Cost Sharing Under Part D: Impact on Beneficiaries with the Standard Benefit - PowerPoint PPT Presentation

Loading...

PPT – Cost Sharing Under Part D: Impact on Beneficiaries with the Standard Benefit PowerPoint presentation | free to download - id: 6a620e-Zjg5N



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Cost Sharing Under Part D: Impact on Beneficiaries with the Standard Benefit

Description:

www.statecoverage.org – PowerPoint PPT presentation

Number of Views:23
Avg rating:3.0/5.0
Slides: 30
Provided by: bstuart
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Cost Sharing Under Part D: Impact on Beneficiaries with the Standard Benefit


1
Cost Sharing Under Part D Impact on
Beneficiaries with the Standard Benefit
  • Bruce Stuart, PhD
  • Director, Peter Lamy Center on Drug Therapy and
    Aging
  • University of Maryland Baltimore

Invitational Summit for State Policy
Makers Medicare Part D Implementation
Issues Philadelphia, October 8, 2004
2
Why States Should be Concerned about
Beneficiaries with the Standard Benefit
  • Part D low income subsidies
  • Full-benefit dual eligibles or lt135 FPL and
    meets MMA asset tests (no premium, small copays)
  • 136 -150 FPL and meets asset tests (phased out
    subsidy)
  • Who wont qualify for the subsidies
  • gt 150 of the FPL (varies by household size)
  • lt 150 of FPL but fails to sign up or fails asset
    tests

3
Assessing the Impact of Gaps in the Part D
Standard Benefit
  • Given the cost sharing features of the standard
    benefit
  • What is the relationship between drug spending
    and the generosity of the Part D benefit?
  • How persistent is drug spending over time?
  • How will beneficiaries respond to benefit gaps in
    the face of persistent need for medication
    therapy?

4
Coverage Gaps under the Part D Standard Benefit
in 2006
Annual Drug Spending Months in Coverage Gap (assuming steady spending) of Total Annual Drug Spending Paid Out of Pocket
1,000 3.0 44
2,000 1.5 34
3,000 4.0 50
4,000 6.0 63
5,000 7.2 70
6,000 6.2 61
7,000 5.3 53
5
Riding the Part D Rollercoaster
  • Research shows that drug spending is highly
    persistent
  • Beneficiaries hit with high cost sharing in one
    year are likely to be hit year after year
  • Our study projected Rx spending to 2006-2008 for
    3 groups of beneficiaries
  • Typical Part D enrollee (gt150 FPL, without
    stable Rx coverage from an employer or a public
    program) with average drug spending
  • Typical Part D enrollee with Rx spending above
    2,250
  • Typical Part D enrollee with Rx spending above
    5,100

6
Estimated Drug Spending (2006-2008) for Typical
Enrollee with Average Spending in 2006
Year Mean Annual Total Prescription Drug Spending Out-of-Pocket (OOP) Drug Spending
2006 2,608 42
2007 2,880 46
2008 3,230 42
7
Estimated Quarterly OOP Drug Spending for
Enrollee with Average Spending
8
Estimated Quarterly OOP Drug Spending for
Enrollee with Average Spending
250 deductible
9
Estimated Quarterly OOP Drug Spending for
Enrollee with Average Spending
25 coinsurance
10
Estimated Quarterly OOP Drug Spending for
Enrollee with Average Spending
hits donut hole
11
Estimated Quarterly OOP Drug Spending for
Enrollee with Average Spending
275 deductible
12
Estimated Quarterly OOP Drug Spending for
Enrollee with Average Spending
25 coinsurance
13
Estimated Quarterly OOP Drug Spending for
Enrollee with Average Spending
hits donut hole
14
Estimated Quarterly OOP Drug Spending for
Enrollee with Average Spending
300 deductible
15
Estimated Quarterly OOP Drug Spending for
Enrollee with Average Spending
25 coinsurance
16
Estimated Quarterly OOP Drug Spending for
Enrollee with Average Spending
hits donut hole
17
Estimated Drug Spending (2006-2008) for Typical
High Spender in 2006 (38 of enrollees with
gt2,250 in 2006)
Year Mean Annual Total Prescription Drug Spending Out-of-Pocket (OOP) Drug Spending
2006 5,534 65
2007 5,289 69
2008 5,562 67
18
Estimated Quarterly OOP Drug Spending for
Typical High Spender
note change in scale
19
Estimated Quarterly OOP Drug Spending for
Typical High Spender
enters donut hole
20
Estimated Quarterly OOP Drug Spending for
Typical High Spender
passes catastrophic threshold
21
Estimated Quarterly OOP Drug Spending for
Typical High Spender
higher OOP spending due to rise in
catastrophic threshold
22
Estimated Drug Spending (2006-2008) for Typical
Catastrophic Spender in 2006 (14 of enrollees
with gt5,100 in 2006)
Year Mean Annual Total Prescription Drug Spending Out-of-Pocket (OOP) Drug Spending
2006 9,106 42
2007 7,663 53
2008 7,328 60
23
Estimated Quarterly OOP Drug Spending for Typical
Catastrophic Spender
note change in scale
24
Estimated Quarterly OOP Drug Spending for Typical
Catastrophic Spender
enters donut hole
25
Estimated Quarterly OOP Drug Spending for Typical
Catastrophic Spender
passes catastrophic threshold
26
Estimated Quarterly OOP Drug Spending for Typical
Catastrophic Spender
higher OOP spending due to rise in catastrophic
threshold
27
How Will Beneficiaries React to Multiple Benefit
Gaps of Varying Duration?
  • Research shows that beneficiaries will cut back
    on drug use
  • Cut-backs are proportional to level of spending
    (higher spending greater cutbacks)
  • Beneficiaries with certain chronic conditions
    will cut back more

28
Estimated Impact of Drug Benefit Gaps on Drug Use
by Beneficiaries with Selected Diseases (Impact
relative to no gap and 25 coinsurance)
Gap in months Average beneficiary Diabetes COPD Mental Illness
1 -2 -3 -4 -4
2 -4 -6 -8 -9
3 -6 -8 -12 -13
4 -8 -11 -16 -17
5 -10 -14 -21 -21
6 -12 -17 -25 -26
7 -14 -20 -29 -30
29
Implications for the States
  • States need to consider the needs of
    vulnerable Medicare beneficiaries ineligible for
    subsidized prescription coverage under Part D.
    Risk factors are
  • Annual drug spending deep in the donut hole (e.g.
    gt4,000)
  • Chronic illness (e.g., diabetes, COPD, mental
    disorders)
  • Poor with modest assets
  • Near poor (e.g., 150-250 FPL)
About PowerShow.com