Thursday, October 12, 2017

Ins and Outs of the Successful Medicare Part D Program

By: Jennifer W. Cline, Advocacy & Strategic Alliances, PhRMA

****Reprinted with permission****

Medicare is the federal government program that insures many of America’s retirees and people with disabilities. Medicare Part D was implemented in 2006 to provide affordable prescription drug coverage to seniors and people living with disabilities. There are many parts to this very successful program.

Today, more than 40 million Medicare beneficiaries in the United States benefit from this program. In 2017, there are, on average, 22 Part D plan choices available in every region across the country.[i] This allows beneficiaries to choose a plan that best meets their individual coverage and financial needs and, in turn, they are better able to adhere to prescribed treatment regimens.

As we enter the fall and open enrollment season, it is important to keep Medicare Part D protected, so it can continue to serve the vulnerable American populations who need it most.

Did You Know Medicare Part D offers financial assistance to those who qualify under the “Extra Help” or “Low Income Subsidy (LIS)” Program?
  • The program helps about 11.5 million low-income Part D beneficiaries by waiving or lowering their premiums and deductible, and reducing their cost sharing for individual prescriptions.
  • On average, LIS beneficiaries are in poorer health than non-LIS patients.[ii] LIS beneficiaries often have multiple conditions or diseases and are more likely to be disabled than beneficiaries overall.[iii] Additionally, the overall disease burden is greater for LIS enrollees than non-LIS enrollees across multiple disease categories, including diabetes, chronic heart failure, chronic kidney disease and COPD.[iv]
  • Unfortunately, harmful changes to this important aspect of the Part D program have been proposed, including increasing copays for brand medicines used by beneficiaries who receive Extra Help.
  • Proponents of this idea say it is intended to increase use of generic medicines, however even MedPAC has noted that generic drug use among Part D enrollees – including beneficiaries receiving Extra Help – is already high. In fact, according to MedPAC, in 2014 83 percent of prescriptions filled by beneficiaries receiving Extra Help were for generics.[v]
  • Higher copays for Extra Help beneficiaries could also limit patient and provider choice, forcing changes in prescribed treatment even if it is not medically appropriate. In many therapeutic classes, substitution between a brand name drug and a chemically different generic is not medically appropriate. Policies that put patients at risk by forcing them to take a medicine other than the one their physician prescribes may do more harm than good by reducing adherence, which could in turn lead to poor health outcomes and increase total health care spending.
Did you know that negotiations already happen in the Part D program, helping reduce overall costs?
  • Part D is a competitive private market, rather than a system with government-set pricing. Private Part D plans negotiate substantial discounts and rebates with drug manufacturers, without the government meddling. According to a recent study, these substantial rebates have resulted in an average 35.3 percent discount from manufacturer list prices across 12 widely used therapeutic areas in Part D.[vi]
  • The Medicare Trustees have also repeatedly said negotiated discounts and rebates are substantial and continue to grow. In fact, the 2017 report shows rebate levels increased to 18.2 percent in 2015.[vii] There is broad agreement the Secretary of HHS could not negotiate lower prices. The Congressional Budget Office (CBO) has repeatedly found that “the Secretary would be unable to negotiate prices across the broad range of covered Part D drugs that are more favorable than those obtained by [Prescription Drug Plans (PDPs)] under current law.”[viii] And the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS) has come to the same conclusion.
Did you know that Part D’s competitive structure has kept costs affordable and beneficiary satisfaction rates high?
  • Medicare beneficiaries have enjoyed relatively stable monthly Part D premiums. CMS estimates that the average monthly Part D premium for 2018 will decrease to $33.50 – roughly a dollar less than the average monthly premium in 2017.[ix]
  • Part D costs are $349 billion (or 45 percent) less than initial 10-year projections, and Part D made up just 13.7 percent of total Medicare spending in 2016.[x]
  • 87 percent of Part D prescriptions are generic[xi] (up from about 50 percent before the program was implemented)[xii], keeping costs low.
  • Multiple studies have shown about 9 in 10 Medicare beneficiaries are satisfied with their Part D coverage.[xiii]
And did you know that the affordable access provided by Part D helps improve beneficiaries’ overall health and reduces the use of other costly and avoidable health care services?
  • A recent study found, since 2006, nearly 200,000 Medicare beneficiaries have lived at least one year longer, with an average increase in longevity of 3.3 years. On average, 22,100 lives were saved each year between 2006 and 2014, primarily from fewer deaths from medication-sensitive conditions like diabetes and cardiovascular disease.[xiv]
  • A study in the National Bureau of Economic Research reported gaining Medicare Part D coverage was linked to an 8 percent decrease in hospital admissions for seniors.[xv] Gaining coverage also helped improve treatment adherence for enrollees with congestive heart failure, leading to more than $2.3 billion in annual Medicare savings.[xvi]
Medicare Part D helps retirees and people with disabilities live longer, healthier lives and is a vital component of our nation’s health care system.  Serving people who need it most, Part D must be protected and strengthened in the years to come.


Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.


__________
[i] Kaiser Family Foundation, “Medicare Part D: A First Look at Prescription Drug Plans in 2017,” October 2016. http://kff.org/report-section/medicare-part-d-a-first-look-at-prescription-drug-plans-in-2017-findings/
[ii] Medicare Payment Advisory Commission, “Report to Congress: Medicare Payment Policy,” March 2012.
[iii] Ibid. 
[iv] Stuart BC, et al. University of Maryland and PhRMA Chartbook: Medication Utilization Patterns and Outcomes Among Medicare Part D Enrollees with Common Chronic Conditions. September 2014. p. 16-17. https://www.pharmacy.umaryland.edu/media/SOP/wwwpharmacyumarylandedu/centers/lamy/pdf/Part_D_Chartbook_Final_2014.pdf.; BC Stuart et al. Why Do Low-Income Subsidy (LIS) Recipients Have Higher Part D Drug Spending? Poster presentation at AcademyHealth Annual Research Meeting, June 2014 San Diego. 
[v] Medicare Payment Advisory Commission, “Report to Congress: Medicare Payment Policy” March 2017, p. 410. 
[vi] QuintilesIMS Institute, “Estimate of Medicare Part D Costs After Accounting for Manufacturer Rebates,” October 2016. http://www.imshealth.com/files/web/IMSH%20Institute/Reports/IIHI_Estimate_of_Medicare_Part_D_Costs.pdf
[vii] https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2007-Press-releases-items/2007-01-11.html
[viii] Remarks of CBO Director Dr. Douglas Elmendorf before the Senate Finance Committee, February 25, 2009 https://www.finance.senate.gov/imo/media/doc/62182.pdf
[ix] CMS press release, “Medicare Issues Projected Drug Premiums for 2018,” August 2, 2017.
[x] See CBO Medicare Baselines available at www.cbo.gov
[xi] Medicare Trustees. The 2017 annual report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds. July 2017:143(footnote 66).
[xii] Pharmaceutical Research and Manufacturers of America analysis based on IMS Health, Vector One®: National Audit data. Data extracted September 21, 2012.
[xiii] Morning Consult Survey for Medicare Today, “Nearly Nine in10 Seniors Satisfied with Medicare Part D,” July 2016; MedPAC, Report to Congress: Medicare Payment Policy, March 2013, p. 345.
[xiv] Semilla, et al., “Reductions in Mortality Among Medicare Beneficiaries Following the Implementation of Medicare Part D,” The American Journal of Managed Care, Vol. 21, No. 9, Sup., July 2015.
[xv] Kaestner R, Long C, Alexander C. Effects of prescription drug insurance on hospitalization and mortality: evidence from Medicare Part D. The National Bureau of Economic Research. http://www.nber.org/papers/w19948. Published February 2014.
[xvi] Dall et al., “The Economic Impact of Medicare Part D on Congestive Heart Failure,” The American Journal of Managed Care, May 2013.

Thursday, October 5, 2017

The Healthcare We’ve Been Waiting For?

By: Sue Saltmarsh, Executive Director, Demand Universal Healthcare

On September 13th, U.S. Senator Bernie Sanders (I-VT) stood surrounded by a number of his Senate colleagues to unveil the Medicare for All Act, or the Universal Medicare Program as it’s called in Title I, S. 1804. Never mind that most of those Democrats had fallen all over themselves to surf the wave of the people’s vociferous demand for single-payer healthcare instead of getting wiped out by it. But the purpose of this blog is to examine and assess the actual legislation, so on to it.

Simple facts first – if you are an H.R. 676 (the Expanded & Improved Medicare for All Act) purist, you will not be satisfied with this bill. If you are an Affordable Care Act (ACA) apologist, you should like it since it addresses most of the abject failures and hard lessons of the ACA. And if you’re living with a chronic, sometimes fatal disease, terrified of losing your Medicaid or unaffordable ACA insurance, not to mention having to deal with worsening illness as medications become harder to come by if you haven’t won the lottery lately, the text of the bill will give you renewed hope that you might actually live long enough to see the end of Trump!

The bill is NOT perfect, but it is a long way ahead of Clintonesque incrementalism and far closer to the gold standard of H.R. 676 than any Senate Democratic effort to date. There is cautious optimism within the single-payer activism community. We’ve seen what the legislative process can do to a good bill and won’t breathe easy until it’s not just passed, but implemented, but we are, to varying degrees, behind it.

Photo Source: inquisitr.com

What it does

Let’s start with what it achieves. “Every individual who is a resident of the United States is entitled to benefits for health care services under this Act.” Note “residents,” not “citizens” (though the Secretary of the U.S. Department of Health & Human Services (HHS) has the power to determine the meaning of “resident”). Of course, Republicans will blast this with a “they take our jobs; now they’ll take our health care!” argument, one we should not be polite about debunking. And we should be prepared for losing it if by changing to “citizens” we get the Republican votes to pass it. Remember, if we do our jobs in 2018, there will be a Democratic Senate and amendments can be made.

Like H.R. 676, it also includes in Section 201 its list of benefits which are more comprehensive than the ACA, including dental, vision, and hearing. It also states in Sec 201(a)(4), “Prescription drugs, medical devices, biological products, including outpatient prescription drugs, medical devices, and biological products.” More about this later.

Specific language protecting reproductive rights, both in the non-discrimination Section 104 and the Sec. 201(a) list of benefits-- “RESTRICTIONS SHALL NOT APPLY. Any other provision of law in effect on the date of enactment of this Act restricting the use of Federal funds for any reproductive health service shall not apply.” Further, the bill would forbid discriminating against an eligible provider on the grounds that they provides abortion. This may set off a Republican push to refocus repeal efforts on Roe v. Wade, but I say it’s well past time for progressives to reach out to Libertarians and join forces to put our collective foot down and say, “NO MORE!” to the anti-choice zealots! Why have we allowed them to dictate their ideological public policy over established law anyway? Another issue we can’t afford to be courteous about.

Speaking of choice, S. 1804, like H.R. 676, will give us the freedom to choose our doctors, other providers, and facilities with no concern about networks or referrals that need “prior approval.” That truly is choice, contrary to the mythical choice Republicans have claimed their draconian repeal-and-replace efforts would include.

Another major single-payer goal is included in the provision that the system will be publicly funded through a variety of options, including a modest tax increase and the elimination of “escape hatches” for the wealthy and corporations to avoid paying anywhere near their fair share. This will be done via the establishment of the Universal Medicare Trust Fund where money from now obsolete healthcare programs (Medicare, the Federal Employees Health Benefit Program, TRICARE, etc.), the tax increases, fees, gifts, and bequests will be deposited and expenses paid.

For the howlers who accuse Bernie of handing out herds of fantasy “ponies” with no plan on how to pay for them, all they have to do is read his 5-page paper Options to Finance Medicare for All (available at https://www.sanders.senate.gov/download/options-to-finance-medicare-for-all) to see that he has thought, researched, and consulted about how to finance his plan and found many ways to do it fairly, though politicians of either party won’t like it because it will require them to pay more while we worthless, lazy “takers” out here will finally catch a break.

For those who worry about the current employees of the insurance industry, first, insurance will still exist so not all jobs will be lost. Then Section 601(4) provides 1% of the entire healthcare budget for up to five years from when benefits become available for programs “providing assistance to workers who perform functions in the health insurance system and who may experience economic dislocation as a result of the implementation of the Act.”

A few other goodies:

  • Section 802 provides for repeal of COBRA continuation coverage requirements under ERISA
  • Continuity of care is a priority in every section dealing with actual care, treatment, benefits during transition, etc.
  • Section 901(2) provides that no reevaluation of the Indian Health Service shall be done without consultation with tribal leaders and stakeholders
  • Section 1014 eliminates the 24-month waiting period for Medicare coverage for disabled individuals. 

Photo Source: Gerald Friedman 

What it doesn’t do

There are several major problems with the bill, the first of which is that long-term care is not covered under S. 1804 like it is in H.R. 676. Here, it would be covered by Medicaid, thus keeping Medicaid operating instead of returning the money spent there to the healthcare trust, as well as perpetuating the trap of people, especially families, having to live in poverty in order to qualify for Medicaid. This will be one provision that activists will focus on.

The contradiction of prescription drugs being covered as per the list of benefits is confusing when, in Section 202 “No Cost-Sharing,” there’s an exception for which “the Secretary may set a cost-sharing schedule for prescription drugs and biological products, provided that (i) such schedule is evidence-based and encourages the use of generic drugs; (ii) such cost-sharing does not apply to preventative drugs; and (iii) such cost-sharing does not exceed $200 annually per individual adjusted annually for inflation.”

Much is being made of drugs not being covered, but perhaps we should take a breath and put some hope in that little word “may” – the Secretary may set a cost-sharing schedule…but he or she doesn’t have to. Of course one like Price would, but once again, if we elect a president with a progressive agenda, his or her Cabinet would be less likely to include a Secretary of Health & Human Services who would want to bring back cost-sharing.

It also allows for investor-owned, profit-driven facilities such as MRI and imaging clinics, labs, and rehab facilities to continue to operate and to increase profits for their investors by raising prices, performing unnecessary and/or excessive testing and procedures, and generally propping up the idea of healthcare as a commodity.

Perhaps worst of all, considering what we’ve learned with the ACA, is the four-year time period set for full implementation. Historically, both here with Medicare and abroad with different countries’ universal systems, implementation has been done all at once without today’s technology (within a year usually). Phasing it in over four years only eats up cost savings we’ll need to help fund it, as well as preventing early proof of efficacy. It also provides time for things to go wrong or to be sabotaged, giving the long knives of the opposition’s propaganda an opportunity to carve it up as they have the ACA.

Pages 65 through 95 are devoted to the transition period between passage of the law and full implementation. The Medicare buy-in concept is proposed as the appropriate way to shift from the mess we have now to the Universal Medicare Program – acronym UMP which is exactly what we’ll need to get through the “game” of this extra four years of complication. I don’t know what exactly Bernie’s strategy was in devising this, but I do trust that he has one and knowing him, it involves foresight, a rare and exotic asset in a politician, but one he has boatloads of.

Conclusion

I don’t know that I and Demand Universal Healthcare have reached a final conclusion on S. 1804. We, too, are cautiously optimistic and it’s easy to see the immediate relief and hope this would bring to the millions of people who right now are desperately trying to stay alive and well despite what feels like a deliberatively punitive obstacle course of barriers set up by people who have not yet been in the shoes of the sick or the impoverished.

For the HIV/AIDS community, this could bring a whole new color to the tapestry of living with HIV and all that comes with it, physically, mentally, emotionally, financially, and socially. The lofty goals of the National Strategy could finally be realized as “test and treat” became the normal, easy course of events. The great work of the ADAP Advocacy Association could continue in efforts to make access to all drugs, brand names included, a priority as more new drugs come down the pipeline and generics become ineffective compared to the new ones.

I have always been a realist. I never wanted a pony and I don’t now. The Right is offering us a dark horse that will eat everything in sight and then kick down the barn and I’m certainly not buying that. Bernie isn’t Merlin and yet he holds at least this idea that could become magic. And I’m willing to work to see that it gets a chance.


Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.