Transcript Governor`s Conference

Strengthening
Medicare Part D
John Rother
Washington, DC
November 5, 2007
Director
Policy & Strategy
AARP
AARP Goals for 2003
Conference Committee
1. Do no harm –protect underlying Medicare
fee-for-service program
2. Get Rx coverage for all 65+ now without it
3. Provide generous support to low-income
beneficiaries
4. Prevent erosion of employer-based retiree
health plans
5. Contain pharmaceutical prices effectively
100%
93%
80%
77%
60%
40%
2004
2006
Source: Unpublished preliminary research: H. Levy & D.
Weir, Univ. of Michigan,
“Take-Up of Medicare Part D and the SSA Subsidy: Early
Results from the Health and Retirement Study,”
Presented Aug 2007 at the Retirement Research Consortium
Annual Joint Conference, Washington, DC
2. Rx coverage for 65+
Millions more 65+ are covered
Current Part D Enrollment 24 Million
Stand-Alone Rx Plans
11,000,000
Medicare Advantage w/Rx Drug 6,700,000
(Includes .5 million Duals)
Dual Eligibles in PDP’s (Auto-enrolled)
Estimated Creditable Coverage
6,300,000
4,900,000
=VA, Indian Health Service, employer plans
w/o retiree subsidies, active workers, and
state pharmaceutical assistance programs
Employer/Union Ret. Coverage
FEHB Feds retiree coverage --includes dependents 10,300,000
TriCare Military retirees
No Creditable Coverage
4,000,000
(GAO = 4.7 million)
Source: HHS, January 30, 2007
3. Generous Support for Limited-Income Enrollees
What’s Part D coverage worth?
CMS 2007 Estimates
Average worth per person
►$3,353 in 2007 for a low-income
enrollee August 2007 Press Release
►$1,200 for a mid-income enrollee
June 2007 Press Release
.
Number of eligibles not
enrolled in LIS
 CMS estimated 14.4 million would
enroll, yet only 9 million so far
 Also, there are those who would
qualify but for the asset limits --estimated by KFF at 2.3 million
Why people fail to enroll:
 Lack of knowledge -Nearly half of LIS
eligibles not enrolled reported they were “not aware”
of program (2006 National Survey of Seniors and Rx Drugs- KFF)
 Welfare stigma from required place
of enrollment and asset test
 Don’t want or know how to answer
asset questions at enrollment
i.e. burial plots, life insurance, in kind support
Targeting: Key strategies for
face-to-face enrollment
 Need IRS to share income data
with SSA
 Need funding for outreach and
enrollment at community level
5. Reduce the Rise in Rx Drug Prices
Rx
Drug cost-containment measures
 Rely heavily on formularies
 Works for most enrollees, but LIS
enrollees exempt
 Duals will be forced into most restricted
plans next year
 Need comparative-effectiveness studies
to assure most effective drugs are
available
Friction Points
 Marketing abuses
 Problems with appeals, since many plans
give people no info at the pharmacy when
refusing to cover a drug
 LIS reassignments: real problem being
inclusion of MA plans in benchmark
 Inaccurate and misleading data on
Medicare plan finder
 Too many choices! Standardization and
simplification needed
Immediate Steps to
Strengthen Part D
Strengthen limited-income protections
 Substantially raise or eliminate asset test
 Simplify LIS application
 Permit enrollment in MSP at SSA offices
 Bring Medicare Savings Program to LIS level
 Change formula to avoid "ping-ponging“
of LIS enrollees each year
Immediate Steps to
Strengthen Part D
Quality and Cost Improvements
 More aggressive oversight of plan performance
 Substantially fund comparative-effectiveness
research
 Require physicians to E-Prescribe
Strengthening
Medicare Part D
Washington, DC
November 5, 2007