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Strengthening Medicare Part D

Strengthening Medicare Part D. John Rother Director Policy & Strategy AARP. Washington, DC November 5, 2007. AARP Goals for 2003 Conference Committee. Do no harm –protect underlying Medicare fee-for-service program Get Rx coverage for all 65+ now without it

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Strengthening Medicare Part D

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  1. StrengtheningMedicare Part D John Rother Director Policy & Strategy AARP Washington, DC November 5, 2007

  2. AARP Goals for 2003 Conference Committee • Do no harm –protect underlying Medicare fee-for-service program • Get Rx coverage for all 65+ now without it • Provide generous support to low-income beneficiaries • Prevent erosion of employer-based retiree health plans • Contain pharmaceutical prices effectively

  3. 2. Rx coverage for 65+ Millions more 65+ are covered Source: Unpublished preliminary research: H. Levy & D. Weir, Univ. of Michigan, “Take-Up of Medicare Part D and the SSA Subsidy: Early Results from the Health and Retirement Study,” Presented Aug 2007 at the Retirement Research Consortium Annual Joint Conference, Washington, DC

  4. Current Part D Enrollment 24 Million Source: HHS, January 30, 2007

  5. 3. Generous Support for Limited-Income Enrollees What’s Part D coverage worth? CMS 2007 Estimates Average worth per person • $3,353 in 2007 for a low-income enrollee August 2007 Press Release • $1,200 for a mid-income enrollee June 2007 Press Release .

  6. Number of eligibles not enrolled in LIS • CMS estimated 14.4 million would enroll, yet only 9 million so far • Also, there are those who would qualify but for the asset limits --- estimated by KFF at 2.3 million

  7. Why people fail to enroll: • Lack of knowledge -Nearly half of LIS eligibles not enrolled reported they were “not aware” of program (2006 National Survey of Seniors and Rx Drugs- KFF) • Welfare stigma from required place of enrollment and asset test • Don’t want or know how to answer asset questions at enrollment i.e. burial plots, life insurance, in kind support

  8. Targeting: Key strategies for face-to-face enrollment • Need IRS to share income data with SSA • Need funding for outreach and enrollment at community level

  9. 5. Reduce the Rise in Rx Drug Prices Rx Drug cost-containment measures • Rely heavily on formularies • Works for most enrollees, but LIS enrollees exempt • Duals will be forced into most restricted plans next year • Need comparative-effectiveness studies to assure most effective drugs are available

  10. Friction Points • Marketing abuses • Problems with appeals, since many plans give people no info at the pharmacy when refusing to cover a drug • LIS reassignments: real problem being inclusion of MA plans in benchmark • Inaccurate and misleading data on Medicare plan finder • Too many choices! Standardization and simplification needed

  11. Immediate Steps to Strengthen Part D Strengthen limited-income protections • Substantially raise or eliminate asset test • Simplify LIS application • Permit enrollment in MSP at SSA offices • Bring Medicare Savings Program to LIS level • Change formula to avoid "ping-ponging“ of LIS enrollees each year

  12. Immediate Steps to Strengthen Part D Quality and Cost Improvements • More aggressive oversight of plan performance • Substantially fund comparative-effectiveness research • Require physicians to E-Prescribe

  13. StrengtheningMedicare Part D Washington, DC November 5, 2007

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