Managed Care - December 2008 - (Page 22)

to worry about getting stuck as the low-cost plan in be set at 20 percent, or in some cases 33 percent. a region, says Stefanacci. That allows them to steer “If a plan has decided that it is going to offer an clear of low-income beneficiaries that tend to be actuarially equivalent benefit — a variation of the high-risk members. standard benefit that actuaries testified is equivaLow-income seniors’ premiums are covered by lent to the standard — the plan can charge up to 33 the government, Stefanacci notes. They pay no depercent,” Washington adds. More members, meanductible, face no doughnut hole in their benefits, while, are staring over the brink of their home and are responsible for only a $1 copayment for budgets and looking into the doughnut hole for the generic drugs and a $3 copayment for branded first time. medications — leaving very little opportunity when “A larger share of stand-alone drug plans will it comes to managing their drug costs. have a doughnut hole in 2009 than in 2008,” says “The margins on the duals are turning out to be Neuman. “In fact, 75 percent of these plans will have negative,” he adds. “Spending outpaces the revenue a gap in coverage in 2009, up from 71 percent in from that group. A plan can’t use tiering to en2008. Our recent report shows more than 3 million courage generic or preferred products since duals people with spending in the coverage gap,” she are not subject to tiering outside of a simple generic adds, “and the problem is that some people stop branded tier.” taking medications when they get there. And that Whatever the reason, some states like Arizona are could have serious consequences.” seeing a clear migration out of the low“The hole is going to eat the doughnut,” income market. says AARP’s Matheis. “Right now, we’re giv“Arizona has dropped from seven lowing people a lot of advice on how they can income plans to only two in 2009,” says Neugrapple with the doughnut hole. Some can go man. “Nevada will have just one low-income to lower-cost medications. But we would like plan available.” to see the doughnut hole addressed.” Closing While plans are exiting the arena, there are it would be expensive, she adds, but it would still millions of low-income seniors who are also provide significant relief. not getting the extra help, such as premium “There’s a whole category of people who Beneficiaries are assistance, available to them under Part D. don’t meet the asset test: People who don’t There are 9.4 million people in low-income finding that their have significant incomes or what people concosts are rising Part D plans, says Neuman, which is 3 million and that formulasider significant assets these days,” says below its full potential of 12.5 million eligi- ries are tightening, Matheis. ble persons. says Paul Precht, Meanwhile, out-of-pocket expenses for policy director of Federal Part D plan? beneficiaries in mainstream Part D plans are the Medicare Representative Henr y Waxman has Rights Center. rising. mounted a virtual crusade over Part D drug “We’re also hearing from people who are finding prices for dually eligible members, concluding in that their copayments are higher — either because some public hearings that Part D has been a $3.7 they are being shifted to a higher tier or the tier they billion windfall for drug companies, which earn are on has higher cost sharing — as well as people more for their products under the private program finding new restrictions on drugs put on formuthan they would under Medicaid. lary,” says Paul Precht, a consumer advocate and “He is estimating that the government could policy director of the Medicare Rights Center. save tens of billions of dollars if they change the rule One of the restrictions deals with the most exand require Medicaid-level pricing,” says Washingpensive drugs found on the list of specialty drugs ton. covered by a Part D plan. “There are a couple of Harvard economists that “CMS has ruled that plans can place drugs with have testified on this in the past at the Senate fimonthly costs over $600 on a specialty tier,” says nance committee,” she adds. “They have proposed Washington. What makes a specialty tier unique is that dual eligibles would remain in the Part D systhat the beneficiary doesn’t have the opportunity to tem, remain in their plan, but that similar to Medicappeal to get lower cost sharing. Cost sharing can aid, drug companies would pay a rebate to the fed- 22 MANAGED CARE / DECEMBER 2008

Table of Contents Feed for the Digital Edition of Managed Care - December 2008

Managed Care - December 2008 Editor's Memo Contents Legislation & Regulation News and Commentary Medication Management Compensation Monitor ICD-10 Offers Huge Opportunity, Challenge Part D at a Crossroads Plans Can Weather the Financial Crisis DM vs. Medical Home? Tackle Prediabetes Reasonable Approach to Morning Sickness Formulary Files Tomorrow's Medicine Outlook

Managed Care - December 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.