State Perspectives on Medicare Part D: Lessons from Pharmacy Plus Programs
Cindy Parks Thomas Donald Shepard Christine E. Bishop Daniel M. Gilden
Brandeis University Schneider Institute for Health Policy and Jen Associates, Inc. Academy Health Annual Research Meeting June 27, 2006
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Lessons from Wisconsin SeniorCare Response to Medicare Part D
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Background
• Pharmacy Plus Medicaid Waivers: Expanded pharmacy coverage for low-income seniors
– Most eliminated after Part D
• Study based on Brandeis/CMS evaluation of Pharmacy Plus Programs in Illinois and Wisconsin and RWJ HCFO Grant # 50507
– Program design and outcomes
• Case study of Wisconsin SeniorCare: Program maintained after Medicare Part D implemented
– Interviews with state officials in 2005/2006
– Program data early 2006
– AARP Sellers Feinberg financial analysis
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Wisconsin SeniorCare and Part D Benefits
Income by FPL <100% Wisconsin SC Enrollment fee $30, No asset test No deductible Copay: $5generic/ $15 brand Medicare Part D 2006 std. benefit Income-based Premium + Asset test (Cost share Indexed) No premium No deductible/ no gap Copay $1/$3 to $5100 rx cost No premium No deductible/ no gap Copay $2/$5 to $5100 rx cost Sliding scale premium Deductible $50/no gap 15% coins to $5100 rx cost (160% fpl) 150-200% Deductible $500 Copay: $5 generic/ $15 brand Standard Part D benefit: $420 premium Deductible $250 25% coins to $2250 Full pay (gap) $2250 to $5100 5% coins after $5100 4
100-135%
135-150%
State only program: 200-240% FPL: $850 deductible, same copays.
Wisconsin SeniorCare: A Better Benefit than Part D for Most
Out-of-pocket Costs for Wisconsin SeniorCare Versus Standard Part D
$5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0
Out-of-pocket spending
SC <160%FPL SC 160-200%FPL SC 200-240%FPL Part D
Source: Wisconsin Department of Health and Family Services, 2006
$0
$250
$500
$750
Total drug spending
5
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
Wisconsin Challenge
• CMS recommended to states:
– Eliminate Pharmacy Plus programs – Convert to SPAP so out of pocket costs would contribute to catastrophic
• Wi. SeniorCare member analysis 2004
– <135%FPL and full subsidy would be better off in Part D – <150% FPL and partial subsidy better off in SeniorCare – All others better off in SeniorCare (estimated 94%)
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Wisconsin Choices for Pharmacy Assistance
• Maintain SeniorCare waiver through June 2007 • Convert SeniorCare to state program for Medicare Part D wraparound • Convert SeniorCare to state pharmacy assistance program and allow choice • Eliminate all state pharmacy assistance for low-income seniors
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Important Factors
• Very popular program since 2002
– Legislative – Public support – Wisconsin aging network well established
• • • •
Medicaid matching costs Other revenue sources State costs Differences in member out-of-pocket spending
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Qualifying for the Low-income Subsidy
• Estimates of how many income-eligible seniors would qualify for LIS:
– – – – Congressional Budget Office 2003: 88% Congressional Budget Office July 2004: 45% CMS 2005: 57% Wisconsin SeniorCare estimate 2005: 20% based on:
• Percent in Medicaid meeting asset test; • Wisconsin DHFS survey
• Actual percent qualifying: 18-19%
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Estimated Cost to Wisconsin for Wraparound Coverage for SeniorCare Members
$1.7 $13.1
Donut Hole: $72 million
Premiums
$29.7
Deductibles Copayments/coinsu rance Catastrophic
$20.7
Total = $137.3 million dollars cost to State to wrap around program
10 Source: Wisconsin Department of Health and Family Services and Sellers Feinberg, 2006
Estimated Savings to Federal Government for Extending SeniorCare With Medicare Part D
Fiscal Year 2003-04 ($ in millions) Drug and Out-of- Pocket Costs Pharmacy Billed Amount (Retail Price) Less SeniorCare Discount Price Savings (AWP & MAC) Less Other Participant Insurance Payments Less Senior Out-of-Pocket Costs $204.4 36.8 1.3 $55.2 $111.1 $41.5 $137.3 $67.1 $67.1 $204.4 SeniorCare Medicare Part D
Subtotal - Costs Program Funding Federal Funds
State Funds
Manufacturer Rebates
38.2
31.2 $110.9 $67.1 11
Subtotal - Funding
Source: Wisconsin Department of Health and Family Services and Sellers Feinberg, 2006
Enrollment Process into Wisconsin SeniorCare versus Part D
• SeniorCare now creditable coverage • RFP for wraparound coverage: no plans responded • Assist in outreach • 2800 members were autoenrolled to Part D and had to be disenrolled • 85% re-enrollment rates in SeniorCare • Still about 1000 members who qualify for LIS • Plan also wraps around Part D
– Uncovered classes and – SeniorCare covered drugs
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Wisconsin State Part D Market
• 844,272 Medicare beneficiaries
– 294,740 <200% FPL
• 107,200 dual eligibles • 187,542 income eligible for SC waiver
– 32% of processed LIS applications approved
• Market
– Least expensive PDP: $11/month (average $36) – 80% have no coverage in gap – 64% have no deductible (35% of low cost plans)
13 Source: Kaiser Family Foundation, 2006
Wisconsin SeniorCare Enrollment Estimates
96,872 SeniorCare members 2006 all income levels
30,474 members <135% fpl
12,795 members 135-150% fpl
53,603 members >150% fpl
5,704 (20%) meet asset test full LIS
2,068 (20%) meet asset test Partial LIS
None qualify for LIS
Most Enrolled in Part D
1,000 (est.) enrolled in Part D
Part D creditable coverage
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Enrollment in SeniorCare Increased After Jan 2006
60000 50000 40000 30000 20000 10000 0 <160% FPL 160 to 200% FPL 200 to 240% FPL >240% FPL
Ju ly Au g Se pt O ct No v De c Ja n Fe b M ar
Source: Wisconsin Department of Health and Family Services, 2006
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Number of SeniorCare Prescriptions per Member Before and After January 2006
1.2 1 0.8 <160% FPL 160 to 200% FPL 200 to 240% FPL >240% FPL
0.6
0.4 0.2 0
Average number of prescriptions per member per week
Source: Wisconsin Department of Health and Family Services, 2006 16
Average Cost per Prescription for SeniorCare Before and After January 2006
$60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $0.00 <160% FPL 160 to 200% FPL 200 to 240% FPL >240% FPL
Ju ly Au g Se pt O ct No v De c Ja n Fe b M ar
Source: Wisconsin Department of Health and Family Services, 2006
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Some Design Lessons for States for Part D Wraparound Coverage
• Differences in cost sharing matter:
– Higher copays decrease rx use – Higher copays, tier differences, and utilization management increase generic use
• Gaps in coverage matter:
– Cap at $1750 lowers spending by 30% – Deductible affects enrollment: sicker members enroll – Deductible affects spending: 17% lower spending during deductible period
• More generous coverage decreases the income effect of lower use for lower income members • For the very poor (<100% of federal poverty), nonfinancial barriers also exist • Formularies can result in very different use and expenditures
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Lessons from Wisconsin State Response to Part D
• Useful approach to compare state program with Medicare Part D • Members who may be better off in Medicare Part D stayed in SeniorCare
– Popular familiar program – Considerable outreach – Inertia/ confusion regarding new program
• Transition enrollment problems
– Erroneously autoenrolled into Part D
• Must have popular support: Full funding for SeniorCare for 2006 • This is a unique state situation (waiver extension) but lesson for state programs
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