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Randy Grabiak Highmark Senior Products Medicare Part D Product Director. BCNEPA/FPH 2006 Seminar Medicare Before and After Part D April 26, 2006. Agenda. Trends in the Senior Market Part D Benefits & Guidelines Plan Participation Provider Challenges Questions. Trends in the Senior Market.

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Bcnepa fph 2006 seminar medicare before and after part d april 26 2006 l.jpg

Randy Grabiak

Highmark Senior Products

Medicare Part D Product Director

BCNEPA/FPH 2006 SeminarMedicare Before and After Part DApril 26, 2006


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Agenda

  • Trends in the Senior Market

  • Part D Benefits & Guidelines

  • Plan Participation

  • Provider Challenges

  • Questions


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Trends in the Senior Market

Seniors’ Sources of Information

AMONG SENIORS: Percent who say they would be very likely to turn to each of the following for help in deciding whether to enroll in a Medicare drug plan…

Survey March 31 – April 3, 2005

Your doctor

Your pharmacist

A Social Security office, website or phone number

Friends or family members

A Medicare mailing, website or phone number

A health insurance company

A local seniors’ group or community organization

An employer or union

49%

33%

27%

27%

23%

21%

18%

8%

33%

Medicare

Your doctor

Your pharmacist

Social Security

Friends or family members

A local seniors’ group or community organization

Medicaid

An employer or union

Survey October 13 – 31, 2005

32%

25%

24%

20%

16%

14%

9%

Source: *Kaiser Family Foundation Health Poll Report Survey (conducted Mar. 31-April 3, 2005)

**Kaiser Family Foundation/Harvard School of Public Health (conducted October 13-31, 2005)


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Trends in the Senior Market

Health Insurance Trends Prior to Part D

  • To offset the growing out-of-pocket expense, many beneficiaries have turned to various forms of private or public supplemental coverage to help defray the cost of prescription drugs

  • However, more than a third still have no prescription drug coverage

  • Lack of drug coverage can have adverse affects

Sources of Prescription Drug Coverage


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Trends in the Senior Market

Health Care Delivery and Expenditure Trends

  • Seniors are particularly vulnerable to the increased cost of prescription drugs because:

    • Drug usage increases with age

    • Prior to Part D Medicare did not cover most prescription drugs

Source: Ageworks, a division of the Ethel Percy Andrus Gerontology Center, USC


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Trends in the Senior Market

Medicare Beneficiaries’ Out-of-Pocket Prescription Drug Spending, 2000-2013

The Need for Drug Coverage

Projected:

Average annual out-of-pocket drug

costs among the Medicare population:

* Without Medicare drug benefit.

SOURCE: Actuarial Research Corporation analysis for The Kaiser Family Foundation, June 2003 and November 2004.


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Recent Trends in the Senior Market

Part D is Projected to Reduce Average Out-of-Pocket Spending but the Extent of the Reduction is Likely to Vary

All Other Part D Participants(20.3 million)

Part D Participants Who Receive Low-Income Subsidies(8.7 million)

Average Change:- 37%

SOURCE: Actuarial Research Corporation analysis for the Kaiser Family Foundation, November 2004.


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Part D Benefits & Guidelines

Decisions forBeneficiaries

Enroll in Part D Plan

Medicare Advantage

Traditional Medicare

HMO (Local)

PPO (Local v. Regional)

Private FFS

Part D Prescription Drug Plan

No Part D coverage

Apply for Low-Income Subsidy

Dual Eligibles

Social Security Office

Medicaid Office

Meet Income and Asset Test?

If yes, qualify for:

Below 150% FPL: Subsidy for premium on sliding scale, $50 deductible, 15% coinsurance to $5,100 in Rx costs, $2/generic Rx, $5/brand name Rx after $5,100

Below 100% FPL:

No premium or deductible, $1/generic Rx, $3/brand name Rx, pay nothing after $5,100 in Rx costs

Below 135% FPL: Subsidy for premium, no deductible, $2/generic Rx, $5/brand name Rx, pay nothing after $5,100 in Rx costs


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Part D Benefits & Guidelines

Medicare Prescription Drug Benefit

2006 Standard Medicare Part D Coverage


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Plan Participation

Part D Plans

To participate in the program, sponsors must offer Medicare Part D benefits to all beneficiaries in one or more of the 34 PDP regions established by CMS


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Plan Participation

Highmark’s Medicare Approved Drug Plans

To Request Additional Information, please call 1-866-465-4030


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Highmark’s Medicare Advantage Drug Plan Options

* Based on 1-34 Day supply. Copayment for 35-90 day supply (Retail) or 1-90 day supply (Mail Service) is 2.5 times 1-34 day supply.


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Part D Benefits & Guidelines

Medicare Prescription Drug Plan Cost Estimator (BlueRx Basic)

Estimated Savings Report:

Cost Breakdown:

*BlueRx Basic Plan

** Assumption: 4 generic prescriptions/month


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Part D Benefits & Guidelines

Low-Income Subsidy

  • Medicare will provide premium and cost-sharing subsidies to assist low-income beneficiaries

  • Dual eligibles will be automatically assigned to a PDP and auto-enrolled if they do not choose another plan

  • Benefit: Reduction of premium, deductible & cost-sharing

  • Process: Requires completion of SSA form

  • Eligibility:

*Excludes primary residence and automobiles


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Part D Benefits & Guidelines

Medicare’s Low Income Subsidy Benefit Design


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Part D Benefits & Guidelines

The Donut Hole’s Impact to Out of Pocket Expenses


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Part D Benefits & Guidelines

Late Enrollment Penalty

  • Medicare Part D is an entitlement but enrollment is voluntary

  • Low-income subsidy provides additional cost savings

  • Waiting to enroll until after May 15, 2006 may come at a penalty

Nov 15, 2005

May 15, 2006

January 2008

January 2007

Sign up & pay = $34.78/Month**

Sign up & pay = $32.20/Month*

Sign up & pay = $38.95/Month**

*Amount based on $32.20 national average monthly beneficiary premium (CMS, August 2005).

**Assumes national average premium does not increase annually


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National Part D Enrollment not meeting HHS Projections

  • 39.1 million beneficiaries would enroll in 2006 of which 10 million would have creditable

  • coverage under a qualified plan such as an employer or union sponsored plan.

  • 29.3 million would be enrolled in a Part D plan.

  • Additional 11.4 million will need to sign up for a stand alone or MAPD plan in order to reach the

  • 29.3 million member target.

*Projected Part D Enrollment = 29.3M

30.0

*Includes MAPD & Stand Alone PDP

17.9 million

20.0

15.8 million

14.3 million

11.6 million

6.4 mil

4.9 mil

3.6 mil

Enrolled in Stand Alone PDPs

1 mil

10.0

4.7 mil

5.1 mil

4.5 mil

4.4 mil

Enrolled in MA-PD

6.4 mil

6.2 mil

6.2 mil

6.2 mil

Dual Eligible Auto Assigned from CMS

0.0

Dec 2005

Jan 2006

Feb 2006

Mar 2006

Actual Part D Enrollment

Source: Projected: HHS, Medicare Drug Benefit Final Rule 1/28/05. Actual: HHS 12/22/05, 1/17/06 , 2/22/06, & 3/23/06


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Provider Challenges

Formulary

Covered Drugs

Statutory Exclusions

  • Antidepressants

  • Antipsychotics

  • Anticonvulsants

  • Antiretrovirals

  • Immunosuppressants

  • Antineoplastics.

  • Over the counter medications

  • Weight gain and loss drugs

  • Fertility and cosmetic/hair growth drugs

  • Drugs to relieve cold symptoms

  • Some vitamins and minerals

  • Barbiturates, and benzodiazepines

Prescription Drug Plans Must:

Assure a broad access to drugs

Require two drugs per Categories & Classes

Must comply with USP model guidelines


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Provider Challenges

Formulary

Drug coverage can differ based on how the drug is prescribed dispensed or administered to the patient

  • Inhalation DME supply drugs – solution for inhalation via nebulizer only

  • Oral Anti-cancer agents

  • Diabetic test strips & lancets

  • Influenza, pneumococcal, Hepatitis B vaccines


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Provider Challenges

Exceptions & Appeals Process

  • Plans must have a drug transition process in place to assure a seamless transition for patients

    • A 90 day period may be needed for patients taking non formulary drugs

    • For rapid transitions, beneficiaries may need to use a plan’s exceptions & appeals process

    • Establish an adequate exceptions process to help LTC residents who need non formulary drugs

    • Provide a one time temporary or emergency supply to ensure that there is no coverage gap during the exceptions process


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Provider Challenges

Medication Therapy Management

MTM programs must be designed to assure that covered medications will be used appropriately by targeted beneficiaries. A plan’s MTM services must be developed in cooperation with licensed and practicing pharmacists and physicians.

  • Optimize therapeutic outcomes

  • Improve medication use

  • Reduce risk of adverse events & interactions

  • Increase patient’s adherence & compliance with regimens


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Key Date

  • May 15, 2006 – The last day that current Medicare eligible beneficiaries can join a drug plan without paying a penalty.


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Message Points for Providers

  • Patients will ask you for advice

  • One plan does not fit all Medicare beneficiaries

  • Evaluate Drug Benefit Cost Sharing

  • Encourage patients to look into low income subsidies

  • Premium Penalty for delay in signing up

  • Advise to compare formularies and pharmacy networks

  • Know where to tell patients to turn for more information


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Where to Turn for More information:

  • Highmark

    • 1-866-465-4030

    • www.highmarkblueshield.com

  • Medicare

    • 1-800-MEDICARE

    • www.medicare.gov & www.cms.gov

    • www.medicare.gov/medicarereform/minitool.asp

  • Social Security Administration

    • 1-800-772-1213

    • www.socialsecurity.gov


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