverage Gap
From $2,251 in total drug costs (member and plan) to $3,600 out-of-pocket (member)
No Coverage No Coverage
$8 Copay for
Unlimited Generics
No Coverage
Catastrophic Coverage
Over $3,600 out-of-pocket (member)
Generic
Greater of $2 Copay or 5% Coinsurance
Brand
Greater of $5 Copay or 5% Coinsurance
Generic
Greater of $2 Copay or 5% Coinsurance
Brand
Greater of $5 Copay or 5% Coinsurance
Generic
Greater of $2 Copay or 5% Coinsurance
Brand
Greater of $5 Copay or 5% Coinsurance
To Request Additional Information, please call 1-866-465-4030
Plan Participation
Standard Part D Enhanced Part D
FreedomBlue FreedomBlue
Formulary Closed Closed
Deductible $0.00 $0.00
Initial Coverage
From deductible amount to $2,250 in total drug costs (member and plan)
Generic
$10 Copay*
Brand
$30 Copay*
Generic
$8 Copay*
Brand
$20 Copay*
Coverage Gap
From $2,251 in total drug costs (member and plan) to $3,600 out-of-pocket (member)
No Coverage $8 Coverage for Generics*
Catastrophic Coverage
Over $3,600 out-of-pocket (member)
Generic
Greater of $2 Copay * or
5% Coinsurance
Brand
Greater of $5 Copay* or
5% Coinsurance
Generic
Greater of $2 Copay* or
5% Coinsurance
Brand
Greater of $5 Copay* or
5% Coinsurance
Generic
Greater of $2 Copay* or
5% Coinsurance
Brand
Greater of $5 Copay* or
5% Coinsurance
Generic
Greater of $2 Copay* or
5% Coinsurance
Brand
Greater of $5 Copay* or
5% Coinsurance
Highmark’s Medicare Advantage Drug Plan Options
* Based on 1-34 Day supply. Copayment for 35-90 day supply (Retail) or 1-90 day supply (Mail Service) is 2.5 times 1-34 day supply.
Medicare Prescription Drug Plan Cost Estimator (BlueRx Basic)
Current Annual Drug Spend $1,440.00$120.00/Month
Est. Annual Medicare Drug Spend $ 798.60$66.55/Month
Est. Annual Savings: $ 641.40$53.45/Month
Description Cost with Medicare
Minimum Annual Premium* $318.60$ 26.55/Month
Cost Share applied toward the $250 Deductible $0.00
Annual Cost Share ** $480.00$40.00/Month
Estimated Savings Report:
Cost Breakdown:
*BlueRx Basic Plan** Assumption: 4 generic prescriptions/month
Part D Benefits & Guidelines
Low-Income Subsidy
• Medicare will provide premium and cost-sharing subsidies to assist low-income beneficiaries
• Dual eligibles will be automatically assigned to a PDP and auto-enrolled if they do not choose another plan
• Benefit: Reduction of premium, deductible & cost-sharing
• Process: Requires completion of SSA form
• Eligibility:
Income Assets*
Single $14,355 $11,500
Married $19,245 $23,000
*Excludes primary residence and automobiles
Part D Benefits & Guidelines
Medicare’s Low Income Subsidy Benefit Design
Title Income Assets Premium Deductible Initial Benefit
Coverage Gap
Catastrophic
Coverage
(1) Full-Benefit
Dual Eligible Non-
Institutionalized
Up to 100% FPL
Medicaid Eligible $0.00 $0.00 $1 generic
$3 brand
$1 generic
$3 brand
$0.00
(2) Full-Benefit
Dual Eligible Non-
Institutionalized
Above 100% FPL
Medicaid Eligible $0.00 $0.00 $2 generic
$5 brand
$2 generic
$5 brand
$0.00
(2) Other Low-Income
Beneficiary
Below 135% FPL
Not Above
$6,000 (single)
$9,000 (couple)
$0.00 $0.00 $2 generic
$5 brand
$2 generic
$5 brand
$0.00
(3) Other Low-Income
Beneficiary
Below 135% FPL
Between
$6,000 & $10,000 (single)
$9,000 & $20,000 (couple)
$0.00 $50 15% co- insurance
15% co- insurance
$2 generic
$5 brand
(3) Other Low-Income
Beneficiary
At or above 135% FPL but below 150% FPL
Not above
$10,000 (single)
$20,000 (couple)
Sliding Scale up to 100%
$50 15% co- insurance
15% co- insurance
$2 generic
$5 brand
(4) Full-Benefit
Dual Eligible
Institutionalized
Irrelevant Medicaid Eligible $0.00 $0.00 $0.00 $0.00 $0.00
Part D Benefits & Guidelines
The Donut Hole’s Impact to Out of Pocket Expenses
Part D Benefits & Guidelines
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$1
$1
84
$3
67
$5
50
$7
33
$9
16
$1
,09
9
$1
,28
2
$1
,46
5
$1
,64
8
$1
,83
1
$2
,01
4
$2
,19
7
$2
,38
0
$2
,56
3
$2
,74
6
$2
,92
9
$3
,11
2
$3
,29
5
$3
,47
8
$3
,66
1
$3
,84
4
$4
,02
7
$4
,21
0
$4
,39
3
$4
,57
6
$4
,75
9
$4
,94
2
$5
,12
5
$5
,30
8
$5
,49
1
$5
,67
4
$5
,85
7
$6
,04
0
$6
,22
3
$6
,40
6
$6
,58
9
$6
,77
2
$6
,95
5
W/o
W/
$0 $250 $2250 $5100 $7000
Annual Initial Donut Hole CatastrophicDeductible Benefit No Coverage of Costs Coverage
W/O
W/
< 100% FPL - $1/3 <135% - $2/5
135%-150%Low Income
Average Senior
Total Prescriptions Received
Ou
t of
Poc
ket
Exp
ense
s
Medicare Part D is an entitlement but enrollment is voluntary
Low-income subsidy provides additional cost savings
Waiting to enroll until after May 15, 2006 may come at a penalty
Nov 15, 2005 May 15, 2006
Sign up & pay = $32.20/Month*
*Amount based on $32.20 national average monthly beneficiary premium (CMS, August 2005).**Assumes national average premium does not increase annually
January 2007 January 2008
Sign up & pay = $34.78/Month**
Sign up & pay = $38.95/Month**
Late Enrollment Penalty
Part D Benefits & Guidelines
National Part D Enrollment not meeting HHS Projections
0.0
20.0
10.0
30.0 *Projected Part D Enrollment = 29.3M
6.2 mil
4.4 mil 4.5 mil
1 mil3.6 mil
Dec 2005 Jan 2006
Enrolled in Stand Alone PDPs
Enrolled in MA-PD
Dual Eligible Auto Assigned from CMS
Actual Part D EnrollmentSource: Projected: HHS, Medicare Drug Benefit Final Rule 1/28/05. Actual: HHS 12/22/05, 1/17/06 , 2/22/06, & 3/23/06
11.6 million
14.3 million
• 39.1 million beneficiaries would enroll in 2006 of which 10 million would have creditable coverage under a qualified plan such as an employer or union sponsored plan.
• 29.3 million would be enrolled in a Part D plan.
• Additional 11.4 million will need to sign up for a stand alone or MAPD plan in order to reach the 29.3 million member target.
Feb 2006
6.2 mil
4.7 mil
4.9 mil
15.8 million
6.2 mil
*Includes MAPD & Stand Alone PDP17.9
million
6.4 mil
5.1 mil
6.4 mil
Mar 2006
Formulary
– Over the counter medications
– Weight gain and loss drugs
– Fertility and cosmetic/hair growth drugs
– Drugs to relieve cold symptoms
– Some vitamins and minerals
– Barbiturates, and benzodiazepines
– Antidepressants
– Antipsychotics
– Anticonvulsants
– Antiretrovirals
– Immunosuppressants
– Antineoplastics.
Statutory ExclusionsCovered Drugs
Prescription Drug Plans Must:
Assure a broad access to drugsRequire two drugs per Categories & Classes
Must comply with USP model guidelines
Provider Challenges
Drug coverage can differ based on how the drug is prescribed dispensed or administered to the patient
Formulary
Provider Challenges
Inhalation DME supply drugs – solution for inhalation via nebulizer only
Oral Anti-cancer agents
Diabetic test strips & lancets
Influenza, pneumococcal, Hepatitis B vaccines
Exceptions & Appeals Process
• Plans must have a drug transition process in place to assure a seamless transition for patients– A 90 day period may be needed for patients taking non formulary drugs
– For rapid transitions, beneficiaries may need to use a plan’s exceptions & appeals process
– Establish an adequate exceptions process to help LTC residents who need non formulary drugs
– Provide a one time temporary or emergency supply to ensure that there is no coverage gap during the exceptions process
Provider Challenges
Medication Therapy Management
Provider Challenges
MTM programs must be designed to assure that covered medications will be used appropriately by targeted beneficiaries. A plan’s MTM services must be developed in cooperation with licensed and practicing pharmacists and physicians.
Optimize therapeutic outcomes
Improve medication use
Reduce risk of adverse events & interactions
Increase patient’s adherence & compliance with regimens
Key Date
May 15, 2006 – The last day that current Medicare eligible beneficiaries can join a drug plan without paying a penalty.
Message Points for Providers
• Patients will ask you for advice
• One plan does not fit all Medicare beneficiaries
• Evaluate Drug Benefit Cost Sharing
• Encourage patients to look into low income subsidies
• Premium Penalty for delay in signing up
• Advise to compare formularies and pharmacy networks
• Know where to tell patients to turn for more information
Where to Turn for More information:
• Highmark– 1-866-465-4030
– www.highmarkblueshield.com
• Medicare– 1-800-MEDICARE
– www.medicare.gov & www.cms.gov
– www.medicare.gov/medicarereform/minitool.asp
• Social Security Administration– 1-800-772-1213
– www.socialsecurity.gov