Transcript Wrapping Around the Part D Benefit: Implications for State Pharmacy Assistance

Wrapping Around the Part D Benefit:
Implications for State Pharmacy Assistance
Programs and Low-Income Enrollees
Presentation to the
Academy Health
Kimberley Fox, Senior Policy Analyst
Rutgers Center for State Health Policy
June 28, 2005
Rutgers Center for State Health Policy
June 28, 2005
Acknowledgement
Presentation based on:
• Study of state pharmacy assistance programs funded by The
Commonwealth Fund
• Longitudinal survey of SPAPs 2000-2004.
• Telephone interviews in Spring/Fall 2004 with 17 states re:
Medicare coordination of benefit issues and discount card
experience.
• Website with more detailed reports:
http://www.cshp.rutgers.edu/
• Analysis of Part D regulations and operational guidance and
SPAP eligibility data in one state.
Collaborating Faculty:
• Stephen Crystal, PhD
• Jasmine Sia, MD/MPH
• Dorothy Gaboda, PhD
Rutgers Center for State Health Policy
June 28, 2005
Presentation Outline
• Overview of SPAPs and how they compare with
Medicare Part D
• Options, Opportunities, and Challenges for SPAPs to
Wrap around Part D
• State Case Example
Rutgers Center for State Health Policy
June 28, 2005
How Many States Have State Pharmacy
Assistance Programs (SPAPs)?
*
No program enacted or operational
Program enacted but not operational
Program is operational
* The District of Columbia’s direct benefit program is enacted but not operational.
Source: National Conference of State Legislatures’ web site: State Pharmaceutical Assistance Programs, 2004 Edition,
http://www.ncsl.org/programs/health/drugaid.htm. November 11, 2004.
Rutgers Center for State Health Policy
June 28, 2005
How SPAP Income Eligibility Compares with
Medicare Part D and Low-Income Subsidies?
600%
Percent of FPL
500%
400%
300%
MMA Low-Income
Subsidy Level
200%
150%
100%
0%
MA RI NY NJ NV WI IL
CT VT DE MI NC SC MO ME PA IN KS FL MN* MD* WY
Source: Trail, T., Fox, K., Cantor, J, Silberberg, M., Crystal, S. State Pharmacy Assistance Programs: A Chartbook.
The Commonwealth Fund, New York, NY, August 2004.
*MD and MN also require an asset test
Rutgers Center for State Health Policy
June 28, 2005
How SPAP Benefits Compare with Part D
and Low-Income Subsidies?
Caveat: Cost-sharing and benefits vary by state*
Generally…
• Non-catastrophic Basic Part D cost-sharing > SPAP.
• Medicare Full Low-Income Subsidies <= SPAPs.
• Medicare Partial Low-Income Subsidies ??
Generally…
• Part D drug formularies < SPAPs
• Except states that limit coverage to drugs for certain
conditions (6) or that have PDLs (9).
Part D private pharmacy networks <= SPAPs.
* For more details on current SPAP cost-sharing see:
http://www.cmwf.org/programs/child/trail_spap_chtbk_758.pdf
Rutgers Center for State Health Policy
June 28, 2005
Presentation Outline
• Overview of SPAPs and how they compare with
Medicare Part D
• Options, Opportunities, and Challenges for SPAPs to
Wrap around Part D
Rutgers Center for State Health Policy
June 28, 2005
SPAP Options/Opportunities under
Medicare Part D
If SPAP enrollees enroll in Part D, could offset current state costs
•
CMS estimates that SPAPs will save approximately $600 million/ year.
Special privileges for “qualifying” SPAPs
•
•
•
•
Expenses paid by SPAP count toward TrOOP
Part D plans required to coordinate benefits/share data
SPAP Transitional grants - $62.5 million/yr
SPAP Transition Commission.
“Qualifying” SPAPs
•
•
•
State-only funded drug benefit/ not discount cards
Statutory language - “In determining eligibility and amount of assistance, provides such
assistance to such individuals in all Part D plans and does not discriminate based on
the Part D plan in which they are enrolled.”
Final rule interpretation – not only equal assistance, but cannot “steer.”
Supplemental coverage options for SPAPs
•
•
•
Pay full premium for basic benefit
Pay lump sum capped funds toward basic premium, supplemental premium, and/or
out-of-pocket costs.
Provide wrap-around secondary claim payment coverage.
Rutgers Center for State Health Policy
June 28, 2005
Key Concerns/Choices for SPAPs
Maintaining/starting state program or terminating/restructuring
benefit?
Qualified vs. non-qualified SPAP?
What/How to Wrap?
• Premiums, deductibles/cost-sharing in and out of donut hole,
formularies, networks
• Lump sum payment or secondary wrap
Getting SPAP Enrollees to Enroll in Part D/LIS
•
•
•
•
Mandate Part D/LIS enrollment
Authorized representative
Co-branding
Intelligent random assignment
COB Challenges Once Enrolled
Rutgers Center for State Health Policy
June 28, 2005
Methodological Challenges in Assessing
Potential Cost-Savings to SPAPs
Potential savings driven by enrollment rates in Part D and LIS and,
once enrolled, proportion of expenses that will be
charged/covered by primary source of payment - No benchmark
experience
• Medicare LIS means-testing totally new
• Medicare Discount Card program had different rules (but when
states left voluntary only 25-50% estimated enrolled in TA, even
lower percentage used it)
Current utilization/expenditures does not reflect future use/prices
• Most SPAPs have used minimal cost containment tools
Much of Part D-specific information still unknown to states
• Rebate levels – How much/how they will be passed on
• Formularies
• Cost-sharing across tiers
Rutgers Center for State Health Policy
June 28, 2005
Rebates as Percentage of Drug Expenditures
Rebates as a Percentage of Total SPAP
Drug Expenditures, 2003
30%
25%
20%
15%
10%
5%
*
*
IN
KS
0%
VT
NY
MD
CT
NJ
DE
PA
MN
MO
IL
MA
WI
NC
All
States
Source: Sia, J, Fox, K., Trail, T., Crystal, S. State Pharmacy Assistance Programs 2003: A Chartbook, The Commonwealth Fund, publication forthcoming.
Notes: Florida, Maine, Michigan, Nevada, Rhode Island, South Carolina, and Wyoming did not provide data on rebate collection. Wisconsin only includes 10
months. Delaware does not include the privately funded Nemours program. Massachusetts includes ingredient cost and dispensing fee.
* Indiana and Kansas reported 0% rebates collected.
All States = Total rebates divided by total drug expenditures (N=15).
Rutgers Center for State Health Policy
June 28, 2005
65
Trends in Annual SPAP Drug Expenditures
Per End-of-Year Enrollee, 1999 to 2003
$1,800
Old Programs
1999 N = 12
2000 N = 10
2001 N = 11
2002 N = 10
2003 N = 11
$1,600
Annual Cost Per Enrollee
$1,400
$1,200
$1,000
Old Programs
New Programs
$800
$600
New Programs
1999 N = 1
2000 N = 2
2001 N = 6
2002 N = 7
2003 N = 10
$400
$200
$0
1999
2000
2001
2002
2003
Notes: Old programs are those established prior to 1999 (N = 12), and new programs are those established since 1999 (N = 10). Only programs
operational for at least one full year were included in the analysis. Averages represent data from all states that reported for that year – see Legends.
Rutgers Center for State Health Policy
June 28, 2005
71
Presentation Outline
• Overview of SPAPs and how they compare with
Medicare Part D
• Options, Opportunities, and Challenges for SPAPs to
Wrap around Part D
• State Case Example
Rutgers Center for State Health Policy
June 28, 2005
Methods for Estimating LIS Eligibility
Analyzed 2003 eligibility data for SPAP enrollees with incomes
below 350% FPL in two distinct programs within one state with
different cost-sharing requirements.
Assigned enrollees to Medicare benefit category – basic benefit,
partial low-income subsidy, full low-income subsidy
• Estimated assets using income/dividends – assumed 4% interest
rate
Rutgers Center for State Health Policy
June 28, 2005
Enrollee Characteristics
Program 1
$14,205
70.2
Program 2
$26,500
75.9
15%
46%
28%
8%
5%
38%
43%
14%
Male
Female
29%
71%
38%
62%
Married
Widowed
Single
20%
51%
29%
56%
32%
12%
Average Income
Average Age
Percent Demographics:
<65/Disabled
65-74
75-84
85+
*Enrolled during any portion of the year.
Percentages may not always add to 100% due to rounding error.
Source: SPAP 2003 Eligibility Data, 2003.
Rutgers Center for State Health Policy
June 28, 2005
# of Enrollees
Majority of SPAP Enrollees Will Not
Qualify for Low Income Subsidies
180000
160000
140000
120000
100000
80000
60000
40000
20000
0
Full Subsidy Eligible
Partial Subsidy
Eligible
Not LIS eligible
Source: SPAP eligibility data. 2003. Includes all persons enrolled for any portion of the calendar year.
Rutgers Center for State Health Policy
June 28, 2005
% of Total Enrollees by LIS Eligibility
Disabled SPAP Enrollees More Likely to
Qualify for Low-Income Subsidies
100%
90%
80%
70%
60%
50%
Not LIS eligible
40%
Full Subsidy Eligible
Partial Subsidy Eligible
30%
20%
10%
0%
Total
Disabled
>65
Source: SPAP eligibility data, 2003. Persons enrolled for any portion of the calendar year.
Rutgers Center for State Health Policy
June 28, 2005
LIS Asset Test Greater Barrier for >65
Income Eligible SPAP Enrollees
70,000
60,000
50,000
Does not meet LIS assets
40,000
Assets below $10k/$20k
Assets below $6k/$9k
30,000
20,000
10,000
0
Over 65
Disabled
<135% FPL
Over 65
Disabled
135%-150%FPL
Source: SPAP eligibility data, 2003. Includes all persons enrolled for any portion of the calendar year.
Rutgers Center for State Health Policy
June 28, 2005
Comparison of SPAP Enrollee*
Characteristics by LIS Eligibility
Other Part D
Only
$13,401
69.0
LIS Income
but not
Asset
Eligible
$11,706
74.5
23%
77%
60%
31%
9%
16%
84%
64%
30%
6%
4%
96%
48%
38%
13%
10%
90%
51%
38%
10%
Male
Female
29%
71%
30%
70%
17%
83%
33%
67%
Married
Widowed
Other Single
13%
47%
40%
21%
51%
28%
13%
62%
26%
34%
45%
20%
Average Income
Average Age
Percent
Demographics+:
Disabled
Over 65
65-74
75-84
85+
Full
Subsidy
Partial
Subsidy
$10,115
67.6
$20,114
72.7
*Enrolled during any portion of the year.
+Percentages may not add to 100% due to rounding.
Source: SPAP 2003 Eligibility Data.
Rutgers Center for State Health Policy
June 28, 2005
Summary/Policy Implications
• SPAPs have unique opportunities to wrap around the
Medicare benefit but face administrative hurdles.
• Many low to moderate income SPAP enrollees may
not be eligible for Part D full low income subsidies
and could benefit from additional assistance.
• State savings (and ability to wrap or expand to other
populations) reliant on getting eligible persons
enrolled in LIS and Part D plans.
Transition period of enrolling existing beneficiaries
into Part D and LIS likely to be difficult
State budget problems and Part D/SPAP
administrative complexities could ‘crowd-out’ many
existing programs.
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Rutgers Center for State Health Policy
June 28, 2005