Onerous Ownership: On Your Own in Bushs Ownership Society

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Onerous OwnershipOn Your Own in Bushs
Ownership Society

• Saving Medicare from its Enemies
• Diane Archer
• Medicare Rights Center
• Physicians for a National Health Program
• January 25, 2005

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Todays Talk

• Debunking the Medicare Privatization Myth
• Part D A Privatization Train Wreck Waiting to
  Happen
• What to Do? A Few Ideas For Empowering Folks

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Medicare-less Myth 1

• Myth HMOs, PPOs and other private plans can best
  meet the needs of older adults and people with
  disabilities.
• Reality Medicare is a public-private partnership
  that addresses the needs of people with costly
  and complex conditions. Private insurers shy
  away from high risk groups, such as seniors and
  people with disabilities, because they are
  costly. Thats why Medicare was created in the
  first place.
• Securing health insurance is a problem for many
  people ages 55 to 64. Nearly 3.5 million
  Americans ages 55 to 64 are uninsured Of these
  uninsured adults, over 1.5 million have a chronic
  condition.

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Medi-careless Myth 2

• Myth Private plans are more efficient and
  cost-effective in delivering care.
• Reality In 2002, the administrative costs of
  government Medicare were projected at 2 to 3,
  while those of HMOs were projected at 15.
• Private plans offer little in the way of cost
  containment. Comparing growth in per-enrollee
  payments for comparable services by private plans
  and Medicare, studies have also shown that
  private plans are less successful in controlling
  costs than Medicare whereas Medicare
  per-enrollee spending grew by 9.6 percent a year
  from 1970 to 2000, private plan per-enrollee
  spending grew by 11.1 percent a year.

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Medicareless Myth 3

• Myth Private health plans coordinate care better
  than Medicare.
• Reality Issue is how best to coordinate care and
  meet the needs of people with complex conditions.
  Private health plans have little incentive to
  compete for members with costly health care needs
  or to promote programs for people with complex
  conditions.
• Backdoor cherry-picking hidden costs for
  consumers for costly services and procedures
  (chemotherapy, medical equipment and hospital
  stays)

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Medicareless Myth 4

• Myth One size health plan cannot fit all.
• Reality Medicare does fit all and helps to
  ensure that people get the care they need when
  they need it. Forcing people to choose among
  different types and levels of health care
  coverage means expecting them to play Russian
  Roulette with their health care.

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Part D Medicareless In ActionThe Big Questions

• Is it another bait and switch? The Medicare
  spending trigger
• Requires Congress to step in and cap Medicare
  spending if costs reach certain threshold
• Means that more health care costs will shift to
  people with Medicare, either through higher
  premiums or fewer benefits
• Are the Medicare Advantage plan options a
  long-term solution?
• May offer less costly health care for people who
  are willing to accept limited access to doctors
  and hospitals and are relatively healthy
• Congress will likely cut payments to these plans
  over time likely leading these plans to cut
  benefits, raise premiums or pull out of Medicare
  altogether. What then?
• Is this the way to help ensure people get their
  drugs?
• Haircuts and private stand-alone drug plans
• What happens to drug coverage people already
  have?

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Drug Benefit May Be All Sizzle

• Choice of plans likely to be limited
• Formulary is likely to be less generous than EPIC
  and Medicaid
• Out-of-pocket costs will be substantial
• Limited consumer protections
• People with low incomes likely to be worse off
• Enrollment automatic for people with Medicaid
• Enrollment for Medicare Savings Program
• Outreach and education

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Reading Tea LeavesRx Plan Options

• Rx plans likely to be relatively
  indistinguishable except for pharmacy networks
• Rx plans not likely to cover many of the most
  commonly used brand name/high-cost drugs
• Model formulary (USP) does not require coverage
  of most brand name drugs
• Rx plans may change formularies after first 30
  days with notice
• Rx plans likely to be costly

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FormularyThe Rug May Be Pulled Out From Under

• Hard to know what you are getting.
• Private drug plans allowed to
• set their formularies, drug prices and cost
  sharing with minimal oversight from Medicare
• change their cost sharing, pharmacy networks and
  formularies mid-year
• limit number of prescriptions that can be filled
  in a given time and use other tools to control
  costs
• require burdensome prior authorization for
  certain drugs that will discourage doctors from
  prescribing them.

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Premium
Huge Premium Variation Among States
40
70
70
34
75
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Questions about Cost for New Yorkers with
Medicare

• How much will I pay in premiums?
• Will I save even 50 on my drugs?
• Which of my drugs will be covered?
• Will I have to pay for benzodiazepines and
  barbiturates myself since they are never covered?
  
• What happens to EPIC?
• Am I better off getting my drugs from Canada?

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Consumer Protections Rx Issues

• You have enrolled in a drug plan and
• You are locked in for a year
• Even if it stops covering drugs you need
• You have only limited appeal rights
• Plans given sole authority to grant exception to
  their formulary
• You may not have any Rx coverage if you need to
  spend time out of your area caring for your
  sister
• No exceptions for urgent or emergency situations
• You may no longer have coverage for certain drugs
  EPIC once covered since EPIC is not required to
  help offset costs of drugs in that plans
  formulary.
• You may spend more for your drugs than today

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Enrollment General Issues

• Lack of pre-enrollment information
• Plans not required to make information on each
  drugs cost- sharing and prior authorization
  policies accessible.
• Difficult to compare options
• Because plans can create actuarially equivalent
  benefit packages, people will be forced to
  compare plans that cover different drugs, have
  different cost-sharing arrangements, have
  different premiums. Choosing the best drug plan
  will be virtually impossible.
• Late-enrollment penalties
• People who do not have creditable coverage and
  delay enrollment will face a hefty
  late-enrollment penalty for the rest of their
  life.

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Low-Income Issues

• Enrollment
• The triple hurdle
• Low-income subsidy
• Choice of plan
• Accessing coverage
• Lessons learned from Medicare Savings Programs
• Consumer Education Choices no one should have to
  make

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Enrollment Dual EligiblesCan It Work in 45 Days?

• Low-income Subsidy
• How can it work and how will it work?
• Will people with Medicare and Medicaid be
  enrolled in a plan by January 2006, when Medicaid
  coverage ends?
• What happens if they are enrolled but do not know
  which plan they are auto-enrolled in?
• What about people in Medicare Savings Programs?
• Premium penalties for late enrollment?

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Enrollment Lessons Learned from MSPs

• One-third of eligible persons are
• enrolled in a Medicare Saving
• Programs (MSP) after 15 years.
• To boost enrollment in Rx low
• income subsidy program
• CMS should minimize documentation requirements
  and simplify income and asset tests,
• CMS should create unified application to make
  sure people eligible for MSP and Part D Low
  Income Subsidy (LIS) access all benefits they are
  entitled to.
• CMS should auto-enroll people with MSPs into LIS
  enrollment in an MSP should ensure eligibility
  for the LIS.

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Consumer Education Issues

• Drugs or Housing? Unclear how enrollment in Part
  D low-income benefit will affect eligibility for
  other assistance and subsidy programs (housing,
  food stamps), but it appears that subsidy will
  count as income.
• Which Drug Plan? If auto-assigned randomly into
  an Rx plan, how will people with Medicaid know
  which plan they are in and which pharmacy
  networks they can use?
• How to Get Help? Many individuals with Medicare,
  especially those with limited education, limited
  English proficiency, or physical or cognitive
  impairments, need personalized assistance to
  complete the enrollment process. Current funding
  for State Health Insurance Assistance Programs
  (SHIPs) and community-based organizations is
  woefully lacking.

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What to do? A few ideas for empowering folks

• Create forums for patients to discuss health care
  issues
• Urge people to write to reps in Congress
• Use the media to shift discussion from to
  humans urge people to talk to the press, write
  letters to the editor of their local papers

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How Do I Stay Informed?

• Free MRC e-newsletters, sign up at
  www.medicarerights.org
• Medicare Interactive (MI) web tool
• Visit www.medicareinteractive.org/aarp to
  experience MRCs state-of-the art counseling and
  information tool. MI has the most up-to-date
  information on
• Medicare benefits, rights and options, including
  drug discount cards and Part D
• how state programs coordinate with Medicare.