Lessons from Wisconsin SeniorCare Response to Medicare Part D State Perspectives on
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State Perspectives on Medicare Part D: Lessons from Pharmacy Plus Programs Lessons from Wisconsin SeniorCare Response to Medicare Part D 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 1 2 Wisconsin SeniorCare and Part D Benefits Background • Pharmacy Plus Medicaid Waivers: Expanded pharmacy coverage for low-income seniors Income by FPL <100% – 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 No deductible Copay: $5generic/ $15 brand 135-150% Sliding scale premium Deductible $50/no gap 15% coins to $5100 rx cost (160% fpl) – Program data early 2006 – AARP Sellers Feinberg financial analysis 3 Wisconsin SeniorCare: A Better Benefit than Part D for Most 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 State only program: 200-240% FPL: $850 deductible, same copays. 4 Wisconsin Challenge • CMS recommended to states: Out-of-pocket Costs for Wisconsin SeniorCare Versus Standard Part D Out-of-pocket spending 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 150-200% – Interviews with state officials in 2005/2006 Medicare Part D 2006 std. benefit Income-based Premium + Asset test (Cost share Indexed) 100-135% • Case study of Wisconsin SeniorCare: Program maintained after Medicare Part D implemented $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 Wisconsin SC Enrollment fee $30, No asset test – Eliminate Pharmacy Plus programs – Convert to SPAP so out of pocket costs would contribute to catastrophic SC <160%FPL SC 160-200%FPL • Wi. SeniorCare member analysis 2004 SC 200-240%FPL Part D $10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $750 $500 $250 $0 – <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%) Total drug spending 5 6 Source: Wisconsin Department of Health and Family Services, 2006 1 Wisconsin Choices for Pharmacy Assistance Important Factors • Very popular program since 2002 • 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 – Legislative – Public support – Wisconsin aging network well established • • • • Medicaid matching costs Other revenue sources State costs Differences in member out-of-pocket spending 7 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: 8 Estimated Cost to Wisconsin for Wraparound Coverage for SeniorCare Members $1.7 $13.1 Premiums Donut Hole: $72 million $29.7 Deductibles Copayments/coinsu rance Catastrophic $20.7 • Percent in Medicaid meeting asset test; • Wisconsin DHFS survey Total = $137.3 million dollars cost to State to wrap around program • Actual percent qualifying: 18-19% 9 Estimated Savings to Federal Government for Extending SeniorCare With Medicare Part D Fiscal Year 2003-04 ($ in millions) SeniorCare 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 Medicare Part D Drug and Out-of- Pocket Costs Pharmacy Billed Amount (Retail Price) Less SeniorCare Discount Price Savings (AWP & MAC) $204.4 $204.4 36.8 Less Other Participant Insurance Payments 1.3 Less Senior Out-of-Pocket Costs $55.2 $137.3 $111.1 $67.1 $41.5 $67.1 Subtotal - Costs Program Funding Federal Funds State Funds 38.2 Manufacturer Rebates 31.2 Subtotal - Funding $110.9 $67.1 Source: Wisconsin Department of Health and Family Services and Sellers Feinberg, 2006 10 Source: Wisconsin Department of Health and Family Services and Sellers Feinberg, 2006 11 – Uncovered classes and – SeniorCare covered drugs 12 2 Wisconsin SeniorCare Enrollment Estimates Wisconsin State Part D Market • 844,272 Medicare beneficiaries 96,872 SeniorCare members 2006 all income levels – 294,740 <200% FPL • 107,200 dual eligibles • 187,542 income eligible for SC waiver 30,474 members <135% fpl – 32% of processed LIS applications approved • Market 5,704 (20%) meet asset test full LIS – Least expensive PDP: $11/month (average $36) – 80% have no coverage in gap – 64% have no deductible (35% of low cost plans) 12,795 members 135-150% fpl 2,068 (20%) meet asset test Partial LIS Most Enrolled in Part D 53,603 members >150% fpl None qualify for LIS 1,000 (est.) enrolled in Part D Part D creditable coverage 13 14 Source: Kaiser Family Foundation, 2006 Number of SeniorCare Prescriptions per Member Before and After January 2006 Enrollment in SeniorCare Increased After Jan 2006 60000 1.2 50000 1 40000 <160% FPL 0.8 <160% FPL 160 to 200% FPL 30000 >240% FPL 20000 160 to 200% FPL 0.6 200 to 240% FPL 200 to 240% FPL >240% FPL 0.4 10000 0.2 0 Ju ly Au g Se pt O ct N ov D ec Ja n Fe b M ar Ju ly Au g Se pt O ct N ov D ec Ja n Fe b M ar 0 Average number of prescriptions per member per week Source: Wisconsin Department of Health and Family Services, 2006 15 Average Cost per Prescription for SeniorCare Before and After January 2006 Source: Wisconsin Department of Health and Family Services, 2006 16 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 $60.00 • Gaps in coverage matter: $50.00 $40.00 – Cap at $1750 lowers spending by 30% – Deductible affects enrollment: sicker members enroll – Deductible affects spending: 17% lower spending during deductible period <160% FPL 160 to 200% FPL $30.00 200 to 240% FPL • 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 >240% FPL $20.00 $10.00 Ju ly Au g Se pt O ct N ov D ec Ja n Fe b M ar $0.00 Source: Wisconsin Department of Health and Family Services, 2006 17 18 3 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 19 4
