What to Look for in a Medicare Prescription Drug Plan

 

Background

  • Approximately 43 million or 72% of the people on Medicare are enrolled in Medicare-approved Prescription Drug Plans (PDP)
  • If you have Original Medicare (with or without) a Medigap plan, you likely need a PDP to have drug coverage and avoid a future penalty.
  • You need to have a PDP from the month that you were initially eligible for Medicare, or 2006 when PDPs were first established.
  • Most Medicare Advantage Plans include prescription drug coverage along with medical coverage.
  • There are no annual maximum out-of-pocket prescription drug expenses for either Medicare Advantage or stand-alone PDPs. Original Medicare & Medigap plans do not cover prescription drug expenses.
  • Medicare-approved stand-alone PDPs are sold primarily by large, for-profit insurers such as Aetna, Cigna, CVS, Humana, and United HealthCare. Medicare enters into contracts with private insurers to provide PDPs that meet specific requirements. In return, the private insurers receive over $83 billion a year in taxpayer subsidies for PDPs.
  • Private insurers are also allowed to charge subscribers plan premiums, deductibles and co-pays/co-insurance for medications. They can also exclude specific drugs from their formulary, establish restrictions: such as requiring prior insurer authorization, limit medication quantities and require that subscribers take lower-cost drugs before higher-cost drugs.
  • Each insurer establishes their own drug classifications into pricing tiers and there are significant differences among PDPs regarding the drugs that are excluded/included and the premiums, deductibles, co-pays/coinsurance that subscribers are required to pay.
  • Although PDPs are not allowed to deny coverage or charge higher premiums to subscribers with pre-existing conditions and chronic diseases, insurers have latitude in establishing restrictions and subscriber charges.
  • Unlike the rest of the developed world, in the USA there is no public insurance for medications or government negotiation of drug prices with the exception of the VA. As a result, the cost of medications in the United States, to treat millions of Americans with life-threating diseases such as diabetes, cancers, multiple sclerosis, Hepatitis B, inflammatory diseases, respiratory diseases, organ transplants are the highest in the world. The cost of medications has become a huge burden on taxpayers; federal, state and local governments; employers; patients and families. This results in more costly health care with poorer outcomes, increases in disability, reduced work productivity and becomes a major cause of personal bankruptcies in the USA.
  • Medicare Quality Star Ratings -Medicare uses a Quality Star Rating System to measure how well Medicare Advantage and Part D plans perform. Medicare scores how well plans perform annually in several categories including quality of care and customer service. Ratings range from Poor (1 star), Below Average (2 Stars), Average (3 Stars), Above Average (4 Stars) and Excellent (5 Stars). Details of specific PDP and Medicare Advantage plan ratings are published on Medicare.gov.

A review of major insurers and their 23 PDPs in Upstate New York including plans by Aetna, Cigna, Express Scripts, Humana, SilverScripts, United HealthCare (UHC)  and WellCare reveal the following observations.

  • Each insurer generally offers 3 plans with different premiums and deductibles. Premiums range from $15.50 a month with a $415 deductible (WellCare Value Script) to $92.50/mo. with a $350 deductible (Express Scripts Medicare Choice)
  • Seven plans have no deductibles with premiums ranging from $39.70/mo.                    (SilverScriptsChoice) to $80./mo.(Humana Enhanced & SilverScript Allure).
  • The Medicare Quality Star ratings of plans vary from 3.5/5 Stars ( 3 SilverScript plans & UHC AARP Preferred) to low-rated plans (EnvisionRx Plus 1.5/5 & three Cigna plans 2/5 Stars). Other plans offered by Aetna, Humana, WellCare, and two UHC plans each received a 3 Star rating.
  • All insurers have developed strong financial disincentives for subscribers who use “non-preferred” brand name and generic medications by establishing medication exclusions, deductibles and up to 50% co-insurance for Tier 4 drugs.
  • Many insurers also charge higher prices for standard pharmacies and 30-day supplies with lower prices for “preferred” retail and mail-order pharmacies. However, many consumers and health care providers are unaware of what pharmacies are preferred and the cost differences that can be substantial.

PDPCostChronicDiseases

  • There are significant differences among insurers in the number of brand name and specialty drugs that are excluded in their formularies. Some diseases including rheumatoid arthritis, multiple sclerosis, diabetes and various neurological, cardiovascular, inflammatory, autoimmune and respiratory diseases have higher-cost Tier 4 & 5 medications and more excluded drugs than other conditions. This creates major conflicts among insurers, physicians and patients.
  • The co-insurance rate for Tier 4 “non-preferred generic and brand” medications in many cases is double the co-insurance rate for more costly Tier 5 specialty drugs. Many plans exclude specific medications or place them in Tier 4, that are used to treat common conditions such as diabetes, inflammatory, autoimmune and cardiovascular diseases in favor of other specific drugs sold by competitor drug companies. Insurers have increased “excluded medications” by 160% in the past 4 years and boast about saving billions of dollars each year by reducing access to treatment and raising patient expenses.

Differences in Subscribers Satisfaction with Plans

One dimension of Medicare’s quality ratings is the analysis of subscribers’ level of satisfaction with their specific PDP or Medicare Advantage plan. Medicare looks at a number of areas including quality of services and customer service. Two area that are important to look at include turnover rates (the percentage of subscribers who leave the plan) and the major reasons for leaving. The following analysis focuses on 23 PDP plans sold in Upstate New York.

SilverScript

  • SilverScript’s three plans: Choice ($37.90), Plus ($73.80) and Alure ($80/mo.) stand out from other plans in that they all have a 3.5/5 Star rating; none have deductibles and they have a low subscriber turnover rate of 6%  but 34% of subscribers who left complained about costs.

UHC

  • UHC AARP 3.5 Star Preferred plan ($77.70) with no deductible) and had a low 7% turnover rate but 56% of the people who left, complained about the high costs.
  • UHC other two plans: AARP Saver Plus ($59.90/mo. + a $415 deductible) and AARP Walgreens ($28.10/mo. + $415 a deductible) have a lower, 3 Star rating and 15% turnover rate with 45% of subscribers who left, complained about costs.

Humana

  • Humana‘s three plans earned 3 star Medicare ratings including its Walmart Rx ($35.70/mo.+ $415 deductible)Preferred Rx ($37.40/mo. + $415 deductible) and Enhanced ($80.50/mo. with no deductible. The plans all had 11% turnover and 31% subscriber complaints regarding costs.

WellCare

  • WellCare’s plans all were rated 3 stars rated and ranged in price from Value Script ($15.50/mo.+ $415 deductible), Classic ($37.90/mo.+ $415 deductible) and Extra ($81.50/mo. with no deductible) all had consistent turnover rates of 13% and 33% complaints about costs.

Aetna

  • Aetna’s 3 star Select ($17.70/mo. + $330 deductible) had 12% turnover and 33% complaints about costs while their 3-star Value Plus plan ($58.80/mo. with no deductible) had 24% turnover and 53% complaints about costs.

In summary, in considering PDPs it is important to confirm if the plans:

  • Include your medications and at what costs
  • Have a deductible expense on your drugs;
  • Have restrictions on access to your medications,
  • Have preferred retail and mail-order pharmacies,
  • Have high subscriber turnover and/or have other significant negative issues identified by subscribers and/or Medicare.

And finally, what is the total annual cost to receive your medications from each plan and the comparative differences in quality, costs and benefits.

Resources

Free resources are available to help you in comparing costs among plans. These include:

Medicare Plan Finder

Provides detailed information from Medicare to compare Quality Star ratings, your estimated annual and monthly cost (premiums, deductibles, co-pays/co-insurance) for your specific medications and pharmacies among available Prescription Drug Plans and Medicare Advantage Plans sold in your community.

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State Health Insurance Assistance Program

Provides free personal and group information/assistance with Medicare issues and questions.

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MedicareRights

Helps people with Medicare understand their rights and benefits, and navigate the Medicare system

References

Congressional Budget Office, 2018 reports

Kaiser Family Foundation, 2018 Data Briefs and Fact Sheets

Medicare.gov

Medicare Rights Center

Medicare Trust Fund Board of Trustees, 2018 Annual Report

The Doctor-Patient Rights Project