The Potential Impact of the New Prescription Drug Benefit on Medicare Beneficiaries

1. The Potential Impact of theNew Prescription Drug Benefit on Medicare Beneficiaries Stuart Guterman Director, Program on Medicare’s Future The Commonwealth Fund AcademyHealth Annual Research Meeting June 27, 2006

2. What Do We Want FromThe New Drug Benefit? • Continuity—Will beneficiaries with coverage before have corresponding (or better) coverage under Part D? • Availability—Will beneficiaries be able to find a plan that’s best for them? • Access—Will beneficiaries be able to get the drugs they need?

3. Concern AboutVulnerable Populations • Medicaid recipients • Other low-income beneficiaries • Nursing home residents • Frail and disabled beneficiaries • Chronically ill beneficiaries • Racial and ethnic minorities

4. Source of Prescription Drug Coveragefor Community-DwellingMedicare Beneficiaries, 1998-2000 Percent Source: B. Stuart, et al. “Riding the Roller Coaster: The Ups and Downs in Out-of-Pocket Spending Under the Standard Medicare Drug Benefit.” Health Affairs. 24(4). (July/August 2005): 1025.

5. Source of Prescription Drug Coverage for Medicare Beneficiaries Residing in Nursing Homes, 2001 No Rx coverage 20% Other supplement with Rx coverage 9 % Full Medicaid 56% Other supplement with Rx coverage unknown 15 % Source: Stuart, B. et al. “Coverage and Use of Prescription Drugs in Nursing Homes: Implications for the Medicare Modernization Act.” Medical Care. 44(3). (March 2006): 243.

6. Coverage, Income, and Chronic Illness Are Factors in Adherence toPrescribed Drug Regimens Percent of Seniors Not Adhering to Prescribed Drug Regimens Source: Safran, D. et al. “Prescription Drug Coverage and Seniors: Findings From a 2003 National Survey.” Health Affairs Web exclusive. April 19, 2005.

7. Beneficiary Out-of-Pocket Costs Under the Medicare Part D Standard Benefit, 2006 Out-of-Pocket Cost

8. Deductibles Offered by Medicare Stand-Alone Prescription Drug Plans, 2006 $250 34% of plans $0 58% of plans $150-$175 0% $50-$100 8% Source: CMS, PDP Landscape of Local Plans Source File as of November 15, 2005.

9. Availability of Coverage in thePart D “Coverage Gap” Generics only 13% of plans Generics and Brand 3% of plans No coverage 84% of plans Source: CMS, PDP Landscape of Local Plans Source File as of November 15, 2005.

10. Average Plan Premiums by Deductible and Availability of Coverage in thePart D “Coverage Gap” Plan Premium Source: CMS, PDP Landscape of Local Plans Source File as of November 15, 2005.

11. The Papers in This Session • Defining and Measuring Performance of Medicare Prescription Drug Plans’ Formularies Tanisha Carino, Ph.D., Avalere Health • Following Doctors’ Orders…or Not: Medication Adherence Among Medicare Beneficiaries and What We Can Expect Part D Coverage to Accomplish Dana Gelb Safran, Ph.D., Tufts/New England Medical Center • Drug Coverage, Disease Burden, and the Intensity of Medication Use among Medicare Beneficiaries Bruce Stuart, Ph.D., University of Maryland at Baltimore • Discussant: Scott Young, MD, AHRQ