Five-Year
i
Trends
d iin
Medicare Part D Program
Offerings
Juliette Cubanski,, Ph.D.
Kaiser Family Foundation
AcademyHealth Annual Research Meeting
Boston MA
Boston,
June 29, 2010
Coauthors:
Jack Hoadley, Georgetown University
Elizabeth Hargrave, NORC at the University of Chicago
Laura Summer,
Summer Georgetown University
Tricia Neuman, Kaiser Family Foundation
Exhibit 1
Background
g
and Overview
• Medicare Part D drug benefit took effect in 2006
– Established new nationwide marketplace of stand
stand-alone
alone prescription
drug plans
– Expanded availability of private Medicare Advantage plans
– More
M
than
th 27 million
illi beneficiaries
b
fi i i currently
tl enrolled
ll d in
i Part
P t D plans
l
• Kaiser Family Foundation has been collaborating with
Georgetown University/NORC since Fall 2006 to conduct
research on trends and developments in the Part D
marketplace
– Fi
Five
e years
ea s of anal
analysis
sis of plan availability,
a ailabilit enrollment,
en ollment premiums,
p emi ms benefit
design, formularies, cost sharing
– Analysis of data from Medicare Part D plan “landscape” source files,
enrollment
ll
t files,
fil
and
d Medicare
M di
Prescription
P
i ti Drug
D
Plan
Pl Finder
Fi d website
b it
• This presentation focuses on 2006-2010 trends in plan
availability (including low-income
low income subsidy plans),
premiums, regional variation, and consumer choice issues
Exhibit 2
Number of Medicare Part D Stand-Alone
Prescription Drug Plans,
Plans 2006-2010
2006 2010
Including Those Available Without a Premium to
Low-Income Subsidy Recipients (“Benchmark Plans”)
Non-Benchmark Plans
1,857
1,824
De Minimis Plans*
1,689
,689
Benchmark Plans
1,576
1,429
1 235
1,235
1,329
1,381
1,020
157
1,269
53
409
483
442
2006
200
2007
2008
308
307
2009
2010
SOURCE: Georgetown/NORC/Kaiser Family Foundation analysis of CMS PDP Landscape Source Files, 2006-2010.
NOTE: Excludes PDPs in the territories. *Under a Medicare demonstration, de minimis plans were eligible to retain LIS
beneficiaries despite exceeding the benchmark premium by $2 in 2007 and $1 in 2008.
Exhibit 3
Top 10 Firms Offering Medicare Part D Plans Ranked
b 2006 Enrollment
by
E
ll
t in
i 2006 and
d 2010
2006
Name of firm
Rank
2010
Enrollment
(in millions)
Rank
Enrollment
(in millions)
% of Total
Part D in
i
2010
Change
2006
20062010
UnitedHealth Group
1
5.70
1
6.39
23.5%
+12%
Humana
2
4.36
2
3.21
11.8%
-26%
Wellpoint
3
1.25
5
1.17
4.3%
-11%
WellCare Health Plans
4
0.98
7
0.86
3.2%
-12%
MemberHealth*
5
0.96
n/a
n/a
n/a
n/a
Kaiser Permanente
6
0.78
6
0.93
3.4%
+19%
Coventry Health Care
7
0.74
4
1.78
6.6%
+140%
Universal American
8
0.47
3
2.04
7.5%
+330%
Health Net
9
0.46
10
0.71
2.6%
+55%
10
0.42
11
0.68
2.5%
+63%
Medco Health Solutions
TOTAL PART D
22.49 mil
27.58 mil
+23%
SOURCE: 2006 data from Cubanski and Neuman, Health Affairs, 2006; Georgetown/NORC/Kaiser Family Foundation analysis
of CMS PDP Landscape Source Files, 2006-2010.
NOTE: Excludes plans in the territories. *MemberHealth was acquired by Universal American in 2007.
Exhibit 4
Top 10 Medicare Part D Plans Ranked by 2006
E
Enrollment
ll
t in
i 2006 and
d 2010
Name of Part D Plan
2006
Rank
% of Total
Part D in
2010
Change
20062006
2010
10.2%
-12%
294,086
1.1%
-86%
86%
1,324,060
4.8%
+37%
243,687
0.9%
-72%
1,230,655
4.5%
+55%
n/a
n/a
2010
Enrollment
Rank
Enrollment
AARP MedicareRx Preferred PDP
1
3,192,276
1
Humana Standard PDP
2
2,043,660
19
Humana Enhanced PDP
3
965,975
3
WellCare Signature PDP
4
872,362
23
Community CCRx Basic PDP
5
792,267
4
PacifiCare Saver Plan PDP
6
726,666
n/a
Kaiser Permanente Senior
Advantage HMO
7
664 389
664,389
6
602 485
602,485
2 2%
2.2%
-9%
AARP MedicareComplete Plan 1
HMO
8
505,634
22
266,350
1.0%
-47%
M di
MedicareRx
R R
Rewards
d
9
490 819
490,819
n/a
/
n/a
/
n/a
/
n/a
/
10
424,945
12
433,378
1.6%
+2%
Humana Gold Choice PFFS
TOTAL PART D
22,491,177
2,816,094
n/a
27,579,886
+23%
SOURCE: 2006 data from Cubanski and Neuman, Health Affairs, 2006; Georgetown/NORC/Kaiser Family Foundation analysis
of CMS PDP Landscape Source Files, 2006-2010.
NOTE: Excludes plans in the territories.
Exhibit 5
Weighted Average Monthly Stand-Alone
P e i tio Drug
Prescription
D
Plan
Pla Premiums,
P e i
2006-2010
2006 2010
2006-2010
2006
2010 increase = 44% ($11.32)
$45
$40
$35.09
$35
$30
$25.93
$27.39
$37.25
$29.89
$25
$20
$15
$10
$5
$0
$
2006
2007
2008
2009
2010
SOURCE: Georgetown/NORC analysis of CMS PDP Landscape Source Files, 2006-2010, for the Kaiser Family Foundation.
NOTE: Average premiums are weighted by enrollment in each year. Excludes Part D plans in the territories.
Exhibit 6
Premiums in Medicare Stand-Alone Prescription Drug
Pl
Plans
with
ith Highest
Hi h t Enrollment,
E
ll
t 2006-2010
2006 2010
Name of PDP
2010 Enrollment
( f 16.6
(of
6 6 million)
illi )
Weighted Average
*
Monthly
hl Premium
i
2010
20092010
20062010
$37.03
$39.41
+6%
+50%
$14.43
$28.69
$30.25
+5%
+110%
8.0%
$14.73
$38.21
$41.40
+8%
+181%
1,228,765
7.4%
$30.94
$30.18
$28.86
- 4%
- 7%
609,980
3.7%
$28.32
$27.86
$33.69
+21%
+19%
Number
% of
Total
2006
2009
AARP MedicareRx
Preferred
2,807,892
16.9%
$26.31
AARP MedicareRx
Saver**
1,526,849
9.2%
Humana PDP
Enhanced
1,323,827
CCRx Basic
Silverscript Value
% Change
SOURCE: Georgetown/NORC analysis of CMS PDP Landscape Source Files, 2006-2010, for the Kaiser Family Foundation.
NOTE: *Average premiums are weighted by enrollment in each region for each year.
** Plan not offered in 2006; premium amount shown in 2006 column is for 2007, change is from 2007-2010.
Exhibit 7
Regional Variation in Medicare Stand-Alone
Prescription Drug Plan Availability,
Availability 2006-2010
YEAR
2006
2007
2008
CHANGE
2009
2010
20062010
20092010
55
+3
-2
+14
-4
+3
-3
-1
-1
Number of PDPs
High
g
Low
Median
52
66
63
57
PA/WV
PA/WV
PA/WV
PA/WV
PA/WV
27
45
47
45
41
43
55
53
49
46
26
20
16
15
AK
AK
AK
AK
AK
Number of PDPs Below LIS Benchmark
High
Low
Median
16
SC; TX; VA
6
PA/WV;
SC; MI
9
SC
5
WI
1
AR
FL
NV
NV
NV
NH/ME
4
-2
+3
13
20
15
9
9
-4
0
$104.89
$135.70
$107.50
$136.80
$120.20
+$15.31
-$16.60
$9.50
$9.80
$10.30
$8.80
+$6 93
+$6.93
-$1.50
$1 50
Monthly PDP Premiums
High
Low
FL
$1.87
IA/MN/MT
NE/ND/SD/WY
NJ
NY
NY
AZ
NY
NM
SOURCE: Kaiser Family Foundation analysis of CMS PDP Landscape Source Files, 2006-2010.
NOTE: Excludes plans in the territories. LIS is low-income subsidy.
DE/DC/MD
OR/WA
Exhibit 8
Top Three Firms Offering Medicare Stand-Alone
P
Prescription
i ti
Drug
D
Plans
Pl
In
I Each
E hR
Region,
i
2010
#1 Enrollment Firm
#2 Enrollment Firm
#3 Enrollment Firm
# of
regions
Avg.
Share
Name of firm
28
31.1%
Coventry
8
Humana
11
Universal American
3
20.2%
Universal American
7
Coventry
8
Humana
2
21.3%
CVS Caremark
5
Universal American
7
Wellmark BCBS of Iowa
1
29.1%
Humana
4
UnitedHealthcare
3
34
29.5%
UnitedHealthcare
i d
l h
2
CVS Caremark
k
2
HIGH = UnitedHealthcare : 52.5% (NH/ME)
WellCare
2
Blue MedicareRx
1
LOW = UnitedHealthcare: 15.7% (WI)
HISC BCBS
2
Health Net
1
Arkansas Blue Cross
1
Wellpoint
1
Health Net
1
TOTAL (8 firms)
HealthSpring PDP
1
Wellpoint
1
Name of firm
UnitedHealthcare
TOTAL (4
( fi
firms))
HERFINDAHL INDEX:
High= 3266
Low = 1014
Average = 1657
TOTAL (11 firms)
# of
regions
Name of firm
34
SOURCE: Georgetown/NORC/Kaiser Family Foundation analysis of CMS PDP Landscape Source Files, 2006-2010.
NOTE: Excludes plans in the territories.
# of
regions
34
Exhibit 9
Top Three Medicare Stand-Alone
P
Prescription
i ti
Drug
D
Plans
Pl
In
I Each
E hR
Region,
i
2010
#1 Enrollment PDP
#2 Enrollment PDP
# off
regions
Avg.
Share
Name of PDP
25
18.7%
Humana Enhanced
7
AARP MedicareRx
Saver
8
Community CCRx Basic
4
17.3%
Community CCRx
Basic
6
Community CCRx
Basic
4
AARP MedicareRx Saver
3
27.6%
AARP MedicareRx
Preferred
5
AARP MedicareRx
Preferred
3
Humana Enhanced
2
17.4%
AARP MedicareRx
Saver
4
Humana Enhanced
3
34
19.3%
PrescribaRx Bronze
3
SilverScript Value
2
HIGH AARP M
HIGH:
MedicareRx
di
R S
Saver=32.9%
32 9% (HI)
Sil
SilverScript
S i t Value
V l
3
W llC
WellCare
Classic
Cl
i
2
LOW: AARP MedicareRx Preferred=10.7% (WI)
Health Net Orange
Option 1
2
Health Net Orange
Option 1
1
PrescribaRx
Bronze
1
Name of PDP
AARP MedicareRx
Preferred
TOTAL (4 PDPs)
HERFINDAHL INDEX:
Hi h = 1663
High
Low = 522
Average = 909
4 other PDPs
TOTAL (11 PDPs)
# off
regions
#3 Enrollment PDP
1 each
34
Name of PDP
10 other PDPs
TOTAL (18 PDPs)
SOURCE: Georgetown/NORC/Kaiser Family Foundation analysis of CMS PDP Landscape Source Files, 2006-2010.
NOTE: Excludes plans in the territories.
# off
regions
1 each
34
Exhibit 10
Conclusions
•
The Part D marketplace has matured rapidly
– Have not seen the consolidation that some predicted
– Dozens of plan options available in each state since 2006
•
The effects of competition are not apparent
– A handful of players are dominant in each region
– Premiums have increased, in some cases dramatically, even in the most
popular plans
•
Too much choice has been a concern for some enrollees
– Discerning the differences between plans, including basic vs. enhanced
coverage, can be difficult, especially when plan names do not serve to
distinguish one type of coverage from the other
• Examples: “Value” = basic (CVS Caremark) and enhanced (Coventry)
“Premier” = basic (Coventry) and enhanced (Aetna)
“Enhanced” = basic (Humana) and enhanced (UnitedHealthcare)
•
Lack of choice has been a concern for those receiving the lowincome subsidy (LIS)
– Instability in plans available to LIS enrollees creates disruption in coverage
and can diminish the value of the subsidy for those who choose to stay in
non-benchmark plans
Exhibit 11
Policy Implications
• In regulations issued in April 2010, CMS acknowledged that
organizations have “not consistently submitted plan benefit
designs that are significantly different from each other, which
can add to beneficiary confusion”
– New regulations attempt to “address beneficiary concerns associated with
the annual task of selecting one plan from so many options”
options
• New regulations are designed to:
– Strengthen
g
CMS’s abilityy to approve
pp
strong
g applicants
pp
and remove
consistently poor performers
– Strengthen beneficiary protections
– Ensure meaningful differences in plan offerings through changes to bid
submission and review process, and non-renewal of low-enrollment plans
• The Affordable Care Act should help stabilize LIS offerings
– Revises calculation of benchmark premiums to exclude the portion of
Medicare Advantage plan premiums reduced by rebates or bonus payments
– Codifies the “de minimis” rule for benchmark plan premiums, allowing plans
to retain LIS enrollees by waiving a small premium amount above the
benchmark