Juliette Cubanski, Ph.D. Juliette Cubanski, Ph.D. The Henry J. Kaiser Family FoundationThe Henry J. Kaiser Family Foundation

Medicare Policy Project - www.kff.org/medicareMedicare Policy Project - www.kff.org/medicare

Families USAFamilies USAHealth Action 2007Health Action 2007Washington, D.C.Washington, D.C.

25 January 200725 January 2007

MEDICARE PART D MEDICARE PART D Where Do We Stand?Where Do We Stand?Where Are We Going?Where Are We Going?

OverviewOverview

Part D Plan Landscape and EnrollmentPart D Plan Landscape and Enrollment Private plan availability is higher in 2007 than 2006, and Private plan availability is higher in 2007 than 2006, and

there continues to be wide variation in coverage and there continues to be wide variation in coverage and benefit design benefit design

The majority of beneficiaries now have drug coverage, but The majority of beneficiaries now have drug coverage, but around 10% (~4 million) are not enrolledaround 10% (~4 million) are not enrolled

Views and Experiences of Beneficiaries and Views and Experiences of Beneficiaries and ProvidersProviders Most enrollees say they are satisfied with their Part D plans Most enrollees say they are satisfied with their Part D plans

so far, but many are still vulnerable to high out-of-pocket so far, but many are still vulnerable to high out-of-pocket costscosts

Pharmacists and physicians have played a key role in Pharmacists and physicians have played a key role in helping beneficiaries navigate their Part D planshelping beneficiaries navigate their Part D plans

Unanswered Questions and Issues to MonitorUnanswered Questions and Issues to Monitor

Exhibit 1

Part D - The Medicare Drug BenefitPart D - The Medicare Drug Benefit

Exhibit 2

Drug benefit is offered exclusively through private Drug benefit is offered exclusively through private organizations, not traditional Medicareorganizations, not traditional Medicare 2 types:2 types:

Stand-alone prescription drug plans (PDPs) that supplement Stand-alone prescription drug plans (PDPs) that supplement traditional fee-for-service Medicaretraditional fee-for-service Medicare

Medicare-Advantage prescription drug (MA-PD) plans – Medicare-Advantage prescription drug (MA-PD) plans – integrated medical and drug benefits – primarily HMOs, PPOsintegrated medical and drug benefits – primarily HMOs, PPOs

Plans can change from year to year – add, drop, modifyPlans can change from year to year – add, drop, modify

New approach to delivering a Medicare benefitNew approach to delivering a Medicare benefit Take-up is voluntary, not automaticTake-up is voluntary, not automatic Standard benefit available, but plans can varyStandard benefit available, but plans can vary Coverage and cost depends on plan chosenCoverage and cost depends on plan chosen

Additional subsidies (“extra help”) available to Additional subsidies (“extra help”) available to people with low incomes, but subject to income and people with low incomes, but subject to income and asset testasset test ““Dual eligibles” no longer have drug coverage through Dual eligibles” no longer have drug coverage through

MedicaidMedicaid

Changes in Plan Options from Changes in Plan Options from 2006 to 20072006 to 2007

Plan participationPlan participation Mostly the same organizations but far more plan optionsMostly the same organizations but far more plan options

PDPs: PDPs: 1,429 in 2006 1,429 in 2006 to to 1,875 in 20071,875 in 2007 MA plans: MA plans: 3,195 in 2006 3,195 in 2006 to to 3,971 in 20073,971 in 2007

Monthly premiumsMonthly premiums Lowest increasing from Lowest increasing from $1.87$1.87 to to $9.50$9.50 Highest increasing from Highest increasing from $104.89 $104.89 to to $135.70$135.70

Benefit design and formulariesBenefit design and formularies Minor changes in many plan offerings, along with major Minor changes in many plan offerings, along with major

changes in some otherschanges in some others According to CMS, at least a 13% increase in number of According to CMS, at least a 13% increase in number of

drugs covereddrugs covered

Exhibit 3

DC

61

57

57

55

54

56

56

5353 5

3

53

53

53

53

5357

60

53

57

55

5358

58

56

57

59

56

54 5

454 5

457

53

61

53

51

56

53

66

53

45

51

53

66

46

51

45-50 drug plans (2 states)45-50 drug plans (2 states)51-55 drug plans (26 states)51-55 drug plans (26 states)56-60 drug plans (18 states)56-60 drug plans (18 states)61-66 drug plans (5 states)61-66 drug plans (5 states)

Beneficiaries in Most States Beneficiaries in Most States Had a Choice of At Least 50 PDPs in 2007Had a Choice of At Least 50 PDPs in 2007

1,875 Stand-alone PDPs Offered 1,875 Stand-alone PDPs Offered NationwideNationwide

Exhibit 4

57

Most Beneficiaries Had Access to One or Most Beneficiaries Had Access to One or More Medicare Advantage Plans in 2007More Medicare Advantage Plans in 2007

San Diego San Diego County: County: 24 MA-PD 24 MA-PD

Plans Plans (+ 55 PDPs (+ 55 PDPs

and and 2 SNPs)2 SNPs)

Miami/Miami/Dade Dade

County: County: 43 MA-PD 43 MA-PD

Plans Plans (+ 57 PDPs and (+ 57 PDPs and

19 SNPs)19 SNPs)

Polk County: Polk County: 20 MA-PD 20 MA-PD

Plans Plans (+ 53 PDPs and (+ 53 PDPs and

2 SNPs)2 SNPs)

3,971 MA Plans Offered Nationwide3,971 MA Plans Offered Nationwide

Exhibit 5

Standard Medicare Prescription Drug Benefit, 2007Standard Medicare Prescription Drug Benefit, 2007

$328 Average Annual Premium$328 Average Annual Premium

$265 Deductible$265 Deductible

$2,400 in $2,400 in Total Drug CostsTotal Drug Costs

$5,451 in $5,451 in Total Drug CostsTotal Drug Costs ($3,850 out of pocket)($3,850 out of pocket)

$3,051 Coverage Gap (“Doughnut

Hole”)

NOTE: Annual premium amount based on $27.35 national average monthly beneficiary premium (CMS, NOTE: Annual premium amount based on $27.35 national average monthly beneficiary premium (CMS, August 2006). Amounts for premium, coverage gap, and catastrophic coverage threshold rounded to August 2006). Amounts for premium, coverage gap, and catastrophic coverage threshold rounded to nearest dollar.nearest dollar.SOURCE: Kaiser Family Foundation illustration of standard Medicare drug benefit, updated with Part D SOURCE: Kaiser Family Foundation illustration of standard Medicare drug benefit, updated with Part D benefit parameters for 2007 (from CMS, OACT, May 22, 2006).benefit parameters for 2007 (from CMS, OACT, May 22, 2006).

Plan Pays 75%

Plan Pays 15%; Medicare Pays

80%

Enrollee Pays Enrollee Pays 100%100%

Enrollee Pays Enrollee Pays 5%5%

Enrollee Enrollee Pays Pays 25%25%

Beneficiary Out-of-

Pocket Spending

Exhibit 6

41%

8%

27%

47%

60%

1%

71%

32%

12%

SOURCE: Hoadley et al. Benefit Design and Formularies of Medicare Drug Plans: A Comparison of 2006 and 2007 SOURCE: Hoadley et al. Benefit Design and Formularies of Medicare Drug Plans: A Comparison of 2006 and 2007 Offerings; November 2006.Offerings; November 2006.

EnhancedEnhancedActuarially Actuarially EquivalentEquivalent

StandardStandard $250$250 $0$0PartialPartial(<$250)(<$250)

No No CoverageCoverage

Generic Generic OnlyOnly

Brand and Brand and GenericGeneric

Benefit DesignBenefit Design Coverage in the Coverage in the GapGap

Deductible AmountDeductible Amount

The “Standard” Drug Benefit Design is Not The “Standard” Drug Benefit Design is Not the Typical Part D Plan Offering in 2007the Typical Part D Plan Offering in 2007

Percent of plans:Percent of plans:

Exhibit 7

Part D and the “Doughnut Hole”Part D and the “Doughnut Hole”

Of 22.5 million Part D enrollees in 2006:Of 22.5 million Part D enrollees in 2006: 9 million9 million received low-income subsidy and face no gap in received low-income subsidy and face no gap in

coveragecoverage Less than Less than 1 million1 million enrolled in plans with full gap coverage enrolled in plans with full gap coverage An estimated An estimated 11 million Part D enrollees had no coverage11 million Part D enrollees had no coverage in in

the doughnut hole in 2006the doughnut hole in 2006 Of that total, 4 million Part D enrollees were estimated Of that total, 4 million Part D enrollees were estimated

to have spending in the doughnut holeto have spending in the doughnut hole 2 million2 million were estimated to reach catastrophic coverage level were estimated to reach catastrophic coverage level

Between 2006 and 2007, the number of PDPs that Between 2006 and 2007, the number of PDPs that cover brand-name drugs in the doughnut hole cover brand-name drugs in the doughnut hole decreased slightlydecreased slightly From 33 PDPs in 2006 to 27 PDPs in 2007From 33 PDPs in 2006 to 27 PDPs in 2007

In 11 states there are no plans available with full In 11 states there are no plans available with full coverage of brands and generics in the gapcoverage of brands and generics in the gap

Exhibit 8

Average Monthly Premiums Are Highest for Average Monthly Premiums Are Highest for PDPs Offering Full Gap CoveragePDPs Offering Full Gap Coverage

$30.17

$51.11

$93.46

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

No CoverageNo Coverage GenericsGenericsOnlyOnly

Generics and Generics and BrandsBrands

Exhibit 9

SOURCE: Hoadley et al. SOURCE: Hoadley et al. Benefit Design and Formularies of Medicare Drug Plans: A Comparison of 2006 and Benefit Design and Formularies of Medicare Drug Plans: A Comparison of 2006 and 2007 Offerings; 2007 Offerings; November 2006.November 2006.

Number of PDPs Number of PDPs

in 2007:in 2007:1,3371,337 511511 2727

HHS Estimates 90% of Medicare HHS Estimates 90% of Medicare Beneficiaries Have Drug CoverageBeneficiaries Have Drug Coverage

4.4 million10%

5.4 million13%

10.4 million24% 6.0

million14%

6.1 million14%

10.4 million 24%

NOTES: Numbers do not sum to 100% due to rounding. NOTES: Numbers do not sum to 100% due to rounding. 11 Includes coverage from Veterans Administration, Includes coverage from Veterans Administration, Indian Health Service, employer plans without retiree subsidies, and employer plans for active workers. Indian Health Service, employer plans without retiree subsidies, and employer plans for active workers. 22 Includes employer/union, FEHB, and TRICARE coverage. Includes employer/union, FEHB, and TRICARE coverage. 3 3 Approximately 0.5 million dual eligibles are Approximately 0.5 million dual eligibles are enrolled in Medicare Advantage drug plans and are reported in this category. SOURCE: HHS, June 14, 2006. enrolled in Medicare Advantage drug plans and are reported in this category. SOURCE: HHS, June 14, 2006. Data as of June 11, 2006.Data as of June 11, 2006.

Total Number of Beneficiaries = 43 MillionTotal Number of Beneficiaries = 43 Million

Total in Total in Part D Part D

Plans: 22.5 Plans: 22.5 MillionMillion(53%)(53%)

Stand-Alone Stand-Alone PDPPDP

Medicare Medicare Advantage Drug Advantage Drug

PlanPlan33

Dual Eligibles Dual Eligibles in PDPsin PDPs

Creditable Creditable Employer/UnioEmployer/Unio

n n CoverageCoverage22

No Creditable No Creditable CoverageCoverage

Other Other Creditable Creditable CoverageCoverage11

Exhibit 10

PDP MA-PD

UnitedHealthUnitedHealth

WellpointWellpoint

HumanaHumana

WellCare Health WellCare Health PlansPlans

Kaiser PermanenteKaiser Permanente

Coventry Health CareCoventry Health Care

Universal American Universal American Financial CorporationFinancial Corporation

Member HealthMember Health

Medco Health Medco Health SolutionsSolutions

5.7 5.7 millionmillion

4.4 4.4 millionmillion

1.2 1.2 millionmillion

Health NetHealth Net

Enrollment in Medicare Drug Plans Is Enrollment in Medicare Drug Plans Is Concentrated in a Few OrganizationsConcentrated in a Few Organizations

SOURCE: CMS Medicare Drug Coverage Enrollment Data, July 26, 2006. SOURCE: CMS Medicare Drug Coverage Enrollment Data, July 26, 2006.

All other parent All other parent organizations (n=216) have organizations (n=216) have

fewer than 400,000 PDP fewer than 400,000 PDP and/or MA-PD enrolleesand/or MA-PD enrollees

1.0 1.0 millionmillion

1.0 1.0 millionmillion0.8 0.8

millionmillion0.7 0.7

millionmillion0.5 0.5

millionmillion0.4 0.4

millionmillion0.4 0.4

millionmillion

3 organizations have 3 organizations have 50% of total Part D 50% of total Part D

enrollmentenrollmentof 22.5 millionof 22.5 million

Top 10 Parent Top 10 Parent Organizations:Organizations:

Exhibit 11

Variation in Costs for 2007 Among the 10 Variation in Costs for 2007 Among the 10 PDPs with the Highest EnrollmentPDPs with the Highest Enrollment

Cost Sharing by TiersPremium*

Tier 1 Tier 2 Tier 3 Specialty

AARP Medicare Rx $27.83 $6 $28 $69.10 33%

Humana Standard $15.17Standard Benefit (25%

Coinsurance)

Humana Enhanced $22.03 $5 $30 $60 25%

Wellcare Signature $23.79 $0 $57 $85 33%

Community Care Rx Basic $29.03 $0 25% 50% No Tier

UnitedHealth Rx Basic* $29.18 $7 $20 $45.75 33%

Medicare RX Rewards Value $24.72

$5 $29 No Tier 25%

Humana Complete $80.43 $5 $30 $60 25%

Silverscript $27.50 $5 $37 No Tier 25%

Prescription Pathway Bronze

$25.23 Standard Benefit (25% Coinsurance)

Exhibit 12

Note: *Marketed as Pacificare Saver in 2006. Monthly premium amount is weighted average across all Note: *Marketed as Pacificare Saver in 2006. Monthly premium amount is weighted average across all regions where plan is offered.regions where plan is offered.SOURCE: Hoadley et al. SOURCE: Hoadley et al. Benefit Design and Formularies of Medicare Drug Plans: A Comparison of 2006 and Benefit Design and Formularies of Medicare Drug Plans: A Comparison of 2006 and 2007 Offerings; 2007 Offerings; November 2006.November 2006.

Variation in 2007 Cost Sharing in Top 10 Variation in 2007 Cost Sharing in Top 10 PDPs for PDPs for

Top 10 Brand-Name DrugsTop 10 Brand-Name Drugs

Note: *indicates drugs covered by all 10 PDPs with highest 2006 enrollment.Note: *indicates drugs covered by all 10 PDPs with highest 2006 enrollment.SOURCE: Hoadley et al. SOURCE: Hoadley et al. Benefit Design and Formularies of Medicare Drug Plans: A Comparison of 2006 and Benefit Design and Formularies of Medicare Drug Plans: A Comparison of 2006 and

2007 2007 Offerings; Offerings; November 2006.November 2006.

Exhibit 13

$17.97

$12.94

$17.97

$18.47

$28.00

$15.76

$29.00

$6.44

$34.61

$19.27

$57.00

$51.32

$57.00

$45.75

$37.00

$57.00

$85.00

$26.55

$69.10

$69.10

$87.81

$170.24

$168.85

$109.41

$0 $20 $40 $60 $80 $100 $120 $140 $160

Actonel*(Median=$28.50)

Diovan*(Median=$28.50)

Fosamax*(Median=$28.50)

Lipitor(Median=$29.50)

Nexium(Median=$33.91)

Norvasc*(Median=$29.50)

Plavix*(Median=$31.89)

Toprol XL*(Median=$25.76)

Zocor(Median=$153.42)

Zoloft (Median=$64.55)

Minimum Cost Sharing

Maximum Covered Cost Sharing

Maximum Uncovered Cost

Choice Matters – Even for Healthy SeniorsChoice Matters – Even for Healthy Seniors

ESTHERESTHER

Esther would pay between $577 and $1,309 per year

in a PDP, and between $300 and $970 in an MA-PD

plan, including premiums,

depending on the plan she chooses.

Esther is 67 and Esther is 67 and lives in lives in Bethesda.Bethesda.She takes only She takes only one one drug, Fosamax, drug, Fosamax, for osteoporosis.for osteoporosis.

CAROLYNCAROLYNCarolyn, age 60, on Carolyn, age 60, on SSDI and is about to go SSDI and is about to go on Medicare. She has on Medicare. She has rheumatoid arthritis rheumatoid arthritis and and other chronic other chronic conditions conditions and takes 8 and takes 8 medications.medications. The difference between her most The difference between her most and least expensive plan option is and least expensive plan option is at least at least $3,000 – greater for PDPs$3,000 – greater for PDPs

Carolyn would pay between $4,423 and $11,522 per year

in a PDP, and between $4,608 and $7,973 in an MA-

PD plan, including premiums,

depending on the plan she chooses.

The difference between her most The difference between her most and least expensive plan option is and least expensive plan option is roughly roughly $700 for either PDP or MA-$700 for either PDP or MA-PDPD

Exhibit 14

Only a third of surveyed seniors say there are Only a third of surveyed seniors say there are important differences among Part D Plansimportant differences among Part D Plans

ASKED OF SENIORS ONLY: ASKED OF SENIORS ONLY: Would you say there are important differences among the Medicare drug Would you say there are important differences among the Medicare drug

plans now available, or do you think they are all basically the same?plans now available, or do you think they are all basically the same?

SOURCE: KFF/HSPH SOURCE: KFF/HSPH The Public’s Health Care Agenda for the New Congress and Presidential Campaign The Public’s Health Care Agenda for the New Congress and Presidential Campaign ((conducted Nov 9-19, 2006)conducted Nov 9-19, 2006)

24%

35%41%

Don’t know/ Don’t know/ RefusedRefused

They are They are basically the basically the

samesame

Important Important differencesdifferences

Exhibit 15

Part D Plan Enrollment Decisions in Part D Plan Enrollment Decisions in 20062006

Contrary to conventional wisdom, beneficiaries did not Contrary to conventional wisdom, beneficiaries did not report conducting extensive research before choosing a report conducting extensive research before choosing a Medicare drug plan Medicare drug plan

Many relied on “trusted sources” including pharmacists, Many relied on “trusted sources” including pharmacists, family members, and friendsfamily members, and friends

Most beneficiaries did not use resources provided by Most beneficiaries did not use resources provided by Medicare to help choose a planMedicare to help choose a plan Only 10% of beneficiaries said they or a family member Only 10% of beneficiaries said they or a family member

used Medicare.govused Medicare.gov

Name recognition and prior experience with the Name recognition and prior experience with the company were key factors for many in selecting a Part D company were key factors for many in selecting a Part D plan, possibly “trumping” other considerationsplan, possibly “trumping” other considerations

Exhibit 16

25%

32% 31%28%

23%

30%

55%

47% 45% 44% 42%

34%

50%45% 46%

42%

32%

21%

27%24%24%

17%

34%

30%

37%

0%

10%

20%

30%

40%

50%

60%

70%

Feb-04*

Apr-04*

Jun-04*

Oct-04*

Dec-04*

Apr-05

Aug-05

Oct-05

Dec-05

Feb-06

Apr-06

Jun-06

Nov-06

Favorable

Unfavorable

Trends in Seniors’ Impressions of Drug Benefit

*Question prior to Apr-05 referred to “new Medicare prescription drug *Question prior to Apr-05 referred to “new Medicare prescription drug lawlaw”. ”. Note: The increase in the percent saying “favorable” is statistically significant between Jun-06 and Nov-06.Note: The increase in the percent saying “favorable” is statistically significant between Jun-06 and Nov-06.SOURCE: Kaiser Family Foundation surveysSOURCE: Kaiser Family Foundation surveys..

AMONG SENIORS:AMONG SENIORS:

Given what you know about it, in general, do you have a favorable or Given what you know about it, in general, do you have a favorable or unfavorable impression of the new Medicare drug benefit?unfavorable impression of the new Medicare drug benefit?

Exhibit 17

Many Part D Plan Enrollees Say They Are Many Part D Plan Enrollees Say They Are Satisfied and Saving MoneySatisfied and Saving Money

All in all, have your All in all, have your experiences using your new experiences using your new Medicare drug plan been:Medicare drug plan been:

Compared to what you paid for Compared to what you paid for prescriptions last year, are you prescriptions last year, are you now saving money, paying more now saving money, paying more

or paying about the same or paying about the same overall? overall?

Don’t know/ Don’t know/ refusedrefused

Very Very positivepositive

SomewhaSomewhat positivet positive

SomewhaSomewhat t

negativenegativeVery Very

negativnegativee

Don’t Don’t knowknow

Saving Saving moneymoney

Paying Paying about about

the the samesame

Paying Paying moremore

46%30%

12%

7%5%

4%

14%52%

31%

Exhibit 18

AMONG SENIORS WHO SAY THEY ARE ENROLLED IN A MEDICARE PRESCRIPTION DRUG AMONG SENIORS WHO SAY THEY ARE ENROLLED IN A MEDICARE PRESCRIPTION DRUG PLAN:PLAN:

SOURCE: KFF/HSPH SOURCE: KFF/HSPH The Public’s Health Care Agenda for the New Congress and Presidential CampaignThe Public’s Health Care Agenda for the New Congress and Presidential Campaign (conducted Nov 9-19, 2006)(conducted Nov 9-19, 2006)

Yet Many Seniors Report Problems Related Yet Many Seniors Report Problems Related to Getting Prescriptions Under Their Part D to Getting Prescriptions Under Their Part D

PlanPlan

Exhibit 19

AMONG SENIORS WHO SAY THEY ARE ENROLLED IN A MEDICARE PRESCRIPTION DRUG PLAN:

12%

6%

6%

11%

6%

6%

Have you had Have you had administrative administrative problemsproblems, such as problems getting , such as problems getting

enrollment cards, problems with enrollment cards, problems with premium payments, or billing premium payments, or billing

mistakes associated with your mistakes associated with your Medicare plan, or not?Medicare plan, or not?

Have you had any Have you had any problems problems getting your Rx drugsgetting your Rx drugs, such as , such as

drugs not being covered by drugs not being covered by your plan or being unable to your plan or being unable to

afford the cost of drugs under afford the cost of drugs under your plan, or not?your plan, or not?

Yes, had a MINOR problem

Yes, had a MAJOR

problem

Have had either type of Have had either type of problemproblem

12%12%

12%12%

23%23%

SOURCE: KFF/HSPH SOURCE: KFF/HSPH The Public’s Health Care Agenda for the New Congress and Presidential CampaignThe Public’s Health Care Agenda for the New Congress and Presidential Campaign (conducted Nov 9-19, 2006)(conducted Nov 9-19, 2006)

Problems Filling Prescriptions by Number of Problems Filling Prescriptions by Number of Prescriptions and by IncomePrescriptions and by Income

≤ ≤ 3 Rx3 Rx dailydaily

SOURCE: Kaiser Family Foundation SOURCE: Kaiser Family Foundation Health Poll Report SurveyHealth Poll Report Survey (conducted June 8-18, 2006) (conducted June 8-18, 2006)

≥ ≥ 6 Rx6 Rxdailydaily

Percent who report having problems Percent who report having problems related to getting prescriptions by related to getting prescriptions by the number of prescriptions taken the number of prescriptions taken

daily…daily…

4 or 5 4 or 5 Rx dailyRx daily

Percent who report having problems Percent who report having problems related to getting prescriptions by related to getting prescriptions by

2005 income…2005 income…

12%18%

29%15%

16%

17%

15%

15%

18%

26%

Income Income > 20K> 20K

Income Income ≤ 20K≤ 20K

AMONG SENIORS WHO HAVE USED THEIR MEDICARE DRUG PLAN:AMONG SENIORS WHO HAVE USED THEIR MEDICARE DRUG PLAN:

Minor Minor Problems Problems ReportedReported

Major Major Problems Problems ReportedReported

27%27%

34%34%

46%46% 41%41%

33%33%

Exhibit 20

22% 58%

12%16% 63%

10%

How well would you say the new Medicare drug benefit works for How well would you say the new Medicare drug benefit works for your customers in each of the following areas…your customers in each of the following areas…

Very Very wellwell

Not well Not well at allat all

SomewhaSomewhat wellt well

Lowering Lowering their out-of-their out-of-pocket costspocket costs

Not Not too too wellwell

Getting them Getting them access to the access to the prescription prescription

drugs they needdrugs they need

SOURCE: Kaiser Family Foundation SOURCE: Kaiser Family Foundation National Survey of PharmacistsNational Survey of Pharmacists (conducted April 21-June 27, 2006) (conducted April 21-June 27, 2006)

Most Pharmacists Say Benefit Works Most Pharmacists Say Benefit Works Well for Their CustomersWell for Their Customers

Exhibit 21

3%3%

4%4%

44%17%

18%

19%

Yet nearly one in five pharmacists say Yet nearly one in five pharmacists say mostmost of their of their Medicare customers have had problems with their drug Medicare customers have had problems with their drug

planplan

SOURCE: Kaiser Family Foundation SOURCE: Kaiser Family Foundation National Survey of PharmacistsNational Survey of Pharmacists (conducted April 21-June 27, 2006) (conducted April 21-June 27, 2006)

To the best of your knowledge, have any of your Medicare customers To the best of your knowledge, have any of your Medicare customers experienced problems experienced problems getting their prescriptions filled getting their prescriptions filled since joining a new since joining a new

Medicare drug plan? Medicare drug plan? IF YES: Would you say most, some or just a few of your customers who IF YES: Would you say most, some or just a few of your customers who

joined Medicare drug plans have had problems filling prescriptions?joined Medicare drug plans have had problems filling prescriptions?

Most

None

Some

Just a few

Exhibit 22

67%

66%

58%

49%

Had to pay out-of-pocket for their Had to pay out-of-pocket for their prescription because pharmacist prescription because pharmacist

couldn’t verify their enrollmentcouldn’t verify their enrollment

Had problems getting enrollment Had problems getting enrollment cards or letters of enrollment cards or letters of enrollment

after signing up for a planafter signing up for a plan

Left the pharmacy without their Left the pharmacy without their prescription because the drug prescription because the drug

wasn’t on their plan’s formularywasn’t on their plan’s formulary

Left the pharmacy without their Left the pharmacy without their prescription because they prescription because they

couldn’t afford the copaymentcouldn’t afford the copayment

Specific Problems Reported by PharmacistsSpecific Problems Reported by Pharmacists

Percent of pharmacists who say any of their customers have experienced the Percent of pharmacists who say any of their customers have experienced the following specific problems filling prescriptions since joining a Medicare drug following specific problems filling prescriptions since joining a Medicare drug

plan…plan…

SOURCE: Kaiser Family Foundation SOURCE: Kaiser Family Foundation National Survey of PharmacistsNational Survey of Pharmacists (conducted April 21-June 27, 2006) (conducted April 21-June 27, 2006)

Exhibit 23

8% 41%

24%8% 43%

25%

7%

5%

19%

21%

About half of surveyed doctors say the About half of surveyed doctors say the Medicare drug benefit works well for their Medicare drug benefit works well for their

patientspatientsAmong the 78% of doctors who say at least a few of their patients are Among the 78% of doctors who say at least a few of their patients are enrolled in Medicare drug plans: How well would you say the new enrolled in Medicare drug plans: How well would you say the new

Medicare drug benefit works for your patients in each of the Medicare drug benefit works for your patients in each of the following areas…following areas…

Very Very wellwell

Not Not well at well at allall

Somewhat Somewhat wellwell

Lowering Lowering their out-of-their out-of-pocket costspocket costs

Not too Not too wellwell

Getting them Getting them access to the access to the prescription prescription

drugs they needdrugs they need

Don’t Don’t know/ know/ RefusedRefused

SOURCE: Kaiser Family Foundation SOURCE: Kaiser Family Foundation National Survey of Physicians National Survey of Physicians (conducted April 25-July 8, 2006)(conducted April 25-July 8, 2006)

Exhibit 24

37%

15%

8%

59%33%

7%

No

Don’t Don’t know/ know/

RefusedRefused

Among the 78% of doctors who say at least a few of their patients are Among the 78% of doctors who say at least a few of their patients are enrolled in Medicare drug plans…enrolled in Medicare drug plans…

SOURCE: Kaiser Family Foundation SOURCE: Kaiser Family Foundation National Survey of Physicians National Survey of Physicians (conducted April 25-July 8, 2006)(conducted April 25-July 8, 2006)

To the best of your knowledge, have any To the best of your knowledge, have any of your Medicare patients experienced of your Medicare patients experienced

problems getting their prescriptions filled problems getting their prescriptions filled since joining a new Medicare drug plan, since joining a new Medicare drug plan,

or not?or not?

Yes

Would you say that most, Would you say that most, some, or just a few of your some, or just a few of your

patients who joined Medicare patients who joined Medicare drug plans have had problems drug plans have had problems

filling prescriptions?filling prescriptions?

SomeSome

Just a fewJust a few

MostMost

Yet most doctors say at least some of their Yet most doctors say at least some of their Medicare patients experienced problems in their Medicare patients experienced problems in their

drug plandrug plan

Exhibit 25

6%2%

92%

9%

91%

Seniors, Pharmacists, and Doctors Agree: Medicare Drug Benefit is Too Complicated

Percent who agree or disagree that the Medicare prescription drug benefit is too Percent who agree or disagree that the Medicare prescription drug benefit is too complicatedcomplicated

SOURCES: KFF/HSPH SOURCES: KFF/HSPH The Public’s Health Care Agenda for the New Congress and Presidential Campaign The Public’s Health Care Agenda for the New Congress and Presidential Campaign ((conducted Nov 9-19, 2006); Kaiser Family Foundation conducted Nov 9-19, 2006); Kaiser Family Foundation National Survey of PharmacistsNational Survey of Pharmacists (conducted April 21- (conducted April 21-June 27, 2006); Kaiser Family Foundation June 27, 2006); Kaiser Family Foundation National Survey of Physicians National Survey of Physicians (conducted April 25-July 8, 2006)(conducted April 25-July 8, 2006)

Ages 65 and Ages 65 and overover

PharmacistsPharmacists DoctorsDoctors

20%7%

73%

AgreeAgree DisagreeDisagree Don’t know/RefusedDon’t know/Refused

Exhibit 26

Which statement better reflects your opinion?Which statement better reflects your opinion?

9%

60%

31%

Statement A: Statement A: Medicare should offer Medicare should offer

seniors dozens of plans seniors dozens of plans so they can select their so they can select their

ownown

Statement B: Statement B: Medicare should select a Medicare should select a

handful of plans that meet handful of plans that meet certain standards, so certain standards, so

seniors have an easier time seniors have an easier time choosingchoosing

Don’t Don’t know/ know/

RefusedRefused

Support for Limiting Plan Choice

ASKED OF SENIORS ONLY:

SOURCE: KFF/HSPH SOURCE: KFF/HSPH The Public’s Health Care Agenda for the New Congress and Presidential Campaign The Public’s Health Care Agenda for the New Congress and Presidential Campaign ((conducted Nov 9-19, 2006)conducted Nov 9-19, 2006)

Exhibit 27

Message to Congress About Medicare Part D

AMONG SENIORS:Overall, what message would you send to policymakers in Washington

regarding the new Medicare drug benefit?

Is working well and no real Is working well and no real changes are neededchanges are needed

Is not working well and Is not working well and should be repealedshould be repealed

Is not working well and Is not working well and needs major changesneeds major changes

Could be improved with Could be improved with some minor changessome minor changes 41%

28%

12% 10%

Note: “Don’t know/refused” responses not shownNote: “Don’t know/refused” responses not shownSOURCE: KFF/HSPH SOURCE: KFF/HSPH The Public’s Health Care Agenda for the New Congress and Presidential Campaign The Public’s Health Care Agenda for the New Congress and Presidential Campaign ((conducted Nov 9-19, 2006)conducted Nov 9-19, 2006)

Exhibit 28

Cut the program back because it is Cut the program back because it is costing the government too much costing the government too much

moneymoney

Proposals to Change Medicare Part D

SomewhaSomewhat favort favor

Strongly Strongly favorfavor

Percent of seniors who favor Percent of seniors who favor each of the following proposals:each of the following proposals:

Source: KFF/HSPH Source: KFF/HSPH The Public’s Health Care Agenda for the New Congress and Presidential Campaign (The Public’s Health Care Agenda for the New Congress and Presidential Campaign (conducted conducted Nov 9-19, 2006)Nov 9-19, 2006)

13%

11%

46%

45%

44%

58%

67%

12%

15%

19%

21%

24%

18%

14%Allow government to negotiate with drug Allow government to negotiate with drug

companies for lower pricescompanies for lower prices

Waive the penalty for late enrollmentWaive the penalty for late enrollment

Reduce the number of available Reduce the number of available drug plansdrug plans

Keeping the program exactly as Keeping the program exactly as it isit is

Spend more federal money to get Spend more federal money to get rid of doughnut holerid of doughnut hole

Allow seniors to get drug plan Allow seniors to get drug plan directly from Medicaredirectly from Medicare

81%81%

76%76%

68%68%

66%66%

65%65%

26%26%

25%25%

Exhibit 29

Nationwide, 1 in 4 beneficiaries estimated to be Nationwide, 1 in 4 beneficiaries estimated to be eligible for Part D low-income subsidies are not eligible for Part D low-income subsidies are not

receiving themreceiving themBeneficiaries Eligible for Low-Income Subsidies (LIS) = 13.2 million

2.0 million (15%) Eligible by SSA and receiving subsidy

0.5 million (4%)0.5 million (4%)Eligible but Eligible but estimated estimated

to have creditable to have creditable coveragecoverage

SOURCE: Testimony of Mark McClellan, CMS Administrator, June 14, 2006. Data from CMS, as of June 11, SOURCE: Testimony of Mark McClellan, CMS Administrator, June 14, 2006. Data from CMS, as of June 11, 2006, and updated LIS eligibility determinations from SSA, as of July 14, 2006.2006, and updated LIS eligibility determinations from SSA, as of July 14, 2006.

3.1 million (24%)

NOT receiving subsidy

7.5 million (57%)Full/partial

dual eligibles and SSI recipients

receiving subsidy

0.1 million (1%) 0.1 million (1%) Anticipated Anticipated facilitated facilitated enrollmentenrollment

Total = 5.7 Total = 5.7 Million Million

Non-Duals Non-Duals Eligible for Eligible for

LISLIS

Exhibit 30

Part DPart D Successes and Challenges to Successes and Challenges to DateDate

Exhibit 31

According to HHS, 90% of all Medicare beneficiaries now have According to HHS, 90% of all Medicare beneficiaries now have “creditable” drug coverage – including over 23 million in Part D “creditable” drug coverage – including over 23 million in Part D plansplans

Plan participation was greater than expected in 2006, and the Plan participation was greater than expected in 2006, and the market expanded in 2007market expanded in 2007

Initial implementation problems were overcome, and not repeated Initial implementation problems were overcome, and not repeated on a large scale in 2007on a large scale in 2007

Most enrollees say they are satisfied with their plans so farMost enrollees say they are satisfied with their plans so far

HOWEVER…HOWEVER… Some beneficiaries still lack drug coverage and could face late Some beneficiaries still lack drug coverage and could face late

enrollment penaltyenrollment penalty Plans vary greatly in terms of coverage and benefit designPlans vary greatly in terms of coverage and benefit design

Unknown how well beneficiaries can choose a plan that meets their individual needs Unknown how well beneficiaries can choose a plan that meets their individual needs with so many choiceswith so many choices

Difficulty getting “extra help” to those with low incomesDifficulty getting “extra help” to those with low incomes LIS participation lower than projected; outreach difficultLIS participation lower than projected; outreach difficult Asset test excludes many with low incomesAsset test excludes many with low incomes

Even with drug coverage, many enrollees could face high costsEven with drug coverage, many enrollees could face high costs No coverage in the “doughnut hole”No coverage in the “doughnut hole” High cost sharing for specialty drugsHigh cost sharing for specialty drugs

Questions aQuestions and Unknowns nd Unknowns about Part about Part DD

Enrollment and Plan ParticipationEnrollment and Plan Participation Which plans will stick around over time? What will happen to other sources of Which plans will stick around over time? What will happen to other sources of

coverage, especially retiree plans? Do beneficiaries understand changes to coverage, especially retiree plans? Do beneficiaries understand changes to their coverage? How do beneficiaries react?their coverage? How do beneficiaries react?

Variations Across Drug Plans and FormulariesVariations Across Drug Plans and Formularies What are the implications of these variations for patients, especially those with What are the implications of these variations for patients, especially those with

chronic and/or rare conditions?chronic and/or rare conditions? Experiences in the Doughnut HoleExperiences in the Doughnut Hole

How many people will be affected each year? What will their experiences be? How many people will be affected each year? What will their experiences be? Does utilization change?Does utilization change?

Exceptions and Appeals ProcessesExceptions and Appeals Processes How many enrollees are affected? How do these processes work for enrollees?How many enrollees are affected? How do these processes work for enrollees?

Outreach to the UnenrolledOutreach to the Unenrolled What more can be done to get low-income subsides to those who are eligible What more can be done to get low-income subsides to those who are eligible

but not receiving them? What happens to beneficiaries whose LIS status but not receiving them? What happens to beneficiaries whose LIS status changes? How many beneficiaries will end up paying the late enrollment changes? How many beneficiaries will end up paying the late enrollment penalty?penalty?

Future Directions for Part DFuture Directions for Part D How will the benefit and the program evolve over time? What are the How will the benefit and the program evolve over time? What are the

prospects for possible reforms, such as drug price negotiation, simplification?prospects for possible reforms, such as drug price negotiation, simplification?

Exhibit 32

……thank you. thank you. Any questions? Any questions?