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Supporting High-Value Part D Medicare Choices for Low-Income Beneficiaries: Comment on “Cognition and Take-up of Subsidized Drug Benefits by Medicare Beneficiaries”

Supporting High-Value Part D Medicare Choices for Low-Income Beneficiaries: Comment on “Cognition... The Medicare outpatient prescription drug benefit (Part D), established as a voluntary program by the Medicare Modernization Act of 2003 with coverage starting in 2006, filled an important gap in the affordability of medical care for older Americans. All 49 million elderly and disabled Medicare beneficiaries have access to the drug benefit through private plans approved by the federal government. The standard benefit in 2013 has a $325 deductible and 25% coinsurance up to an initial coverage limit of $2970 in total drug costs. After this limit is reached, enrollees are responsible for a larger share of their drug costs until they reach out-of-pocket costs of $4750. Following this coverage gap, more generous benefits resume. Although the Patient Protection and Affordable Care Act of 2010 (ACA) made some important changes to Part D, in particular phasing out the coverage gap (or “doughnut hole”) by 2020, the cost of premiums, deductibles, and coinsurance still are a major obstacle to obtaining medications for many Medicare beneficiaries. To ease the financial barrier to prescription medication coverage, Medicare beneficiaries with low incomes are eligible for the low-income subsidy (LIS). While those receiving Medicaid and patients with disabilities are automatically subsidized, others must apply and pass a means test. In 2010, of 29.7 million Part D enrollees, 11.3 million (38%) received the subsidy.1 The Center for Medicare & Medicaid Services (CMS) estimated that, in 2011, the average value of the subsidy was about $4000.2 However, despite this substantial incentive to apply for a subsidy, the CMS estimates that only 35% to 40% of low-income beneficiaries who are eligible but must apply on their own received the subsidy each year from 2006 to 2009.3 Millions of eligible seniors have not applied because of lack of awareness of the subsidy (despite the federal government's outreach efforts), uncertainty about how to apply, reluctance to share financial information, a belief that their income or assets are too high, and the complexity of gathering the information for the application. An article in this issue suggests that cognitive impairment and lack of numeracy may also contribute to low subsidy application rates.4 Kuye et al4 analyzed data from the 2006, 2008, and 2010 waves of the Health and Retirement Study (HRS) and used reports of income and assets to identify respondents who were likely eligible for the full subsidy but would not qualify for automatic enrollment. Although they attempted to exclude respondents with other sources of insurance coverage that would make them less likely to need Part D coverage, 42% of their sample reported that they were not enrolled in Part D. Furthermore, 77% reported that they did not apply for the LIS, although over 90% used prescription drugs regularly. Using HRS survey data on measures of cognition and numeracy, the authors found that higher cognition was associated with greater likelihood of Part D enrollment and LIS awareness and application. Better numeracy skills were associated with higher Part D enrollment and LIS application. The study extends previous findings from this same survey showing that lower cognitive function is associated with lower likelihood of choosing a Medicare Advantage plan with more generous benefits over traditional fee-for-service Medicare,5 purchasing supplemental Medigap insurance,6 and enrolling in Part D in 2006.7 The CMS estimates that 90% of Medicare beneficiaries in 2010 were either enrolled in Part D or had another source of drug coverage with benefits equal to or better than Part D.1 Thus, it is somewhat surprising given the exclusions that Kuye et al4 used that 42% of low-income seniors reported not being enrolled in Part D. This could be due to genuinely lower Part D enrollment in this low-income sample, inaccurate self-reports, or missing data on other sources of prescription drug coverage. Their finding that only 23% of those likely to be eligible for the subsidy reported applying is also lower than the CMS's estimate that 40% of the eligible population received the LIS from 2006 to 2009. However, the CMS estimates may lack precision because they are based on US Census Bureau data rather than beneficiary income data. There is little reason to be optimistic that the situation will improve without new methods to encourage subsidy enrollment. Growth in the unsubsidized Part D program ranged from 6% to 10% per year from 2006 to 2009, but subsidized Part D enrollment grew by only 2% during this time. The growth was 3% among subsidized enrollees and 4% in unsubsidized enrollees in 2010.1 The complexity of navigating Part D may be further compounded by some rules that affect subsidy beneficiaries, many of whom must change plans regularly to remain in a plan without a premium.3 Changing plans may disrupt access to medications owing to differences in formularies and utilization management procedures, especially when reassignment to a new plan is random, as it was for 1.2 million low-income beneficiaries in 2010. Many beneficiaries when given a choice stay with their old plan even though it means paying premiums previously covered by the subsidy, and few who are reassigned change plans, even though it is permitted. Beneficiaries' difficulty in optimizing plan choice and their reluctance to switch plans even when it could save money or offer better drug coverage for their needs suggests that we need new strategies to improve the Part D program, especially for low-income beneficiaries.8 Common-sense remedies include changing the subsidy to an opt-in program, simplifying the process of applying for the subsidy, and replacing random assignment with beneficiary-centered assignment.3,4,9 More broadly, findings from implementing the market-based Part D benefit have implications for state health insurance exchanges being created under the ACA. This experience suggests that many consumers may not apply for subsidized benefits to which they are entitled. Moreover, to ensure that consumers obtain the best plan, they will need a trusted advisor to evaluate, compare, and offer a reasonably limited set of the best insurance choices.10 Passing legislation creating health insurance programs is only the first step in enabling low-income persons to benefit from these programs. It is equally important to implement programs that include multilingual general education, outreach to affected populations, and direct assistance to those who on their own cannot navigate complex program design and application procedures. Failure to take these steps risks compounding disparities in health care by creating programs that disproportionately exclude those with less education, cognitive impairment, and fewer social resources. Back to top Article Information Correspondence: Dr Margolis, 8170 33rd Ave S, MS21111R, Minneapolis, MN 55425 (karen.l.margolis@healthpartners.com). Published Online: May 6, 2013. doi:10.1001/jamainternmed.2013.6809 Conflict of Interest Disclosures: None reported. References 1. Medicare Payment Advisory Commission. A databook: health care spending and the Medicare program, 2012. http://www.medpac.gov/documents/Jun12DataBookEntireReport.pdf. Accessed April 3, 2013 2. Centers for Medicare & Medicaid Services. Premiums for Medicare prescription drug plans to remain low in 2011 [press release]. August 18, 2010 3. Summer L, Hoadley J, Hargraye E. The Medicare part D low-income subsidy program: experience to date and policy issues for consideration. Washington, DC: Henry J. Kaiser Family Foundation; 2010. http://www.kff.org/medicare/upload/8094.pdf. Accessed April 3, 2013 4. Kuye IO, Frank RG, McWilliams JM. Cognition and take-up of subsidized drug benefits by Medicare beneficiaries [published online May 6, 2013]. JAMA Intern Med. 2013;173(12):1100-1107Google Scholar 5. McWilliams JM, Afendulis CC, McGuire TG, Landon BE. Complex Medicare advantage choices may overwhelm seniors—especially those with impaired decision making. Health Aff (Millwood). 2011;30(9):1786-179421852301PubMedGoogle ScholarCrossref 6. Chan S, Elbel B. Low cognitive ability and poor skill with numbers may prevent many from enrolling in Medicare supplemental coverage. Health Aff (Millwood). 2012;31(8):1847-185422869664PubMedGoogle ScholarCrossref 7. Levy H, Weir DR. Take-up of Medicare part D: results from the health and retirement study. J Gerontol B Psychol Sci Soc Sci. 2010;65(4):492-50120034992PubMedGoogle ScholarCrossref 8. Polinski JM, Bhandari A, Saya UY, Schneeweiss S, Shrank WH. Medicare beneficiaries' knowledge of and choices regarding Part D, 2005 to the present. J Am Geriatr Soc. 2010;58(5):950-96620406313PubMedGoogle ScholarCrossref 9. Summer L, Nemore P, Finberg J. Medicare Part D: how do vulnerable beneficiaries fare? Issue Brief (Commonw Fund). 2008;35:1-1118536146PubMedGoogle Scholar 10. Day R, Nadash P. New state insurance exchanges should follow the example of Massachusetts by simplifying choices among health plans. Health Aff (Millwood). 2012;31(5):982-98922566437PubMedGoogle ScholarCrossref http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png JAMA Internal Medicine American Medical Association

Supporting High-Value Part D Medicare Choices for Low-Income Beneficiaries: Comment on “Cognition and Take-up of Subsidized Drug Benefits by Medicare Beneficiaries”

Margolis, Karen L.
JAMA Internal Medicine , Volume 173 (12) – Jun 24, 2013
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References (12)

Publisher
American Medical Association
Copyright
Copyright © 2013 American Medical Association. All Rights Reserved.
ISSN
2168-6106
eISSN
2168-6114
DOI
10.1001/jamainternmed.2013.6809
Publisher site
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Abstract

The Medicare outpatient prescription drug benefit (Part D), established as a voluntary program by the Medicare Modernization Act of 2003 with coverage starting in 2006, filled an important gap in the affordability of medical care for older Americans. All 49 million elderly and disabled Medicare beneficiaries have access to the drug benefit through private plans approved by the federal government. The standard benefit in 2013 has a $325 deductible and 25% coinsurance up to an initial coverage limit of $2970 in total drug costs. After this limit is reached, enrollees are responsible for a larger share of their drug costs until they reach out-of-pocket costs of $4750. Following this coverage gap, more generous benefits resume. Although the Patient Protection and Affordable Care Act of 2010 (ACA) made some important changes to Part D, in particular phasing out the coverage gap (or “doughnut hole”) by 2020, the cost of premiums, deductibles, and coinsurance still are a major obstacle to obtaining medications for many Medicare beneficiaries. To ease the financial barrier to prescription medication coverage, Medicare beneficiaries with low incomes are eligible for the low-income subsidy (LIS). While those receiving Medicaid and patients with disabilities are automatically subsidized, others must apply and pass a means test. In 2010, of 29.7 million Part D enrollees, 11.3 million (38%) received the subsidy.1 The Center for Medicare & Medicaid Services (CMS) estimated that, in 2011, the average value of the subsidy was about $4000.2 However, despite this substantial incentive to apply for a subsidy, the CMS estimates that only 35% to 40% of low-income beneficiaries who are eligible but must apply on their own received the subsidy each year from 2006 to 2009.3 Millions of eligible seniors have not applied because of lack of awareness of the subsidy (despite the federal government's outreach efforts), uncertainty about how to apply, reluctance to share financial information, a belief that their income or assets are too high, and the complexity of gathering the information for the application. An article in this issue suggests that cognitive impairment and lack of numeracy may also contribute to low subsidy application rates.4 Kuye et al4 analyzed data from the 2006, 2008, and 2010 waves of the Health and Retirement Study (HRS) and used reports of income and assets to identify respondents who were likely eligible for the full subsidy but would not qualify for automatic enrollment. Although they attempted to exclude respondents with other sources of insurance coverage that would make them less likely to need Part D coverage, 42% of their sample reported that they were not enrolled in Part D. Furthermore, 77% reported that they did not apply for the LIS, although over 90% used prescription drugs regularly. Using HRS survey data on measures of cognition and numeracy, the authors found that higher cognition was associated with greater likelihood of Part D enrollment and LIS awareness and application. Better numeracy skills were associated with higher Part D enrollment and LIS application. The study extends previous findings from this same survey showing that lower cognitive function is associated with lower likelihood of choosing a Medicare Advantage plan with more generous benefits over traditional fee-for-service Medicare,5 purchasing supplemental Medigap insurance,6 and enrolling in Part D in 2006.7 The CMS estimates that 90% of Medicare beneficiaries in 2010 were either enrolled in Part D or had another source of drug coverage with benefits equal to or better than Part D.1 Thus, it is somewhat surprising given the exclusions that Kuye et al4 used that 42% of low-income seniors reported not being enrolled in Part D. This could be due to genuinely lower Part D enrollment in this low-income sample, inaccurate self-reports, or missing data on other sources of prescription drug coverage. Their finding that only 23% of those likely to be eligible for the subsidy reported applying is also lower than the CMS's estimate that 40% of the eligible population received the LIS from 2006 to 2009. However, the CMS estimates may lack precision because they are based on US Census Bureau data rather than beneficiary income data. There is little reason to be optimistic that the situation will improve without new methods to encourage subsidy enrollment. Growth in the unsubsidized Part D program ranged from 6% to 10% per year from 2006 to 2009, but subsidized Part D enrollment grew by only 2% during this time. The growth was 3% among subsidized enrollees and 4% in unsubsidized enrollees in 2010.1 The complexity of navigating Part D may be further compounded by some rules that affect subsidy beneficiaries, many of whom must change plans regularly to remain in a plan without a premium.3 Changing plans may disrupt access to medications owing to differences in formularies and utilization management procedures, especially when reassignment to a new plan is random, as it was for 1.2 million low-income beneficiaries in 2010. Many beneficiaries when given a choice stay with their old plan even though it means paying premiums previously covered by the subsidy, and few who are reassigned change plans, even though it is permitted. Beneficiaries' difficulty in optimizing plan choice and their reluctance to switch plans even when it could save money or offer better drug coverage for their needs suggests that we need new strategies to improve the Part D program, especially for low-income beneficiaries.8 Common-sense remedies include changing the subsidy to an opt-in program, simplifying the process of applying for the subsidy, and replacing random assignment with beneficiary-centered assignment.3,4,9 More broadly, findings from implementing the market-based Part D benefit have implications for state health insurance exchanges being created under the ACA. This experience suggests that many consumers may not apply for subsidized benefits to which they are entitled. Moreover, to ensure that consumers obtain the best plan, they will need a trusted advisor to evaluate, compare, and offer a reasonably limited set of the best insurance choices.10 Passing legislation creating health insurance programs is only the first step in enabling low-income persons to benefit from these programs. It is equally important to implement programs that include multilingual general education, outreach to affected populations, and direct assistance to those who on their own cannot navigate complex program design and application procedures. Failure to take these steps risks compounding disparities in health care by creating programs that disproportionately exclude those with less education, cognitive impairment, and fewer social resources. Back to top Article Information Correspondence: Dr Margolis, 8170 33rd Ave S, MS21111R, Minneapolis, MN 55425 (karen.l.margolis@healthpartners.com). Published Online: May 6, 2013. doi:10.1001/jamainternmed.2013.6809 Conflict of Interest Disclosures: None reported. References 1. Medicare Payment Advisory Commission. A databook: health care spending and the Medicare program, 2012. http://www.medpac.gov/documents/Jun12DataBookEntireReport.pdf. Accessed April 3, 2013 2. Centers for Medicare & Medicaid Services. Premiums for Medicare prescription drug plans to remain low in 2011 [press release]. August 18, 2010 3. Summer L, Hoadley J, Hargraye E. The Medicare part D low-income subsidy program: experience to date and policy issues for consideration. Washington, DC: Henry J. Kaiser Family Foundation; 2010. http://www.kff.org/medicare/upload/8094.pdf. Accessed April 3, 2013 4. Kuye IO, Frank RG, McWilliams JM. Cognition and take-up of subsidized drug benefits by Medicare beneficiaries [published online May 6, 2013]. JAMA Intern Med. 2013;173(12):1100-1107Google Scholar 5. McWilliams JM, Afendulis CC, McGuire TG, Landon BE. Complex Medicare advantage choices may overwhelm seniors—especially those with impaired decision making. Health Aff (Millwood). 2011;30(9):1786-179421852301PubMedGoogle ScholarCrossref 6. Chan S, Elbel B. Low cognitive ability and poor skill with numbers may prevent many from enrolling in Medicare supplemental coverage. Health Aff (Millwood). 2012;31(8):1847-185422869664PubMedGoogle ScholarCrossref 7. Levy H, Weir DR. Take-up of Medicare part D: results from the health and retirement study. J Gerontol B Psychol Sci Soc Sci. 2010;65(4):492-50120034992PubMedGoogle ScholarCrossref 8. Polinski JM, Bhandari A, Saya UY, Schneeweiss S, Shrank WH. Medicare beneficiaries' knowledge of and choices regarding Part D, 2005 to the present. J Am Geriatr Soc. 2010;58(5):950-96620406313PubMedGoogle ScholarCrossref 9. Summer L, Nemore P, Finberg J. Medicare Part D: how do vulnerable beneficiaries fare? Issue Brief (Commonw Fund). 2008;35:1-1118536146PubMedGoogle Scholar 10. Day R, Nadash P. New state insurance exchanges should follow the example of Massachusetts by simplifying choices among health plans. Health Aff (Millwood). 2012;31(5):982-98922566437PubMedGoogle ScholarCrossref

Journal

JAMA Internal Medicine – American Medical Association

Published: Jun 24, 2013

Keywords: cognition,medicare,medicare part c,low income

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