Part D After Ten Years: Successes & Challenges Jack Hoadley, - PowerPoint PPT Presentation

Part D After Ten Years: Successes & Challenges Jack Hoadley, Ph.D. Health Policy Institute, Georgetown University AcademyHealth Annual Research Meeting June 27, 2016

Credits and Notes  Major funding for this work:  Henry J. Kaiser Family Foundation  Some information for 2016 is preliminary and subject to change.  Find links to our full reports: hpi.georgetown.edu/medicarepartd

Part D After Ten Years  Enrollment and plan offerings  Premium trends  Evolution of benefit design  Impact of plan choice  Spending growth past and future  Future cost drivers

72% (up from 53%) of Medicare Beneficiaries are Enrolled in Part D Enrollment, by Type of Plan, 2006-2016 Employer-only group MA-PD enrollment 40.8 Employer-only group PDP enrollment 39.2 37.4 MA-PD enrollment (non-employer) 2.0 1.9 35.3 PDP enrollment (non-employer) 1.8 4.6 4.7 1.5 31.5 In millions 4.7 29.3 4.4 1.4 27.6 26.7 2.2 25.6 1.4 24.2 1.5 14.2 1.5 1.4 13.4 0.9 22.5 1.2 0.9 12.3 1.1 0.9 11.3 0.8 0.8 10.3 9.4 0.7 8.5 7.9 7.0 6.2 5.5 20.0 19.3 18.6 18.1 17.6 17.1 16.7 16.5 16.6 16.2 15.5 Share of 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 total in: 60% PDPs 72% 70% 68% 65% 64% 63% 63% 64% 62% 61% 40% MA-PDs 28% 30% 32% 35% 36% 37% 37% 36% 38% 39% NOTE: PDP is prescription drug plan. MA-PD is Medicare Advantage Drug Plan. Includes enrollment in the territories and in employer-only group plans. SOURCE: Georgetown/Kaiser Family Foundation analysis of CMS 2006-2016 Part D plan and enrollment files.

Nearly One-Third of Part D Enrollees Receive Low-Income Subsidies Share of Part D Enrollees Receiving Low-Income Subsidies, by State, 2015 National Average, 2015 = 30% 43% 28% 25% 20% 32% 22% 25% VT 24% 35% 21% 26% 25% 24% 22% NH 26% 21% 21% 25% 38% 24% 29% 26% MA 35% 19% 28% 31% 34% 24% 23% 26% 35% RI 31% 34% 36% 31% 31% 26% CT 37% 36% 24% 46% 37% 35% NJ 39% 30% 55% 34% MD 26% 29% 25% HI DE 63% DC <25% 25%-29% 30%-35% 36%+ 13 15 13 10 NOTE: Excludes enrollment in the territories. SOURCE: Georgetown/Kaiser Family Foundation analysis of CMS 2015 Part D plan and enrollment files.

Part D Enrollees Have Fewer – But Still Many – Plan Options Average Number of Part D Plans Offered to Enrollees, 2006-2016 Stand-alone prescription drug plans MA drug plans 55 54 50 46 42 35 33 31 31 30 26 26 21 16 15 15 15 15 14 * * * 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 NOTE: MA is Medicare Advantage. Estimates are beneficiary weighted. Number of stand-alone drug plans is reported at the region level; number of MA drug plans is reported at the county level. *Data not available. SOURCE: Georgetown/Kaiser Family Foundation analysis of CMS 2006-2016 Part D landscape source files.

Part D is Increasingly Concentrated Among Five Plan Sponsors Distribution of Medicare Part D Enrollment, by Firm and Plan Type, 2006 and 2016 All Part D Enrollment PDP Enrollment MA-PD Enrollment 2006 2016 2006 2016 2006 2016 UnitedHealth UnitedHealth CVS Health UnitedHealth UnitedHealth UnitedHealth 20% 21% 21% 22% 25% 27% Humana Humana Humana UnitedHealth 15% 19% Humana 18% 20% Humana 19% Kaiser 21% Kaiser Permanente CVS Health Permanente 12% Wellpoint 6% 13% 8% Humana Member Health Wellpoint 5% Aetna 6% WellCare 4% 6% 19% Health Net 3% Aetna 7% Anthem 4% Member Health Wellpoint 6% Express Scripts 4% WellCare 6% Express Scripts 7% 11% Aetna 6% All other firms All other firms All other firms 45% All other firms 43% 42% All other firms 34% 34% All other firms 21% NOTE: PDP is prescription drug plan. MA-PD is Medicare Advantage drug plan. Includes plans in the territories and employer group plans. SOURCE: Georgetown/Kaiser Family Foundation analysis of CMS 2006-2016 Part D plan and enrollment files.

Part D Premiums Rose in 2016 After a Period of No Growth Medicare Part D Weighted Average Monthly Premiums, Overall and by Plan Type, 2006-2016 $45 Stand-alone Prescription Drug Plans $39.21 $38.54 $38.29 $37.78 $37.75 $40 $37.25 $37.02 $35.09 $35 $29.89 $30 $27.39 $31.21 $25.93 $30.18 $30.17 $30.01 $29.95 $29.73 $29.49 $29.42 $25 $25.31 All Part D Plans $23.37 $20 $22.73 $15 $17.29 $16.99 $14.70 $14.59 $13.32 $13.30 $10 $12.26 $12.27 $12.08 $11.97 $10.35 MA Drug Plans $5 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 NOTE: MA is Medicare Advantage. Average premiums are weighted by enrollment in each year (April for 2015). Excludes Part D plans in the territories. SOURCE: Georgetown/Kaiser Family Foundation analysis of CMS 2006-2016 Part D plan and enrollment files.

Premium Growth Has Varied Among the More Popular PDPs Premiums for Selected Medicare Part D Stand-Alone PDPs, 2006-2016 AARP MedicareRx Preferred $70 Silverscript Choice Humana Preferred $60 $60.77 Humana Walmart $50 $40 $28.32 $30 $28.36 $26.31 $22.46 $20 $14.80 $18.40 $12.60 $10 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 NOTE: PDP is prescription drug plan. Plan names can change from year to year; plans are designated the same if they have the same contract/plan ID. Plan names for 2016 are displayed. SOURCE: Georgetown/Kaiser Family Foundation analysis of CMS 2006-2016 Part D plan and enrollment files.

Five Formulary Tiers Have Become the Norm in Part D Share of Enrollment in Medicare Part D Stand-Alone PDPs, By Formulary Tier Design, 2006-2016 25% coinsurance 1 generic tier/ 2 generic tiers/ Other formulary design 100% 2 brand tiers/ 2 brand tiers/ specialty tier specialty tier 98% 90% 80% 70% 60% 46% 50% 40% 33% 30% 20% 21% 10% 2% 3% 0% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 NOTE: PDP is prescription drug plan. Plans with 2 generic/2 brand/specialty tier design included in ‘other formulary design’ for 2006-2008. SOURCE: Georgetown/Kaiser Family Foundation analysis of CMS 2006-2016 Part D plan and enrollment files.

Cost Sharing is Up for Brands, Down for Generics Median Cost Sharing for Medicare Part D Plans, 2006, 2010, 2016, and Employer-Sponsored Plans, 2015 Employer Part D Cost Sharing Plans Formulary Tier Part D Plan Type 2006 2010 2016 2015 $1 PDP $5 $7 $10 Preferred generic* MA-PD $5 $6 $3 n/a n/a $7 PDP Non-preferred generic* n/a MA-PD n/a n/a $12 $41 PDP $28 $42 Preferred brand $30 MA-PD $26.70 $39 $45 40% PDP $55 $76.50 Non-preferred brand $50 $95 MA-PD $55 $79 27% PDP 25% 30% Specialty 25% 29% MA-PD 25% 33% NOTE: PDP is prescription drug plan. MA-PD is Medicare Advantage Drug Plan. Part D estimates weighted by enrollment in each year. *Prior to 2012, most Part D plans only had one generic tier, therefore the preferred/non-preferred designation is not applicable for amounts for 2006 & 2010, and the single generic tier amount is shown under preferred generic. SOURCE: Georgetown/Kaiser Family Foundation analysis of CMS 2006-2016 Part D plan data; data on employer plans from Kaiser/HRET Employer Health Benefits Survey, 2015.

Tiered Pharmacy Networks, New in 2011, are Now Common for PDPs Number of Medicare Part D Stand-Alone PDPs using Tiered Pharmacy Networks, 2011-2016 PDPs using tiered pharmacy networks Other PDPs 1,169 1,109 1,041 1,031 1,001 83 886 149 511 841 870 1,026 754 892 520 328 131 132 2011 2012 2013 2014 2015 2016 Share of PDPs with tiered 7% 14% 50% 72% 87% 85% pharmacy networks NOTE: PDP is prescription drug plan. Excludes plans in the territories. SOURCE: Georgetown/Kaiser Family Foundation analysis of CMS 2011-2016 Part D plan files.

Total Out-of-Pocket Drug Costs Vary Depending on Plan Selection Total annual out-of-pocket cost (including premiums) by mix of drugs across PDPs, 2016 Lowest cost in 2016 Highest cost in 2016 $20,000 $18,687 $14,600 $15,000 $10,995 $10,000 $5,605 $5,000 $5,433 $1,771 $3,451 $3,127 $1,697 $951 $0 Profile A: Alice Profile B: Bob Profile C: Carla Profile D: Dora Profile E: Earl NOTE: Analysis includes 20 national and near-national stand-alone prescription drug plans in Baltimore, MD (zip code 21201) and reflects pricing at a Rite Aid pharmacy in this zip code. SOURCE: Georgetown/Kaiser Family Foundation analysis of 2016 Medicare Plan Finder data.

Most Non-LIS Part D Enrollees Switch Plans Infrequently If At All Share of Non-LIS Part D Enrollees Continuously Enrolled in PDPs From 2006 to 2010 1 switch 19.1% 2 switches 6.2% 3 switches Never switched 2.2% 71.9% Switched every year 0.5% NOTES: LIS is Low-Income Subsidy. PDP is prescription drug plan. Analysis includes non-LIS Medicare Part D enrollees in a PDP continuously from 2006 to 2010 (n=313,418). See appendix (ADD LINK) for full methodology. SOURCE: Georgetown/NORC/Kaiser Family Foundation analysis of Medicare Beneficiary Summary Files and Plan Characteristics Files, 2006-2010.