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

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Presentation on theme: "Strengthening Medicare Part D John Rother Director Policy & Strategy AARP Washington, DC November 5, 2007."— Presentation transcript:

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

2 AARP Goals for 2003 Conference Committee 1. Do no harm –protect underlying Medicare fee-for-service program 2. Get Rx coverage for all 65+ now without it 3. Provide generous support to low-income beneficiaries 4. Prevent erosion of employer-based retiree health plans 5. Contain pharmaceutical prices effectively

3 Millions more 65+ are covered Source: Unpublished preliminary research: H. Levy & D. Weir, Univ.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 2. Rx coverage for 65+

4 Current Part D Enrollment 24 Million Stand-Alone Rx Plans11,000,000 Medicare Advantage w/Rx Drug (Includes.5 million Duals) 6,700,000 Dual Eligibles in PDPs (Auto-enrolled) 6,300,000 Estimated Creditable Coverage =VA, Indian Health Service, employer plans w/o retiree subsidies, active workers, and state pharmaceutical assistance programs 4,900,000 Employer/Union Ret. Coverage FEHB Feds retiree coverage --includes dependents TriCare Military retirees 10,300,000 No Creditable Coverage 4,000,000 (GAO = 4.7 million) Source: HHS, January 30, 2007

5 Whats 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. 3. Generous Support for Limited-Income Enrollees

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 Dont 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 Rx 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 Drug cost-containment measures 5. Reduce the Rise in Rx Drug Prices

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 Strengthening Medicare Part D Washington, DC November 5, 2007

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