1 / 16

Variation in Medicare Part D Prescription Drug Plan Benefits, 2006

Leslie M. Greenwald, Ph.D. Principal Scientist RTI, International. Variation in Medicare Part D Prescription Drug Plan Benefits, 2006. RTI co-authors for this work John Kautter Nathan West Gregory Pope. Purpose.

jerod
Download Presentation

Variation in Medicare Part D Prescription Drug Plan Benefits, 2006

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Leslie M. Greenwald, Ph.D. Principal Scientist RTI, International Variation in Medicare Part D Prescription Drug Plan Benefits, 2006

  2. RTI co-authors for this work • John Kautter • Nathan West • Gregory Pope

  3. Purpose • To understand how the multitude of Medicare Part D benefits and premiums differ on key elements. • Compare Part D options available through stand alone prescription drug plans (PDPs) and Medicare Advantage plans (MA-PDs).

  4. Methods • Compared premiums and selected benefits of stand alone prescription drug plans (PDPs) and Medicare Advantage plans (MA-PDs) • Used data available on the CMS Website and Health Plan Management System (HPMS) for 2006

  5. Methods • Part D plan types examined: • Basic Plans (Defined Standard, Actuarial Equivalent and Basic Alternative) • Enhanced Plans (Non-Demonstration Enhanced, Flexible Capitation Demonstration Enhanced, and Fixed Captiation Demonstration Enhanced) • Demonstration = plans offered under the Medicare Part D Reinsurance Demonstration which capitated reinsurance payments to participating plans offering enhanced benefits. • MA-PD plan types examined: • HMOs and HMO/POS • Local PPOs • Regional PPOs • Private FFS

  6. Distribution of Plans by Plan Type, 2006

  7. Average Monthly Part D Premiums, 2006

  8. Average Monthly Part D Premiums, 2006 • Monthly premiums are a key benefit element used by beneficiaries to choose among plan options. • Obtaining coverage through a Medicare Advantage plan, on average, is the least expensive option for obtaining Part D coverage. • MA-PD enrollees are often able to obtain enhanced Part D coverage for about the same (or lower) monthly premiums than basic coverage offered by stand alone PDPs. • But this choice comes only with enrollment in an MA plan, a decision that has implications beyond Part D. • Use of Medicare Part C “rebates” are commonly used by MA plans to reduce monthly premiums, an option not available to stand alone PDPs.

  9. Average Monthly Part D Premiums by MA Plan Type, 2006

  10. Average Monthly Part D Premiums by MA Plan Type, 2006 • Regional PPOs offered the lowest Part D premiums for Basic Alternative plans ($16.79), followed closely by HMO plans ($17.74). Premiums for basic alternative options offered by PFFS plans were much more costly (at $29.56). • Among non-demonstration enhanced plans, HMOs ($12.44) and Regional PPOs ($13.69) offered the lowest premiums. Premiums for PFFS plans ($26.51) were again the highest. • Among demonstration enhanced plans, Local PPO Part D premiums were the highest. • There is wide variation among MA plans geographically for Part C and D premiums. This variation is dependent on the level of market competition among plans and Medicare county payment rates.

  11. Percentage of Plans Applying Co-Payments Through Drug Tiers, 2006

  12. Percentage of Plans Applying Co-payments Through Drug Tiers, 2006 • Tiers are used by plans to define categories of drugs with different cost sharing amounts. Plans apply different out-of-pocket costs to different tiers of drugs to encourage the use of either generic or other preferred products. • Use of of only co-payments (as opposed to co-insurance) generally translates to lower costs for beneficiaries. • All plan types favored co-payments over coinsurance in applying cost sharing to their drug tiers. No clear pattern of difference between PDPs and MA-PDs. • Among most prevalent plan type (basic alternative and non-demonstration enhanced plans) MA-PD plans were more likely than PDPs to apply co-payments rather than co-insurance.

  13. Coverage of Drugs in the “Donut Hole” Gap, 2006

  14. Coverage of Drugs in the “Donut Hole” Gap, 2006 • Availability of coverage in the “donut hole” gap is a key source of difference among Part D plan benefit options. • By definition, only enhanced plan offer coverage in the gap. • Among non-demonstration enhanced plans, MA-PDs are more likely to offer either generic, or generic and brand, coverage in the coverage gap. MA-PDs may use Part C rebate funds to support gap coverage. • Among the flexible capitation demonstration plans, PDPs are more likely to offer gap coverage. • The percentage of demonstration plans offering gap coverage is generally higher compared to non-demonstration plans. The capitated reinsurance dollars available under the demonstration may be a factor in supporting gap coverage.

  15. Other Benefit Comparisons, 2006 • For both basic and enhanced products, MA-PDs divided their covered drugs into a larger number of drug tiers than PDPs. • PDPs tend to have slightly large pharmacy networks, though network size is generally very large among all plans and is therefore not a likely source of meaningful differences among plans. • Regarding formularies, MA-PDs report more extensive coverage of drugs compared to PDPs. • MA-PDs were less likely than PDPs to apply common formulary management techniques (such as prior authorization, step therapy and quantity limits).

  16. Discussion and Conclusions • MA-PDs often subsidize Part D benefits using Part C rebates – an option not available to PDPs. As a result, Medicare Advantage drug benefits can be less costly for somewhat better benefits. • But there are significant variations geographically. Benefits available to beneficiaries through MA-PDs are highly sensitive to the competitiveness of the market and Part C payment rates. • Medicare Advantage plans have the ability to influence and manage all health care services for beneficiaries, including physician prescribing patterns – an option not available to PDPs. This may also influence the richness of benefits offered. • MA-PDs on average are more likely to offer enhanced benefits than PDPs, and often at a lower price. But enrollment in an MA-PD, even open network options such as Private Fee For Service plans, is a major decision for beneficiaries.

More Related