Transcript BCNEPA/FPH 2006 Seminar

BCNEPA/FPH 2006 Seminar
Medicare Before and After Part D
April 26, 2006
Randy Grabiak
Highmark Senior Products
Medicare Part D Product Director
Agenda
• Trends in the Senior Market
• Part D Benefits & Guidelines
• Plan Participation
• Provider Challenges
• Questions
Trends in the Senior Market
Seniors’ Sources of Information
AMONG 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…
Survey March 31 – April 3, 2005
Your doctor
49%
Your pharmacist
33%
A Social Security office, website or phone number
27%
Friends or family members
27%
23%
21%
18%
A Medicare mailing, website or phone number
A health insurance company
A local seniors’ group or community organization
An employer or union
Survey October 13 – 31, 2005
8%
Medicare
33%
Your doctor
32%
Your pharmacist
25%
24%
20%
Social Security
Friends or family members
A local seniors’ group or community organization
16%
Medicaid
An employer or union
14%
9%
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)
Trends in the Senior Market
Health Insurance Trends Prior to Part D



To offset the growing outof-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
Part A Only
6%
No Coverage
34%
Medicare
Advantage
7%
EmployerSponsored
28%
Self-Pay
28%
Other
6%
Medicaid
15%
Government
21%
Medigap
10%
Private
45%
Trends in the Senior Market
Health Care Delivery and Expenditure Trends

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
Trends in the Senior Market
The Need for Drug Coverage
Medicare Beneficiaries’ Out-of-Pocket Prescription Drug Spending, 2000-2013
$2,763*
Average annual out-of-pocket drug
costs among the Medicare population:
Projected:
$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.
Recent Trends in the Senior Market
Part D is Projected to Reduce Average Out-of-Pocket
Spending but the Extent of the Reduction is Likely to Vary
Part D Participants Who Receive
Low-Income Subsidies
(8.7 million)
Average Change:
- 37%
All Other Part D
Participants
(20.3 million)
- 28%
- 83%
SOURCE: Actuarial Research Corporation analysis for the Kaiser Family Foundation, November 2004.
Part D Benefits & Guidelines
Decisions for Beneficiaries
Enroll in Part D Plan
Medicare Advantage
Traditional Medicare
No Part D coverage
HMO
(Local)
Part D Prescription
Drug Plan
PPO (Local v.
Regional)
Private FFS
Apply for Low-Income Subsidy
Dual
Eligibles
Social Security
Office
Medicaid
Office
Meet Income and Asset Test?
If yes, qualify for:
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
Part D Benefits & Guidelines
Medicare Prescription Drug Benefit
2006 Standard Medicare Part D Coverage
C
c
hi
op
tr e
as ag
at ver
o
C
Total Spending
$250
$2250
75% Plan Pays
$5100
100% Coinsurance
( Coverage Gap)
Standard Coverage
(Estimated Annual Premium: $420)
80% Reinsurance
Deductible
$+
? 95%
Total Beneficiary
Out-Of-Pocket
$250
25% Coinsurance
$750
Beneficiary Liability
Basic Alternative Coverage
$3600 TrOOP
15% Plan Pays
Direct Subsidy/
Beneficiary Premium
5% Coinsurance
Medicare Pays Reinsurance
Enhanced Alternative Coverage
Plan Participation
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
$0.00
$0.00
$0.00
Deductible
Initial Coverage
From deductible
amount to $2,250
in total drug costs
(member and plan)
Generic
Brand
Generic
Brand
Generic
Brand
$10 Copay
$30 Copay
$10 Copay
$25/$45 Copay
$8 Copay
$20/$40 Copay
$8 Copay
for
Unlimited
Generics
No Coverage
Coverage Gap
From $2,251 in
total drug costs
(member and plan)
to $3,600 out-ofpocket (member)
Catastrophic
Coverage
Over $3,600 outof-pocket
(member)
No Coverage
No Coverage
Generic
Brand
Generic
Brand
Generic
Brand
Greater of $2
Copay or 5%
Coinsurance
Greater of $5
Copay or 5%
Coinsurance
Greater of $2
Copay or 5%
Coinsurance
Greater of $5
Copay or 5%
Coinsurance
Greater of $2
Copay or 5%
Coinsurance
Greater of $5
Copay or 5%
Coinsurance
To Request Additional Information, please call 1-866-465-4030
Highmark’s Medicare Advantage Drug Plan Options
Standard Part D
Enhanced Part D
FreedomBlue
FreedomBlue
Formulary
Closed
Closed
Deductible
$0.00
$0.00
Initial
Coverage
Generic
Brand
Generic
Brand
$10 Copay*
$30 Copay*
$8 Copay*
$20 Copay*
From deductible
amount to $2,250
in total drug costs
(member and plan)
Coverage Gap
From $2,251 in
total drug costs
(member and plan)
to $3,600 out-ofpocket (member)
Catastrophic
Coverage
Over $3,600 out-ofpocket (member)
No Coverage
$8 Coverage for Generics*
Generic
Brand
Generic
Brand
Generic
Brand
Generic
Brand
Greater of $2
Copay * or
5%
Coinsurance
Greater of $5
Copay* or
5%
Coinsurance
Greater of $2
Copay* or
5%
Coinsurance
Greater of $5
Copay* or
5%
Coinsurance
Greater of $2
Copay* or
5%
Coinsurance
Greater of $5
Copay* or
5%
Coinsurance
Greater of $2
Copay* or
5%
Coinsurance
Greater of $5
Copay* or
5%
Coinsurance
* 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.
Part D Benefits & Guidelines
Medicare Prescription Drug Plan Cost Estimator (BlueRx Basic)
Estimated Savings Report:
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
Cost Breakdown:
Description
Minimum Annual Premium*
Cost with Medicare
$318.60
$ 26.55/Month
Cost Share applied toward the $250 Deductible
Annual Cost Share **
$0.00
$480.00
$40.00/Month
*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
(1) Full-Benefit
Dual Eligible NonInstitutionalized
Up to 100%
FPL
Medicaid Eligible
(2) Full-Benefit
Dual Eligible NonInstitutionalized
Above
100% FPL
Medicaid Eligible
(2) Other LowIncome
Beneficiary
Below
135% FPL
Not Above
Premium
$0.00
$0.00
$0.00
Deductible
$0.00
$0.00
$0.00
$6,000 (single)
Initial
Benefit
Coverage
Gap
Catastrophic
$1 generic
$1 generic
$0.00
$3 brand
$3 brand
$2 generic
$2 generic
$5 brand
$5 brand
$2 generic
$2 generic
$5 brand
$5 brand
15% coinsurance
15% coinsurance
$2 generic
15% coinsurance
15% coinsurance
$2 generic
$0.00
$0.00
$0.00
Coverage
$0.00
$0.00
$9,000 (couple)
(3) Other LowIncome
Below
135% FPL
Beneficiary
(3) Other LowIncome
Beneficiary
(4) Full-Benefit
Dual Eligible
Institutionalized
Between
$0.00
$50
$6,000 & $10,000 (single)
$5 brand
$9,000 & $20,000 (couple)
At or above
135% FPL
but below
150% FPL
Not above
$20,000 (couple)
Irrelevant
Medicaid Eligible
$10,000 (single)
Sliding
Scale up
to 100%
$50
$0.00
$0.00
$5 brand
Part D Benefits & Guidelines
The Donut Hole’s Impact to Out of Pocket Expenses
Annual
Deductible
Initial
Benefit
Donut Hole
Catastrophic
Coverage
No Coverage of Costs
$8,000
W/O
$7,000
Out of Pocket Expenses
$6,000
$5,000
Average Senior
W/
$4,000
W/o
W/
$3,000
$2,000
135%-150%
Low Income
$1,000
Total Prescriptions Received
$6,955
$6,772
$6,589
$6,406
$6,223
$6,040
$5,857
$5100
<135% - $2/5
$5,674
$5,491
$5,308
$5,125
$4,942
$4,759
$4,576
$4,393
$4,210
$4,027
$3,844
$3,661
$3,295
$2250
$3,112
$2,929
$2,746
$2,563
$2,380
$2,197
$2,014
$1,831
$1,648
$1,465
$1,282
$916
$1,099
$733
$550
$367
$1
$184
$0 $250
$3,478
< 100% FPL - $1/3
$0
$7000
Part D Benefits & Guidelines
Late Enrollment Penalty

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
January 2008
January 2007
Sign up & pay = $34.78/Month**
Sign up & pay = $32.20/Month*
Sign up & pay = $38.95/Month**
*Amount based on $32.20 national average monthly beneficiary premium (CMS, August 2005)
**Assumes national average premium does not increase annually
.
National Part D Enrollment not meeting HHS Projections
• 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.
*Projected Part D
Enrollment = 29.3M
30.0
20.0
11.6
million
10.0
1 mil
4.4 mil
6.2 mil
14.3
million
3.6 mil
4.5 mil
6.2 mil
15.8
million
4.9 mil
4.7 mil
17.9
million
6.4 mil
5.1 mil
Jan 2006
Enrolled in Stand Alone
PDPs
Enrolled in MA-PD
6.2 mil
6.4 mil
0.0
Dec 2005
*Includes MAPD &
Stand Alone PDP
Feb 2006
Mar 2006
Actual Part D Enrollment
Source: Projected: HHS, Medicare Drug Benefit Final Rule 1/28/05. Actual:
HHS 12/22/05, 1/17/06 , 2/22/06, & 3/23/06
Dual Eligible Auto
Assigned from CMS
Provider Challenges
Formulary
Covered Drugs
Statutory Exclusions
– Antidepressants
– Over the counter medications
– Antipsychotics
– Weight gain and loss drugs
– Anticonvulsants
– Fertility and cosmetic/hair growth
drugs
– Antiretrovirals
– Immunosuppressants
– Antineoplastics.
– Drugs to relieve cold symptoms
– Some vitamins and minerals
– Barbiturates, and
benzodiazepines
Prescription Drug Plans Must:
Assure a broad access to drugs
Require two drugs per Categories & Classes
Must comply with USP model guidelines
Provider Challenges
Formulary
Drug coverage can differ based on how the drug is prescribed
dispensed or administered to the patient

Inhalation DME supply drugs – solution for
inhalation via nebulizer only

Oral Anti-cancer agents

Diabetic test strips & lancets

Influenza, pneumococcal, Hepatitis B vaccines
Provider Challenges
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
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
15, 2006 – The last day
that current Medicare eligible
beneficiaries can join a drug
plan without paying a penalty.
 May
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