Transcript Medicare and Prescription Drugs: Issues for Employers and Consumers Robert D. Reischauer

Medicare and Prescription Drugs:
Issues for Employers and
Consumers
Robert D. Reischauer
The Urban Institute
National Health Policy Conference
January 28, 2004
Decisions for Employers
that Currently Provide
Retiree Drug Coverage
#1. Which Option?
• Take 28% subsidy (expenditures
$250 - $5,000)
• Establish closed DIMA-style plan
• Drop coverage
#2: For First Option:
Whether to Redesign Current
Drug Benefit?
• To maximize government subsidy
• To take advantage of generous
government catastrophic coverage
• To share windfall with retirees
#3: What Carrots, if any, to
Provide with Options 2 and 3?
• Pay Rx premiums
• Pay premiums for non Rx retiree
coverage
• Reduce non Rx cost-sharing
• Increase cash pension benefits
#4: Whether to Change
Worker Coverage to Take
Advantage of HSAs
What Impacts Will These
Decisions Have On:
• The distribution of costs between
employers and retirees?
• The distribution of costs between
employers and workers?
• Retirees/workers with large vs. small
health expenditures?
Decisions for
Beneficiaries
#1: Whether to Participate
in the Discount Card
Program in 2004-5?
#2: Which Discount Card
Program?
• Inclusion of beneficiary’s own Rx in
formulary
• Depth of discounts on beneficiary’s
own Rx
• Breadth of formulary and depth of
average discount
• Breadth of pharmacy network
• Membership fee
#3: Whether to Apply for the
$600 Low-Income Subsidy?
#4: Whether to Participate in
the Full Rx Benefit Program
after 2005?
• Expected Rx expenditures now and in
the future
• Types of plans that are available (stand
alone regional PDPs, fallback plan,
local MA plans, regional MA PPOs,
national PDPs)
• Formularies/premiums/cost-sharing
• Penalties for late enrollment
#5: Whether to Apply for
Low-Income Subsidies?
• Asset test
Who Will Provide Information
to Help Beneficiaries Sort
Through Their Choices?
• CMS?
• Advocates for Seniors, AARP,
Families USA, etc.?
• Mainstream media?
• Health providers?
• Others?