Transcript 2004_SCI_MedicarePartD_parksthomas

Cost Sharing for Low-Income
Beneficiaries and Supplementing Part D
Examples from Pharmacy Plus
Medicaid Demonstration Programs
Summit for State Health Policy Makers:
Medicare Part D Implementation
October 7, 2004
Cindy Parks Thomas
Brandeis University
Schneider Institute for Health Policy
Dan Gilden, JEN Associates
1
Background
• Brandeis/JEN Evaluation of the Impact of Pharmacy Plus
Waivers in Illinois and Wisconsin on Medicare and Medicaid
(CMS 500-00-0031/TO2)
• Analysis of cost sharing and plan design strategies in two
waiver states (HCFO 050507)
• Comparing two states with different member cost sharing, but
same enrollment criteria
• Cost sharing analysis is adapted to inform Medicare Part D
wrap-around options for states for this population (up to 200%
FPL, not covered by Medicaid)
• This analysis of beneficiary cost sharing does not reflect
overall impact of Medicare Part D on states
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Pharmacy Plus Waiver Demonstrations:
State Waiver Designs and Part D
Income by
FPL
Illinois
No enrollment fee
No asset test
<100%
No deductible
No copay up to $1750
rx costs
>$1750: 20% copay
100-135%
Copay: $1 generic/
$4 brand
>$1750: copay +20%
Wisconsin
Enrollment fee $30,
No asset test
No deductible
Copay: $5generic/
$15 brand
Asset test <$6000
No premium
No deductible/ no donut
Copay $1/$3 to $5100 rx cost
Asset test <$10,000
No premium
No deductible/ no donut
Copay $2/$5 to $5100 rx cost
135-150%
Asset test
Sliding scale premium
Deductible $50/no donut
15% coins to $5100 rx cost
(160% fpl)
150-200%
Medicare Part D 2006
Income-based Premium +
Asset test (Cost share Indexed)
Deductible $500
Copay: $5 generic/
$15 brand
Standard Part D benefit:
$420 premium
Deductible $250
25% coins to $2250
Full pay (donut) $2250 to $5100
5% coins after $5100
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Prescription Drug Cost Sharing
Ranges by Program Design and by
Income Level
Wisconsin SeniorCare Waiver
Illinois SeniorCare Waiver
$2,000
$187
$260
$276
$274
$1,500
$1,000
$1,526
$1,547
$1,614
$1,607
$500
$0
total drug expenditures
total drug expenditures
$2,000
$1,500
$416
$600
$374
$384
$1,056
$1,116
$1,219
$1,114
<100%
100-135%
135-150%
150-200%
$1,000
$500
$0
<100%
100-135%
135-150%
Income (fpl)
150-200%
Member out of pocket
Program + tpl payment
Income (fpl)
Note: Analysis of members enrolled full 12 months, program year 1, 2002-2003.
Before rebates.
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Cost Sharing/Wrap Around Coverage Will Affect
Patterns of Rx Use for Low Income Seniors
Average expenditures and use for matched sample across states*
Illinois
Wisconsin
$1/$4 copayments
$5/$15 copayments/deductible
FPL
Total
Rxs/
mm1
Total Allowed
Rx Expenditures/
mm
Percent
Generic
rx
Total
Rxs/mm
Total Allowed Rx
Expenditures/
mm
Percent
Generic
rx
<100%
3.8
$151
49.4%
3.3
$119
52.2%
100 – 135%
3.9
$153
48.2%
3.7
$136
53.6%
135 – 150%
3.9
$159
48.6%
3.8
$143
52.1%
150-200%
3.9
$162
46.7%
3.9
$152
50.2%
*Illinois enrollee sample and Wisconsin controls, matched for age, gender, race, income
urban/rural, medical diagnoses and prior year Medicare Part A and B utilization
1mm=member
month
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Cost Sharing Example:
Matched sample, Women age 70-84, urban, white, with CHF diagnosis*
Annual allowed spending (2002-2003)
Illinois
Wisconsin
$1/$4 copayments
$5/$15 copayments, deductible
FPL
Total
Rxs/yr
Total allowed
Rx
Expenditures/yr
Out of
pocket
Total
Rxs/yr
Total Allowed
Rx
Expenditures/yr
Out of
pocket
<100%
64
$2484
$324
58
$1872
$540
100 –
135%
65
$2556
$420
61
$2100
$540
135 –
150%
68
$2748
$444
65
$2196
$588
150 –
200%
68
$2688
$432
65
$2316
$780
*Illinois enrollee sample and Wisconsin controls, matched for age, gender, race, income
urban/rural, medical diagnoses and prior year Medicare Part A and B utilization
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Proportion of enrollees
Total Enrollee Prescription Drug Spending
Distributions Can Change Considerably by 2006
100%
2.7%
80%
30.3%
5.7%
36.6%
8.6%
39.2%
60%
40%
56.2%
47.7%
42.6%
$5100+ rx spending
$2250-$5100 rx spending
20%
$250-$2250 rx spending
10.9%
10.0%
9.6%
2003
2006, at 6%
annual growth
2006, at 10%
annual growth
0%
<$250 rx spending
Total rx spending under various
assumptions
Note: Hypothetical case, with 2003 analysis based on allowed charges for
state program members enrolled full 12 months, program year 1 before rebates.
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Medicare Part D: Potential Cost Sharing Faced by
“Average Use” Beneficiary Age 65+
FPL
Medicare Part D cost sharing under hypothetical
program in 2006 – includes premiums
If qualifying for subsidies
<100%
$87
100 – 135%
$159
135 – 150%
Sliding premium + $439
150 – 200%
Standard benefit**
$1275 for “average” rx user (<$2250)
>$2734 average for “high users”
(48% could spend >$2250)
2003 utilization and generic use rates, 10% annual growth from 2003; Excludes out of plan drugs.
Assets not accounted for: a large proportion of individuals with incomes <150% FPL
do not qualify for Part D subsidies
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Summary
• Cost sharing and wrap around approach will have an impact on
patterns of prescription use for low income seniors
• Current Rx spending distributions can change considerably by
2006
• With Part D standard benefit, beneficiaries below 150%, who qualify
for subsidies will gain, all others now covered will pay more in
transition to Part D
• High cost to supplement Part D; most expenditures are in cost
sharing and donut, not catastrophic portion or the predictable
deductible
• Wrap around is only partial cost. Additional costs to states:
greater wrap around expenses at 200+ % FPL income levels higher cost sharing, greater rx use, outreach; additional assistance
for non-covered drugs or out of plan use
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