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The Affordability of the Medicare Drug Benefit Session 1.02 Third Annual National Medicare Congress Susan Sanabria VP Advocacy Programs National Multiple Sclerosis Society. Affordability of Medicare Rx – Four Ways to View. Value of the benefit Cash flow issues

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The Affordability of the Medicare Drug BenefitSession 1.02Third Annual National Medicare CongressSusan SanabriaVP Advocacy ProgramsNational Multiple Sclerosis Society


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Affordability of Medicare Rx –Four Ways to View

  • Value of the benefit

  • Cash flow issues

  • Relationship to income and assets

  • Availability of financial assistance


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Value of the Benefit

Value =

(coverage+avoidance of future penalty)

minus

(premium+co-payments)


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Value of the Benefit

  • Coverage against catastrophic need for high-cost drugs

  • % of coverage varies by amount of drug expenses

    • For $1000 of drugs — 21% coverage

    • For $2,250 — 50%

    • For $5,100 — 22%

    • For $16,000 MS drug — 72%

  • % of coverage varies by plan and drugs used


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    Cash Flow Issues

    • Largely function of drug costs and how fast one enters donut hole

    • Example of $24,000 for MS therapies

      • Reach donut hole ($2,250) in February

      • Then paying full cost of drugs into March, until drug costs reach $5,100

      • Big outflow of cash ($3,600 in co-pays) early in the year before reaching catastrophic coverage


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    Relationship to Income and Assets

    • If consider Medicare Rx good value and can afford — easy decision

    • If can’t afford, then must navigate confusing mélange of assistance


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    Availability of Financial Assistance

    • LIS in program

      • Low income/assets; co-pays difficult for some

      • Two levels

        • Co-pays difficult for some

        • Partial LIS often not enough for those 135-150% FPL

        • Still no help for near poor

      • Cumbersome application process through SSA

        • Requalify each year?


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    Availability of Financial Assistance

    • State Presc. Assistance Programs (SPAPS)

      • Not in every state

      • Inconsistent benefit

      • Inconsistent eligibility requirements

      • Not always available for beneficiaries under 65

      • Different application process in each state


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    Availability of Financial Assistance

    • Patient Assistance from the Pharmaceutical Companies

      • Usually for higher priced drugs/biologicals

      • Difficult and confusing for beneficiaries

      • Not great for pharmaceuticals either


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    Availability of Financial Assistance

    • Patient Assistance from the Pharmaceutical Companies

      • Variable in terms of:

        • Availability — not all companies provide assistance

        • Benefit and eligibility requirements

        • Mechanism: $ from 501(c)(3) or free drug from company

        • Application process


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    Recommendations

    • Cash Flow Problem

      • Some plans in ’07 will eliminate the donut hole

        • Affordable?

        • Good value?

        • Broad formulary?

    • Allow individual to designate monthly deduction from SS check to even out donut hole payments


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    Recommendations

    • SPAPS

      • Lobby all states to provide uniform program

      • Make available to those over and under 65

      • Standard application process, perhaps use LIS application


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    Recommendations

    • Pharmaceutical Rx Assistance

      • OIG approval for new, centralized mechanism that allows value of free drug provided to beneficiary to count against TROOP

      • Pay or play — if no assistance program, pay into a pool


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    Recommendations

    • Pharmaceutical Rx Assistance

      • Standard application form, perhaps LIS

      • Still unresolved: assistance for near poor who take moderately priced drugs