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The Centers for Medicare & Medicaid Services is the largest payer for health care in the United States. Nearly 38 million Americans rely on health care benefits through this program, 61 million when Medicare Advantage beneficiaries are included. Since taking effect in 2006, Medicare beneficiaries have had access to an outpatient prescription drug benefit through Medicare Part D. Premiums and cost-sharing amounts vary across health private plans and geographic regions. As a result, the inner workings of the Part D program can be unclear.
This briefing clarified the defining characteristics of Medicare Part D including eligibility, coverage, and benefits. Attendees learned the case for Medicare Part D redesign and the implications and tradeoffs of current policy options outlined in HR.3, HR.19, S.2543, and S.909 (such as inflation penalties) on beneficiaries and other stakeholders.
- Juliette Cubanski, Ph.D., MPP, MPH, Deputy Director, Program on Medicare Policy, Kaiser Family Foundation
- Stacie B. Dusetzina, Ph.D., Associate Professor of Health Policy, Ingram Associate Professor of Cancer Research, Vanderbilt University School of Medicine
- Leigh Purvis, MPA, Director, Health Care Costs and Access, AARP
- Sarah J. Dash, MPH, President and CEO, Alliance for Health Policy (moderator)
This event is made possible with support from Arnold Ventures.
Proposed Legislation and Its Impact
“Key Provisions of Drug Pricing Proposals.” Larosa, J., Slifer, E. Wynne Health Group. April 26, 2021. Available at http://allh.us/mFHh.
“H.R. 3 – Elija E. Cummings Lower Drug Costs Not Act.” Office of Congressman Frank Pallone. April 22, 2021. Available at http://allh.us/ejrP.
“S.909 – Prescription Drug Price Relief Act of 2021.” Office of Senator Bernard Sanders. March 23, 2021. Available at http://allh.us/e3uF.
“What’s the Latest on Prescription Drug Proposals from the Trump Administration, Congress, and the Biden Campaign.” Cubanski, J., Freed, M., Dolan, R. et all. KFF. October 6, 2020. Available at http://allh.us/xta8.
“Impact of H.R. 3 as Passed by the House on Federal Spending and Drug Manufacturer Revenues.” Cole, M., Brantley, K., Stengel, K. Avalere. June 19, 2020. Available at http://allh.us/6XKH.
“Understanding The Senate Finance Committee’s Drug Pricing Package.” Sachs, R. Health Affairs. July 26, 2019. Available at http://allh.us/9UN3.
“Comparing the Recent Drug-Pricing Reform Proposals.” Hayes, T. American Action Forum. December 10, 2019. Available at http://allh.us/tqQ7.
“H.R. 19 – Lower Costs, More Cures Act of 2019.” Office of Congressman Greg Walden. December 19, 2019. Available at http://allh.us/PJNm.
“S.2543 – Prescription Drug Pricing Reduction Act of 2019.” Office of Senator Chuck Grassley. September 25, 2019. Available at http://allh.us/qxgG.
(listed chronologically, beginning with the most recent)
“Frequently Asked Questions About Prescription Drug Pricing and Policy.” Kirchhoff, S., Bodie, A., Sekar, K. et al. Congressional Research Service. May 6, 2021. Available at http://allh.us/wycp.
“Essential Facts About Drug Pricing Reform: Medicare Part D Redesign.” Martin, K. The Commonwealth Fund. May 5, 2021. Available at http://allh.us/wh8d.
“Democrats Eye Medicare Negotiations to Lower Drug Prices.” Huetteman, E. Kaiser Health News. March 23, 2021. Available at http://allh.us/8Vaw.
“How a Medicare Part D Inflation Penalty Would Lower Drug Spending for Patients, Taxpayers, and Employers.’ Anderson-Cook, A., Love, K., Noda, A., et al. Health Affairs. February 5, 2020. Available at http://allh.us/4tgY.
“What to Know about Part D When Working Past 65.” AARP and United HealthCare Services. 2020. Available at http://allh.us/4ypq.
“Assessing Drug Price Increases in Medicare Part D and the Implications of Inflation Limits.” Cubanski, J., Neuman, T. KFF. October 18, 2019. Available at http://allh.us/hBdt.
“What Is an Inflationary Rebate, and How Can It Help Bring Down Drug Prices?” Noda, A., Miller, M. Arnold Ventures. July 22, 2019. Available at http://allh.us/bhMR.
“A Primer on Medicare: Key Facts About the Medicare Program and the People it Covers.” Cubanski, J., Swoope, C., Boccuti, C., et al. KFF. March 20, 2015. Available at http://allh.us/eUdV.
“How Medicare Works.” Blue Cross Blue Shield Blue Care Network. Available at http://allh.us/3wKD.
(listed chronologically, beginning with the most recent)
“Impacts of Part D Redesign Vary by Therapeutic Area.” Cole, M., Yip, R., Kazan, M. et al. Avalere. February 8, 2021. Available at http://allh.us/mjYq.
“A Dozen Facts About Medicare Advantage in 2020.” Freed, M., Damico, A., Neuman, T. KFF. January 13, 2021. Available at http://allh.us/JT3Q.
“International Prescription Drug Price Comparisons: Current Empirical Estimates and Comparisons with Previous Studies.” Mulcahy, A., Whaley, C., Gizaw, M. Rand Corporation. 2021. Available at http://allh.us/9kH8.
“Transparency in Coverage Final Rule Fact Sheet.” Centers for Medicare & Medicaid Services. October 29, 2020. Available at http://allh.us/P9Jr.
“Association Between the Percentage of U.S. Drug Sales Subject to Inflation Penalties and the Extent of Drug Price Increases.” Dickson, S. JAMA Network Open. September 1, 2020. Available at http://allh.us/FHCB.
“Total Number of Medicare Beneficiaries.” KFF. 2020 Available at http://allh.us/ahg9.
“Redesigning Medicare Part D to Realign Incentives.” Hayes, T. American Action Forum. August 14, 2018. Available at http://allh.us/XbpG.
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Juliette Cubanski, Ph.D., MPP, MPH
KFF, Deputy Director, Program on Medicare Policy
Sarah J. Dash, MPH
Alliance for Health Policy, President and Chief Executive Officer
Stacie Dusetzina, Ph.D.
Vanderbilt University School of Medicine, Associate Professor of Health Policy, Associate Professor of Cancer Research
Leigh Purvis, MPA
AARP, Director, Health Care Costs and Access
Experts and Analysts
Kirsten Axelsen, M.S.
American Enterprise Institute, Visiting Fellow
Kelly Brantley, MPH
Avalere, Policy Practice Director
Lovisa Gustafsson, MBA
The Commonwealth Fund, Vice President, Controlling Health Care Costs
Adam J. Fein, Ph.D.
Drug Channels Institute, Chief Executive Officer
Mark McCLellan, M.D., Ph.D.
Duke-Margolis Center for Health Policy, Robert J. Margolis Professor of Business, Medicine, and Policy and Founder
Kristi Martin, MPA
Highway 136 Consulting, President
Andrea Noda, MPP
Director of Health Care, Arnold Ventures
John Coster, Ph.D., R.Ph.
Centers for Medicare & Medicaid Services, Director, Division of Pharmacy at Center for Medicaid and CHIP Services
Andi Lipstein Fristedt, MPA
U.S. Food and Drug Administration, Deputy Commissioner for Policy, Legislation, and International Affairs
Kristin Bass, MBA
Pharmaceutical Care Management Association, Chief Policy and External Affairs Officer
Lida Etemad, Pharm.D., M.S.
United Healthcare Pharmacy, Vice President, Pharmacy Management Strategies
Mark Howell, J.D.
American Hospital Association, Senior Associate Director, Standards and Drug Policy
Patients for Affordable Drugs, President and Founder
John O’Brien, Pharm.D., MPH
National Pharmaceutical Council, President and Chief Executive Officer
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This is an unedited transcript.
Good afternoon, everyone. Thank you for joining today’s webinar on Medicare Part D Basics and Policy Options for redesign. I’m Sarah Dash, president and CEO of the Alliance for Health Policy. For those who are not familiar with the Alliance, welcome. We are a non partisan resource for the policy community dedicated to advancing knowledge and understanding of health policy issues.
The Alliance for Health Policy, gratefully acknowledges Arnold Ventures for supporting today’s webinar.
And now, I’m pleased to turn this over to Andrea Noda, director of Health Care at Arnold Ventures for brief opening remarks before we get started. Andrea?
Thank you, Sarah. I’d like to thank the Alliance for Health Policy Staff for their work on today’s event, and thank you all for taking the time to join today.
As Sarah mentioned, I’m a director on the healthcare team at Arnold Ventures or philanthropy dedicated to tackling some of the nation’s toughest problems with evidence based policy solutions.
The philanthropy worked on many important issues, including criminal justice reform, higher education and health care.
We support research to develop evidence based state and federal policies and drive policy change through public education, technical assistance, and advocacy.
Health care team aims to improve health care delivery, lower cost to patients and taxpayers, and reduce disparities in access.
Or drug pricing work, supports research into key drivers of high drug prices and spending.
This includes patent abuses and anti competitive behaviors, market distortions, high launch prices and unjustified price increases.
Medicare Part D cuts across many of these areas we focus on in our drug pricing work.
I’m excited to hand it back to Sarah and to today’s speakers who will help us understand the complexity of Medicare Part D and why reforms to the program are a critical component of the current drug pricing debate.
Thank you, Sarah.
Great, Thanks, Andrea. All right, we’re going to go over some very quick housekeeping items and then introduce our motto. Our panelists.
Want to remind everybody that you can join today’s conversation on Twitter, using the hashtag #allhealthlive, and join our community @AllHealthPolicy, as well as on Facebook and LinkedIn. We want you to all be active participants, so please get your questions ready. There’s a dashboard on the right side of your web browser with a speech bubble icon. You can use that to submit any questions at any time, during the broadcast, as well as, if you have any tech issues you’re experiencing, we’ll try to help you out. Be sure to check out our website, all health policy dot org, where you can find background materials, including resource, an expert list, and a recording of today’s webinar, including today’s slide deck, will be made available at all health policy dot org soon.
So here with me to explore Medicare Part D its evolution, and its redesign is an esteemed group of experts. I’m so pleased to be joined today by Leigh Purvis, who’s the Director of Health Care Costs and Access at the AARP Public Policy Institute. Ms. Purvis heads The Institute’s work on prescription drug and mental health issues. Her primary areas of expertise are prescription drug pricing, biologic, drugs, and Prescription Drug coverage, Under Medicare. She’s a co-author of the Public Policy Institutes, annual RX Price Watch Reports, which track price trends for prescription drugs widely used by older Americans.
And next, I’m pleased to introduce Juliette Cubanski…
PHD Deputy Director of the Program on Medicare Policy at the Kaiser Family Foundation. Doctor Cubanski leads analysis on Medicare prescription drug coverage and related policy issues, including analysis of trends in the Medicare Part D Drug Benefit Program. In addition, she conducts research and analysis related to Medicare spending and financing financial burden of health spending among Medicare beneficiaries and policy, proposals related to Medicare reform. And finally, we have doctor Stacie Dusetzina, who is an Associate Professor for Health Policy, and the Ingram Associate Professor of Cancer Research at Vanderbilt University Medical Center. Doctor Dusetzina and her work has contributed to the evidence base for the role of drug costs on patient access to care and policy changes that might improve patient access to high priced drugs. She’s participated in working group meetings on patient access to affordable cancer drugs hosted by the President’s Cancer Panel, and co-authored a National Academy of Science Engineering Medicine Report on that topic.
And on the top of her list of achievements, Dr. Stacie Dusetzina was recently inducted into Med Tech. Congratulations. So we’re going to launch today’s discussion: hearing from …, who will be providing a brief look at where Medicare Part D has been, where it is today, and where the program is heading.
So we welcome and I will turn it over to you.
Thank you so much.
Hi, everyone, Thank you so much for having me. As you heard, my name is Leigh and I’m with AARP Public Policy Institute, and I have been asked to explain a very complicated program in a very short period of time, so I am just going to jump in.
Next slide, please.
So in terms of where Medicare Part D came from, it’s actually a relative newcomer. Medicare itself has been around for about 40 years, and Medicare Part D was implemented in 2006.
The program provides voluntary outpatient prescription drug coverage, but I feel like that should be in quotes, because there is actually a late enrollment penalty. If you go longer than two months without coverage, that’s comparable to Medicare Part D, you will pay an extra premium or an extra amount onto your premium every month for the time that you are in the program. And that’s really just intended to encourage people to have prescription drug coverage.
Another really important part of the program is the low-income subsidy. Alternate is extra help, which can provide a lot of help with premiums and cost sharing for enrollees who have limited income asset. The program is incredibly popular, about three quarters of Medicare beneficiaries about 40 million, 48 million are enrolled in a Medicare Part D plan.
Next slide, please.
So how does it work? There are actually two types of private plans that provide coverage under Medicare part D one is a standalone prescription drug plan that just provides coverage for prescription drugs or a PDP. And the other is a Medicare advantage prescription drug plan, which provides drug coverage plus other Medicare benefits.
The plans have to meet some defined requirements, but there are a lot of variation between plans. You can see a long list. Here. It’s premiums whether the plan has A deductible, the types of cost sharing, whether at the flat co-payments, or co-insurance, where you pay a percentage of the drugs price.
The formularies which drugs are covered, and how utilization management, if there’s something like, prior authorization or step therapy involved for the drug. And then a lot of the plants. A pharmacy. That works.
That include preferred pharmacies, though, you can actually get lower cost sharing if you go to a preferred pharmacy with a lot of different facets of the plan, that, frankly, can make it a little complicated to differentiate between them.
Next slide, please.
So how many bands are people evaluating and thinking of all those characteristics? And the answer is a lot on average beneficiaries are looking at roughly 60 Medicare Part D plans between PDP and MVPDs. In 20 21, I’m thinking about your recovery that you probably have, it’s probably a little daunting to imagine trying to look at that many plans on an annual basis.
About half of Part D enrollees are enrolled in standalone PDP and the other and … with a slightly larger number and the …, which is actually a reversal of. traditionally, We’ve been seeing more people in PVP, that we’re seeing a little bit of a transition within the market.
It’s also important to keep in mind that enrollment, and Part D is really concentrated. There are five plan sponsors that account for almost three quarters of party enrollment. So people tend to be sticking with plan sponsors, and they attempt to attract a lot of the enrollees in the program.
Going back to the low-income subsidy or extra help about 1 and 4 are enrolled in low-income subsidy. So, it’s really important part of the program for helping the beneficiaries to be able to afford their prescription drug cost.
Next slide, please.
So it’s interesting, and speaking of all those different characteristics of Part D plans, While the average monthly premium has stayed relatively constant recently, there have been some fluctuations, but it’s now about $26 per month. But there are actually some seriously different trends, I would say, for some plans with high enrollment that we’ve seen thumb, really sizable premium increases since 2006. There are some plans that have theme premium increases that have doubled or even tripled since they first came on the market, That there’s a lot of enrollees out there that are actually paying substantially higher premiums and what perhaps the average shows.
We have also seen a shift towards very substantial cost sharing for some drug, that you’ve probably heard prescription drug prices are increasing and cost sharing reflect that.
Part D plans can actually charge a maximum of co-payment of $100, or 50% co-insurance for the percentage of the price.
That can add up to a lot, and we’re seeing a lot more plans using that co-insurance across the board for all parts of their formulary, though we are seeing a lot of beneficiaries who are experiencing some pretty high costs associated with their Part D plan.
Next slide, please.
So the short question is, that has been a success. that, I would say, for the beneficiary perspective. Absolutely.
If you compare pre part D to current day, nearly 90% of older adults now have prescription drug coverage, which is a huge improvement. And if you look at how the beneficiaries look at the program, they report extremely high satisfaction year after year. I think there is a little bit of a challenge there. In some ways, they are very satisfied, but that may be encouraging them, not to switch plan, even when it would benefit them.
There are a lot of beneficiaries who are, paying higher premiums are higher cost, then they would have they taken the time to take a look at the plans that are available to them. Right now, only about 10% of beneficiaries are switching plan, year to year, and, of course, we’d like to see that higher.
Next slide, please.
I think the short question for today is, you know, are these goodbyes going to continue? Part D plan has been successful from the perspective that hit provide coverage. But if there’s one thing I can leave you with as we kind of jump off into bigger questions about the program, is to keep that personal perspective. In mind, We are talking about a program, but there are real people who are being affected by what’s happening within that program. It’s really important to be mindful that Medicare beneficiaries really do live on very modest resources. The median income is just under $30,000 per year and one in four have less than $8500 in savings. So when we’re talking about all these changes in out of pocket cost and program spending, please keep in mind that those beneficiaries really are being impacted, and unfortunately, they really are not able to absorb some of the costs that are increasingly coming their way.
Thank you so much, Lee, and before you, and we’re going to turn it over to doctor … a minute. And then we’ll get into some follow up questions.
Can’t get your back.
I wanted to ask you this, because just to follow up on your last point, for Against Juliette $30,000.0,025 Have less than $8500 savings and you mentioned the LIS or extra help Program.
Can you share a little bit more, like how does somebody qualify for that?
How do they know that they qualify?
And is everybody who should be getting it getting it?
The short answer is no, not everyone here should be delegate is getting at and you do have, they have some pretty strict eligibility criteria. So, you need to have an income less than less than 150% of poverty, which is around $19,000 for individuals and about $26,000 for married couples, and very modest asset. Though less than $14,000 for individuals and less than 30,000 for a couple. So there, it can be difficult to qualify with those eligibility criteria and a lot of people aren’t necessarily aware of the program, which is another problem. But it’s definitely something that I think people are thinking about is how to make sure people are aware of it and then also how to apply.
But it’s an underutilized assets.
Think, thank you so much for clarifying that. I’m sure we could do another whole hour just on that. So great, thankfully, for that great overview. And now, please welcome Juliette ….
Great. Thank you. Now that Lee has provided a very helpful overview of Medicare Part D, I’m gonna focusing on some of the details, specifically the benefit that Part D provides and details about enrollee out of pocket spending and Part D program spending overall.
Next slide, please.
Medicare Part D plans are required to offer a standard benefit or a benefit equal in value.
In 20 21, the standard benefit has a $445 deductible, followed by an initial coverage phase where enrollees pay 25%, and plans pays 75% of total drug costs, up to $4130.
This is followed by the coverage gap phase, where enrollees used to pay 100% of their total drug costs, which is why it was called the coverage gap.
But after a tenure phaseout, provided, or by the Affordable Care Act Enrollees now pay 25% in this phase.
And for brand name drugs, they receive a 70% price discount from manufacturers, and plans pay the remaining 5%, But for generic drugs, there is no manufacturer discount. So plans pay 75% of those costs and beneficiaries pay 25%.
When a beneficiary’s out of pocket drug spending exceeds just over $6500 in 20 21, they become eligible for catastrophic coverage, where cost sharing falls to 5% of total costs.
Plans pay 15%, and Medicare pays the remaining 80%.
This 80% payment by Medicare is also referred to as re-insurance.
Part D plans can modify some of these standard benefit parameters.
For example, they can charge a lower or no deductible and they can charge tiered co-payments, or co-insurance amounts other than 25%.
one thing to keep in mind is that these cost sharing requirements do not apply to Part D enrollees who receive low-income subsidies, propose individuals’ cost sharing amounts are considerably lower than folks who don’t receive low-income subsidies.
I should also note this cost sharing designed for Part D covered drugs is unlike that in Medicare Part B, which covers physician administered drugs, not drugs that you can purchase at a retail pharmacy, which is what Part D covers.
For Part B drugs’, Medicare charges a flat 20% co-insurance, although many beneficiaries have supplemental coverage like Medigap or retiree benefits to help pay their cost sharing liability.
And unlike Part D, Part B is not administered through private plans, you don’t need to voluntarily sign up.
Everybody who’s enrolled in Medicare Part B automatically has access to drug coverage through Part B Under Part D, unless you are receiving low-income subsidies, you are required to pay what your plan charges for prescription drugs.
And I want to emphasize the fact that Part D does not have an annual limit on out of pocket truck’s spending.
Next slide, please.
And because the standard benefit parameters increase each year with the rate of drug spending growth per enrollee, the amount of out of pocket spending required to qualify for catastrophic coverage is now nearly two times higher than it was 15 years ago.
This is not a problem for the majority of part D enrollees because most have relatively low out of pocket drug costs.
On average, in 20 18, part D enrollees who didn’t receive low-income subsidy spent about $500 out of pocket on their prescriptions, but with no hard cap on out of pocket spending under part D, a small share of enrollees faced thousands of dollars in out of pocket drug costs each year, whether because they take a lot of prescriptions or because they take 1 or 2 really expensive drugs.
In 20 18, just over one million parking enrollees had out of pocket spending above the catastrophic threshold, and their annual out of pocket costs averaged $3100, which is about 10% of median per capita income for people on Medicare.
Shifting Now to look at overall Part D Program spending, Part D spending was just over $100 billion in 20 19, or about 12% of all Medicare benefit spending.
Annual Part D spending depends on several factors, including the total number of Part D enrollees which has been increasing over time, their health status and drug use, the number of high cost enrollees with spending above the catastrophic coverage threshold.
The number of enrollees receiving the low-income subsidy then clan’s ability to manage their enrollees drug use, such as encouraging the use of generic drugs instead of brands, as well as applying utilization management tools like prior authorization, as well as plans ability to negotiate price discounts and rebates with drug companies, which they use to help lower their overall costs.
Federal law currently prohibits the Secretary of Health and Human Services, from engaging in drug price negotiations with drug manufacturers.
That role is left to the private plants that administer the party.
Some recent cost and utilization trends have helped to constrain parti spending growth, such as a shift in use from brands to generics, but other trends have accelerated cost growth such as the introduction of new, higher cost specialty medications that are covered by Part D.
Although, only a relatively small number of Part D enrollees reach the catastrophic coverage phase, recall that the federal government pays 80% of total costs for this part of the benefit.
Essentially, the federal government is subsidizing the majority of costs for high cost enrollees.
Bakwin Part D started this allocation of liability seemed pretty reasonable when the expectation was that these government re-insurance payments would only account for a relatively small share of total program spending. And, in fact, back in 2006, it was only 14%.
But now, government spending on re-insurance is about half of all Medicare Part D Program spending.
This larger portion of program spending accounted for by these re-insurance payments is a result of several factors.
Including an increase in the number of high cost drugs covered by Part D: drug price increases, and a change made by the Affordable Care Act to count the value of the manufacturer, a discount on the price of brand name drugs in the coverage gap.
Coverage gap towards the out of pocket threshold for catastrophic coverage and this change has actually contributed to more Part D enrollees with spending above a catastrophic threshold over time.
The number of enrollees with, without low-income subsidies, excuse me, who had out of pocket spending above, the catastrophic threshold started increasing in 20 11, and has it exceeded one million each year since 2015.
And so, on a per capita basis, we are expecting higher part D spending in the coming decade than we experienced in the previous one, which has implications for Medicare spending overall, as well as for beneficiaries in terms of their out of pocket drug costs, affordability, and access to medications, and taxpayers, because income tax revenue goes to fund a portion of Part D program spending.
And I think it may also lend some urgency to the discussions around policy proposals to lower Medicare prescription drug spending.
Sarah, turn it back to you.
Great, thank you so much, Julia. I’m trying to get my camera back on. I had a follow up question for you. You’ve done such an amazing job, really breaking this down for us.
So, um, I’d like to ask you, actually to follow up questions. one already came in from our audience, and we could have kind of expected at, which is about the new Alzheimer’s drug. You mentioned the difference between Part B and Part D The questioner wanted to know how the new Alzheimer’s drug might affect people entering the catastrophic coverage threshold. Can you, can you respond to that question? And then I got another one for you. OK, yes, first question. The new Alzheimer’s drug as your home will be covered under Part B Not, excuse me, not Part D.
So, out of pocket costs for AG home will have no relation to out of pocket spending under Part D, and won’t help people who are covered under Part D transition from one phase of the benefit to the other. So, they are completely separate cost sharing arrangements and coverage arrangements.
But that’s a really important question, particularly because the out of pocket cost aji helm is expected to be about $11,000 a year for beneficiaries in Medicare.
Thank you, Julia, and as, and as I understand, it will also have some ancillary costs from imaging and other doctor visits that are not accounted for in the particular price of just the medication itself. Let me ask if if we could go back to the slide that you showed of the carrot that the actual catastrophic coverage and coverage gap. What I’d like to ask you about is you know, you did a really great job just keep keep going back the donut hole slide even though you didn’t use the word doughnut hole as we as we used to. I want to talk to you about the tradeoffs. Keep going back please to figure 17.
No, there we go.
Can you talk a little bit about the trade offs?
Like, what are the different incentives for plans versus, you know, manufacturers that are, you know, sort of set up, by the way that, the, that, the coverage gap is set up, if you could touch on that.
I know that’s a big question, and we can, we can get more of it in the, in the discussion, but, But we’d love to hear your thoughts on that.
Well, it’s a really interesting question.
I mean, if you look at the liability for plans, after the initial coverage phase is over, after about $4000 in total drug costs in 20 21, plan liability is considerably less than it was. You know, back when Part D started, when there was, no, man, you know, back before the ACA, when there was no manufacturer discount.
So, you know, the fact that plans are only bearing 5% liability for brand name drugs, which are obviously the most expensive drugs once an enrollee exceeds the initial coverage limit and gets into the coverage gap phase.
And then even when they get to catastrophic plans, we’re only paying 15% of costs.
So no plans are in a position where a lot of the cost has been shifted onto manufacturers.
And then, when it gets than when, when enrollees get to catastrophic, you know, costs are mostly picked up by Medicare.
So that has actually helped keep premium growth in check, which has been good, for most people on Medicare Part D who don’t have really high drug costs.
But it’s not really great for program spending. And it’s not really kind of helpful for overall out of pocket cost, affordability, in terms of those who have really high drug costs.
And, you know, from a manufacturer perspective, they’re also really only on the hook for a relatively small range of total drug costs with that 70% discount between the initial coverage limit and the catastrophic coverage limit.
And once an enrollee gets to catastrophic coverage, the manufacturer of discount goes away.
So, I know Stacie will get to this in her discussions in terms of party benefit redesign, but I think the incentives right now are not great.
From an overall program spending perspective, certainly the manufacturer discountenance been tremendously helpful for beneficiaries when they get to that coverage gap, because they don’t, anymore, I have to pay 100% of their drug costs.
But it’s created some other, you know, poorly aligned incentives that party benefit redesign will help to address.
Thank you, and we have 1 1 other audience questions. So I can’t let you off the hook just yet, but promised me, the last one. Another question about incentives.
And it’s that it seeks to this slide, You see, you spoke to the differences between brand and generic, And the question was whether the brand name discount in the coverage Gap is leading beneficiaries and plans to prefer brand name drugs over generics, doing it.
As well, you know, certainly from the perspective of, of people on average, plans are covering generics favorably to brands.
But because there is no discount for generic drugs, certainly one could expect that plans may, in some cases, prefer beneficiaries to take brands. They get the discount, it helps them move through the coverage gap phase more quickly.
Um, but, you know, I think the reality is generics are cheaper for everybody. You know, from a beneficiary out of pocket perspective and from a plan cost perspective.
And, you know, research that we that doctor …
Dina and I have have conducted suggests that plants do not really preferentially cover brands in favor of generics for the most, for the most part.
Wonderful. Thank you, doctor Juliette QPSK and we will make sure that we follow up with you on that particular research, as well and add it to our, our website, for our audience, for those who aren’t further reading on this topic. Well, thank you so much for setting up that. That was a great overview, and we will now turn to doctor ….
Hi, everybody. And so, after that wonderful set of introductory slides by Lee and by Juliette, I’m gonna be talking a little bit about how we’ve been thinking about options for Medicare Part D redesign, and some of that those that have been put forward in Congress. So next slide, please.
So, this has been a very active area recently, and I’ll say recently, because we’re just all going to pretend 2020 didn’t happen. So, in 20 19, there was quite a bit of legislation around this topic. And also, in 20 21, we’ve seen some new introductory bills.
So the ones that I’ll focus on today are a plan that came out of the Senate Finance Committee. This is a bipartisan bill that was spearheaded by Chuck Grassley and Ron Wyden.
And I’ll also touch on a Democratic bill lead, spearheaded really by Nancy Pelosi but also that had gone through the House and was voted on by the House and passed in 20 19. That’s HR three. And then HR 19, which is a republican led bill that had been introduced in 20 21. And so next slide, please.
In general, these proposals are shockingly similar despite and then coming from different committees are being spearheaded separately by Democrats and Republicans, so like a lot of agreement between these bills. And in general, they, they seek to do a couple of things. The first is to eliminate the coverage gap. So, we’ll have another figure, but you’ve just been staring at the one that doctor Cubans he worked through in detail. It’s complicated. The benefit design has a lot of moving parts, who pays what and when And it really is very inconsistent.
If you think about that patient going into a pharmacy to fill their prescriptions month after month, the fact that your price can change with every fill is not really a great thing for consistency or thinking about people being able to know what to expect and also to be able to take their medications as prescribed. So the bills really seek to simplify the benefit. No more coverage gap.
Let’s just have something that has a predictable cost for people month after month, Know, the other thing that they is a focus is removing the 5% co-insurance and the catastrophic phase of the benefit. So today, Medicare beneficiaries, you know, we have over a million who don’t have low-income subsidies who went into the catastrophic phase, and in that phase, they pay a 5% co-insurance under the benefit. So that doesn’t sound very bad. But if you’re taking a cancer drug, that could be, you know, $20,000 is a price.
That is a typical price for some of the chronically used cancer drugs filled on Part D, that could be about a thousand dollars a month after you’ve reached catastrophic coverage. So there is an effort to limit out of pocket spending for beneficiaries across all of these plans.
In general, there is a shift towards plans having a higher percentage coverage, so they’re responsible for more spending before reaching the coverage gap, or, I’m sorry, the catastrophic phase. And then, shifting around those incentives. So some of the discussion before we moved on to this set of policy options focuses on, you know, what our plans, incentives, and what our manufacturers incentives around the current design? This? All of the redesign proposals tried to shift the incentives, to make sure that plans are really engaged in trying to manage the benefit.
And that drug manufacturers have more financial responsibility for drug spending across the benefit.
So, you know, again, this is, this is how we’re thinking about the benefit under redesigned proposal, is really, instead of those multi phases that we saw before, we’re really focused on a very streamlined benefit from the patient perspective. So 25% co-insurance is kind of the standard benefit design plans, pay 75%, and then you get into the catastrophic coverage phase and patients don’t know any more money.
Everybody has a cap on out of pocket spending, and then manufacturers, Medicare, and the plans have different responsibilities than they do today.
I’m gonna, we’ll jump forward one more slide.
So, there are some differences by Bill, so they’re not all exactly the same.
And this just gives you an overview of the way that they’re thinking about who pays what, and when, when you’re looking at the benefits. So the biggest difference is, I think, our HR three has an out of pocket spending limit of $2000. Whereas, the other two bills went with $3100.
Now, Y 3100, so that the desire there was to kind of match what would have been the spending needed to get to the catastrophic phase under the current benefit design today, if you were using brand name drugs.
So this is an effort to kind of keep things as similar as possible to what level of spending each of these entities had as of, you know, the time that those were being developed.
Obviously, for patients, lower is better when we think of out of pocket spending limits.
But we also have to consider, you know, would that create some unnecessary.
We overuse potential, we have some prescriptions, or potentially even maybe driving up prices.
So one of the concerns about just doing an out of pocket kap without doing anything around managing drug prices is that if a manufacturer knows that, you know, after a patient pays $2000, then it’s free to them, There really no is no reason to limit your price, So we have to think carefully about that.
Otherwise, we have, you know, a little bit of a difference between these bills, as far as what percent the manufacturers pay, ranging from about seven to 10% in the initial coverage phase. So they’re on the hook for some level of spending during each of the phases of the benefit, that increases for drugs that are more expensive, where you have more fills in the catastrophic coverage phase.
And that’s true across all of these plans. And then, what the plans pay and what Medicare pays? So what Medicare pays actually goes down from 80% to 20% in the re-insurance. And that’s consistent across everybody.
So I guess if I want you to walk away with anything today, it’s that even though there are some minor differences in the details by Bill, these are shockingly similar. And all kind of around a core mission of capping out of pocket spending, simplifying the benefit, and addressing some of the key problems we know that exist with the Part D benefit today.
Alright. So, again, small differences. I think I just said all of this, but you haven’t for your notes with these slides after the panel, and I think that might be my last slide.
Next slide are the end. There we go. Awesome. Thank you so much that this was this was really great and, and, and Stacie, let me let me ask you. I think that was an interesting No comparison between the $2000 and the $3100.
I know you’re, you know, you you’re studying these things.
And you’re not like working on the Hill, but from that from the perspective of how does that then You know affect the cost of the overall bill? Do you think that that is a factor? And why? why that legislative decision was made.
Yeah, I think that’s right.
So, um, one of the challenges is, is that these are in the package of reforms. So when you look at the full package of reforms under HR three, even though they have a lower spending cap, they also include drug price negotiation and limits on price increases. So overall, that, though, is expected to have a huge amount of savings when you combine those elements. But with the $2000 cap, there’s an expectation that if you only did that, you would see an increase in spending.
Not, I don’t think it would be a dramatic increase, but it’s still an increase if you only did that component. And, on the other hand, I think the other drug pricing those then end up more cost neutral. When you’re thinking about today, because, you know they, that set of reforms included a limit on price increases to the rate of inflation, and still found savings. Again, not quite as dramatic as if you also included drug price negotiation.
But, in general, like, we could modify the benefit in these ways, and, potentially, save some money, but likely, at least not, do too much harm to the budget, by making these reforms and limiting out of pocket costs.
The one thing that I’m not sure that has been fully explored is where, like, is there pent up demand? That is not currently being met? So we know how many people enter the catastrophic phase of the benefit, but we don’t have a great idea of what percentage of beneficiaries don’t fill expensive medications that they were prescribed because they can’t afford to sell the first prescription. So I spend a lot of time thinking about specialty medications, which are very, very expensive.
And so we have some preliminary data showing that, you know, over a third of people who have a cancer drug, prescription for a Part D drug, don’t fill it.
And so, like there could be additional demand that we haven’t fully recognized, which could further increase spending.
But I think, when I think about this from at least just the beneficiary perspective, everybody else says Health plan has an out of pocket maximum.
And for Medicare beneficiaries, it seems unfair that, you know, they are exposed to unlimited out of pocket spending. So I think this is something that’s well past due.
Great, thank you. Thank you so much, Stacie. And we have already some great audience questions coming in. So I’m going to invite the rest of our panelists to come and join us. And, while they’re doing that, there was an interesting question. speaking a little bit to your point about, like, what do consumers do, which was, you know, if someone is prescribed something under Part B, you should, you know, like an infused. You know, can they ask for the pill version?
Of course, there aren’t pill versions of all of these different kinds of medicines, so, you know, is that something that is a tactic that people can use or should use.
I think there are few examples where that that is possible, but by enlarge, it’s kind of an either, or, you know, like, the coverage is happening under Part B, or it’s happening under Part D I think in some clinical scenarios, like in room into logic diseases. Or, maybe you have a little bit more choice and a couple of drugs that have better coverage under Part B.
So, I think there is a little bit of navigation, but, by and large, it’s like, if you need this particular drug, it’s covered under one part of the benefit and not the other.
No, maybe one of the other panelists can speak to appeals processes. That’s another thing that can be used, like if your drug isn’t covered.
But one of the problems is, is like a lot of these drugs are covered, but they are just expensive. So it’s like, you’re getting coverage, but maybe you just don’t can’t afford the price that is, you’re facing when you have to sell it.
Great. Yeah, Lee, I don’t know if you have any thoughts from your, from the consumer perspective about how people navigate all of this.
I think the challenge that they aren’t, and that’s kind of where our concerns are coming from. Where we are seeing and hearing from members who are finding themselves in a spot where they simply cannot afford the drug, they don’t have an alternative.
And so, oftentimes, they’re going without, or they’re really having to make those tough decisions between paying for that drug that they need, or paying for things like our rent.
And, that really is not a position we think anyone should be in, though, you know, it really is an issue that, unfortunately, there aren’t a lot of solutions to beyond trying to address the root of the problem, which is what we’re discussing today.
All right, thank you.
So, um, doctor …, you had mentioned some of the other, no aspects of the, the, the, the bills and you’ve said, you know, you talked about negotiation.
Of course, that’s been a very For big point of contention, can you speak to how that is addressed in the different proposals, and then I want Julia to weigh in as well?
Sure, So, um, Not much.
And HR three addresses it very directly and includes international reference pricing as their mode of drug pricing, and drug pricing reform. So, negotiating and getting prices that are similar to other countries, which would be expected to dramatically reduce what we pay.
That translates into lower costs for beneficiaries, because if we’re paying much less for the drugs and people are paying a percentage of the drugs price like that automatically reduces what the beneficiaries would have to pay for many of their drugs.
The other bills, really, HR theory also includes a limit on price increases. So like that is something we have in Medicaid, but we haven’t had in Medicare, and I think would be very welcome. So the Senate bill also includes that drug price increase, like limiting it to inflation. So for existing products that are already covered, that’s great. You know, we slow the growth in the price.
one of the challenges is, is that if we aren’t doing anything about the price, then companies can very quickly turn around and raise their price to make up for the fact that they can only increase the price by inflation now, and not by whatever amount they want.
So I, I was in a big meeting, and we, you know, I heard from industry members. When the coverage gap discount jumped from 50% to 70%, they’re like, Oh, we immediately renegotiated olive our contracts.
So I think there is a real risk that, you know, if we do only one thing, and we don’t do other things to try to make sure that the prices can’t just go up to compensate for those losses, then we should just expect to still be paying more.
So, it’s like I always say it’s like whack a mole, you know? Like it’s gonna, they’re gonna maintain the profit levels as much as possible.
Thanks, Any other comments on that question?
And obviously, a huge point of contention right with with, with then, you know, sort of the counter counter argument that imposing such draconian no changes to the prices would, would influence R&D and innovation.
I know we’re not going to have a lot of time to get into all of that, today, but certainly, That’s been one of the other other pieces of the puzzle.
I think one of the things that has been interesting over time is and I think this was a letter from Republican members after drug pricing reform kind of got tabled you know, in in 20 19 as, you know, that that basically we have a Part D redesign, that is very sensible. We have a lot of things we agree upon. We could do something bipartisan in this area. And I think that’s something important to hold onto, is, you know, like drug pricing reform is a big topic.
Medicare beneficiaries right now have real challenges with affordability that should be addressed, and if we can’t get both together, we should still not, you know, throw this out, because we can’t get an agreement on, you know, the level of drug pricing reform.
It’s like, this is still important, independent of those other things, It’s just, we should recognize that some of the changes we made could potentially make it even more challenging with, you know, drug spending.
But those topics can also be tackled.
I would echo what Stacie said.
I think it’s, you know, when you look at the different policy proposals in HR three, and HR. 19, in the Senate Finance committee, all from a couple of years ago, there’s not, you know, there’s some common ground.
Part D redesign is a feature that runs through all of those proposals and aye.
So, you know, I think it’s important to, to consider why that’s the case.
You know, medicare beneficiaries don’t have an out of pocket cap on drug spending. And that’s unlike any other, you know, insurance product out there in the commercial market.
And, you know, we’re talking about a population that has, you know, a lot of chronic conditions. And part D is increasingly covering high cost medications that weren’t around 15 years ago when part D started. So as, as Stacie said in her remarks, you know, that 5% co-insurance and the catastrophic coverage phase seemed pretty reasonable.
When we had drugs that cost, you know, maybe a thousand dollars a year, but now we have drugs that cost $100,000, say here.
And that’s just such a, you know, remarkably high number that, you know, for any of us to have an unlimited liability for that medication. And during the course of the year, could, you know, could break the bank.
And, and we’re talking about a population that has, you know, median income of $30,000 a year.
So, but the fact is that, you know that the Part D benefit doesn’t quite look like it should for the pharmaceutical marketplace that we have today.
And, you know, policymakers can disagree about drug price negotiation and inflation rebates, but if they can come to agreement on Part D redesign, that seems like a really important thing to focus on and, you know, dealing with maybe some of the consequences after we’ve provided assistance to beneficiaries in the form of an outage, mm statehood. Juliet point. You know, obviously, it’s incredibly important to make sure the beneficiaries have access to the drug that they need at an affordable way. And that is no driving our interest in ensuring that there is the heart out of pocket cap under Medicare Part D. But on the other hand, the other side of the coin that we really can’t forget is the fact that price is high drug prices. And price increase is really what’s driving what we’re seeing under Medicare Part D.
So if we don’t address that part of the problem, we really are just kind of kicking the can down the road.
And it’s really kind of behooved everyone to address both parts of the problem, because the reality is we wouldn’t be seeing what we’re seeing under Medicare Part D of drug prices weren’t doing what they’re doing, Though, finding a way to address that is also really important.
And, and, and, and there’s a good follow up question here, and, Lee, I’ll I’ll turn to you for this one, which is the question from the audience, do you believe the frequent focus on premium costs which are low in comparison to cost sharing are causing unnecessary challenges too?
No, cost sharing issues that you mentioned and, you know, this person specifically asked about the serious, life-threatening chronic conditions.
Juliette, you presented some data earlier about, you know, like the average spending and that it’s, it’s the usual as in Health policy, right? The small number of people has the high, high costs. You know, We would, would any of these proposals address that and actually help people with those much more serious conditions.
I think the expectation is going back to the original question about premiums and the focus on premium.
I do think there’s been a lot of attention paid to the fact that Premium really haven’t changed a whole lot.
And they aren’t that expensive. But like I mentioned during my presentation, if you dig a little deeper, you do see some people that are paying $80 a month for the prescription drug plan. So this premiums do actually get a lot more expensive than what you potentially be on an average. And I do think hopefully to the extent that any redesign efforts include efforts to address prices. That’s where you really start seeing the changes and cost sharing, especially to the extent that plans are relying on co-insurance. which is actually just a reflection of the drug price. Because as a percentage of the drugs price, to the extent that you can get those prices down, or at least not growing as quickly, that will have a meaningful impact for beneficiaries who are facing that high cost sharing.
Going back to the original point, you want to make sure that, that program funding, you know, not increasing. You want to make sure that out of pocket costs are not increasing, but it’s going to take a lot of different approaches to make that happen. So, complicated problem, but I do think we often solution.
Sorry, can I add on to that?
I think this premium question is really important, because we have seen a trend where, you know, premium, the average premium has been, you know, relatively consistent hovering around $30 or so.
But I think, as we said underneath that, there are some more interesting trends in cost sharing that could have a more meaningful impact on beneficiary out of pocket spending.
Plans have been increasing the deductable that they’re allowed to charge. So the majority of plans now charge a deductible.
And plans have also been switching to using co-insurance, particularly for non preferred drugs.
And I think if people are focusing on the premium as a measure of overall cost, it’s inadequate in terms of understanding a beneficiary’s total liability.
But it can be really hard as the person trying to choose a Part D plan to understand what your total costs will be. And if you’re only focusing on the premium, then you may be really missing the more important part of the story which is are your drugs covered by the plan that you’re enrolled in, what formulary tier or they placed on?
And what’s the plan charging? And what pharmacy do you go to? And is that a preferred pharmacy? Because you may pay more if you go to a non preferred pharmacy?
So there are several levels of cost involved in a Part D plan.
And in comparing, it’s really important to look beyond the premium to, to understand more about the other costs associated with coverage.
And what’s happening with those costs in our analysis.
We’ve seen plans charging higher costs, as I said, particularly, for non preferred drugs.
So while it’s in an individual decision, and some people might be no better off and a cheap plan, that is definitely not the only important, not the most important thing that people need to be considering, and in evaluating their different party plan options.
Great, and there’s some great audience questions coming in.
And we’ve got eight minutes left, so I’m going to accelerate the pace a little bit, but one, another, one, basic one came in that I want to make sure we really address, again, when is part be used for medication versus part D? And then, again, like, if we go to the, you know, you’re picking a party plant mean, to people even know that the difference, as some drugs might be covered in some May. May. Not under this plan, so. so Julia, is, since you were, you were speaking. Can you just give us the short snapshot? And then, again, we can add resources to our list for folks who want to read more.
So really briefly, part D covers outpatient, retail, prescription drugs, so the drugs that you get from the pharmacy, you know, from CVS or Walgreens, that you go to your doctor. Doctor writes a prescription. You take it to the pharmacy, you get a pill to swallow it. That’s generally what Part D covers.
On the other hand, Part B covers drugs that are administered by a physician.
You go to a hospital outpatient department if you need chemotherapy or you know, some other condition that requires a drug to be injected or infused. Those drugs are covered under Part B?
Great, Thank you. Alright, we have a couple of really wonky one, so we’re gonna just go go to those. one of them was specifically for for UCC. These redesign options have a potential unintended consequence on Part D, EG WPS. Doesn’t Medicare want AGW fees to keep their plans? are to go on the open market? Over seven million folks on each WPS, with the cost of Medicare, of three billion? If they go on the open market, can you deconstruct that question for us a little bit?
Try, try and answer that, and we’ll see if others want to weigh in.
I saw that question, and I thought, Gosh, I hope Giulietta knows the answer to this question.
I guess, I’ll say my gut reaction. So, my gut reaction is like the employer group waiver plan.
So it’s like, when you get your benefits through your employer, and you get a payment to do, basically stay off of the Medicare Part D, the individual plans, your employer does to subsidizer coverage.
So my impression has been that there has been a trend away from these over time.
So employer sponsored retiree drug benefits have gotten less, less and less popular overtime with employers, as if they kind of moving their employees off into the Into the Part D plans.
Individually, I would assume that, yeah, Medicare redesign probably could push more people into the traditional program into the standalone plans or Medicare Advantage if employers saw them as a dramatically higher costs at maybe.
But I, I guess Juliette hurriedly, if either of you know more about the Employer Group Waiver Plans.
Kick kick him in.
I guess I would just say, you know, I’m much my sense is that Medicare may be agnostic as to whether a beneficiary is in an Employer Group Waiver Plan, or in a standalone or Medicare Advantage Drug Plan, Medicare is subsidizing coverage under both?
Under the …, as well as, you know, the basic standalone, PCPs and MVPDs, I mean, I think the main concern is making sure that these beneficiaries continue to have access to drug coverage.
Whether they’re in an employer group plan or a standalone PDP or an MA PD, to some extent, they might be better off if they were in a standalone or Medicare Advantage plan. Because they could actually then choose their coverage.
And, you know, the …, if that’s what your employer offers, that’s what you get, unless you decline it, and then you are declining everything that your employer is offering in the, in the form of retiree benefits.
So, know, some people may be better off if they’re able to kind of go into the open market, if you will, for other Part D plans. Yeah, and I am sorry to cut you off, but I wanted to just get to a couple other questions.
But it does point to an interesting question, right, Which is, like, will any of these Part D redesign proposals would Dave, and after, like, alter anything outside of part D on the commercial market or what have you. That might be a question for another time, but I’d be curious if anyone has any quick, like, immediate reactions to that?
I think, maybe, I guess, maybe going back to the employer group, waiver, you know, like, my, my impression is that they can be a little bit more generous, especially during the coverage gap where a beneficiary would go from a co-pay to a co-insurance. This is, there was a recent paper showing this for insulin. So where the insulin coverage under employer group waiver was more like a flat co-pay for every single cell, versus this disruption where you pay co-insurance at some point.
So like, by simplifying and streamlining the benefits. So they’re not so many phases.
It may actually mean that employers to look at that or other no systems look at that and go, OK, well that’s that’s better.
But I I think that the redesigns really just aim to fix a lot of internal problems.
To Medicare while keeping things as cost neutral as possible.
So I’m not sure about that. There would be a lot of negative spillovers on to other payers.
Great, let me, we’re going to have to close, unfortunately. But I’ll ask sort of one final question for each of you, which is, and we’re just going to focus on Part D redesign, that you can feel free to add on to that. This was from the audience. Do the existing proposals provide enough enhancement of patient affordability?
What are the other things that would improve affordability? So, you know, I guess I’ll throw in the and how do we know? So, why don’t we go in and that’s just the speaking order we started with Lee. Would you like to kick that one off?
Sure. So I would say to the extent that there is a hard out of pocket cap which I think all of it’s just been hammering on to the extent that that exist.
That’s a huge improvement To the extent that drug price trends are moderated by that redesign, what’s included in the redesign. That is the big one for beneficiaries as well.
There also have been some parts of the read it, that effort that would allow beneficiary, If you, for example, blew through the benefit on that one fill, which is actually 10% of people who hit Catastrophic, they have what fell, and I’ve already hit their out of pocket back, That’s a lot of money for people, particularly who aren’t fixed income. So the idea of finding ways to spread out those costs, so they aren’t facing several thousand dollars.
in January, it would also be an important improvement. And then to the extent that we can encourage people to focus … a little bit more than co-insurance and incentivize that sort of planned behavior, I think that would be a big, important change, as well.
Great, thank you.
Doctor …, last point is one that I was going to mention, you know, that the trends that we’ve seen, in terms of benefit design with an increasing use of co-insurance is hitting people, I think, harder than, you know, these flat dollar co-payments. Obviously, that are easier to understand.
Co-insurance, you really only understand what your out of pocket cost is, if you know what the underlying price of the drug is and then, and that’s something you may only realize when you get to the pharmacy counter.
So I think encouraging plans or, you know, whatever CMS can do to maybe put some kind of requirements around, I’m using co-payments for generic drugs and limiting generic placement on non preferred tiers where there are co-insurance requirements. Those are kind of wonky things, but those really do matter in terms of beneficiary out of pocket cost.
Great, thank you, and Stacie.
Yeah, we covered it all. Really, I would say, completely agree about co-pays over co-insurance. We have done work, showing how the redesign could actually increase spending for someone using something like insulin relative today. Today’s benefits, so like not harming people who are lower … vendors, world, trying to add the cap, would be really important. But I think the spreading out, the cost of that first, high fail, you know, like, We know people will leave their drugs behind, if the cost is too high.
So like if we could take that first, you know if the cap is $2000 or 3100, don’t have the person hit that with a single fill. Like maybe do a monthly cap in addition to the annual cap, and then that could maybe help constrain.
not overdoing it on spending later. So, if you broke it up at $500 a month or something as your limit, that could help slow down, spending overall and make it more manageable.
A great point to end on, and, and, you know. It’s, it’s, it’s interesting, because, you know, that, that picture of someone leaving the prescription at the pharmacy counter, at the end of the day, the whole reason why we do this is, you know, presumably, improve people’s health, right? And, and so we’ve talked a lot about dollars, and cents, and benefit design, and so on.
But, you know, at the end of the day, it’s like, taking it to the next step of what impact will this ultimately have?
Health. So, thank you. Each of you, it’s been, it’s been an enlightening conversation. I hope it’s been helpful to our audience. Of course, please check out our website, all health policy dot org, for the materials from this conversation and fill out the evaluation. We really do use it. We’re all about continuous improvement. Next, save the date for our Signature Series Summit on health equity. We’re really excited to present that to you. And coming soon will be our health policy handbook, your easy peasy guide to some important core topics and health policy. So, doctor Dusetzina, doctor Juliette Cubanski, Leigh Purvis, thank you for joining us today, and have a wonderful afternoon.
Thank you, ladies.
Thank you. Great.