There were many unknowns as Medicare Part D rolled out. However, some answers are now available, including how many of those who were eligible enrolled and which plans they chose.
The 1,429 stand-alone prescription drug plans (PDPs) participating in 2006 were offered by 65 different firms. However, 1,222 of them came from one of 14 national, or near national, organizations, including the major insurance companies and pharmacy benefit managers. The available choices ranged from 27 PDPs in Alaska to 52 in Pennsylvania and West Virginia. Medicare Advantage (MA) plans are required to include a drug benefit option to their offering and, on average, they added 2.4 regional managed care plans to the choice mix.
PDP monthly premiums averaged $32, but they ranged from $2 to $100. The majority of plans adopted a tiered copayment structure rather than the $250 deductible and coinsurance in the standard plan. Few plans pay for drugs after members reach the coverage gap, or doughnut hole. The plans that cover both brand and generic drugs in the gap average premiums of $61 per month.
Those counted as having credible coverage fall into three groups. The first group includes 22.5 million persons enrolled in Medicare Part D plans, of whom 10.4 million enrolled voluntarily, 6.6 million were auto-enrolled to PDPs, and 5.5 million enrolled in MA plans. The second group includes 10.4 million retirees with plans either from the private (6.9 million) or public sector (3.5 million). The third group includes 5.4 million persons with benefits from part-time employment, state assistance programs, and other sources.
Total enrollment numbers are important, in addition to the number and mix who enrolled. Maximum and stable enrollment will affect the amount that beneficiaries pay in monthly premiums over time, the overall cost of the program, and future plan participation.
There are several ways to interpret the enrollment statistics, depending on your criteria for initial success. One goal of the Medicare Modernization Act was to reduce the number of persons without comprehensive prescription drug coverage. The share of Medicare beneficiaries with credible coverage was estimated at 60% of the population when enrollment opened and 90% when it ended. It is not possible to say how many of the 10.4 million persons who enrolled in PDPs are newly covered and how many had prior coverage. The prior status of the 1.2 million additional persons who joined MA plans likewise is unknown.
Enrolling those with low income was a priority. Initial estimates were that 4.6 million people would apply and receive supplemental assistance. But the estimates were based on income tax reports and Social Security payments, and eligibility was determined by both income and assets. Somewhat surprisingly, only 1.4 million persons were deemed eligible out of the first 4.1 million applicants for the subsidy. After eliminating duplicate applications and those who had been auto-enrolled, it was found that persons who were deemed ineligible either had excess resources (57%), excess income (32%), or an excess of income and assets (11%).
The number of persons eligible for a subsidy but who did not enroll or who are straining to pay the full premium is of concern. According to a nationwide survey conducted in mid-June 2006, only one-third of those eligible for special assistance were aware of the provision. It is thought that 75% of those who did not enroll are persons eligible for the subsidy.
The same national survey found that 80% of enrolled seniors were satisfied with their plan, and 75% said they would make the same choice again. About 28% of enrollees had used the benefit, and nearly half of them said they were saving money on their prescription drugs. However, two-thirds of respondents did not know about the coverage gap and few had reached that threshold at the time of the survey. About 18% reported that they had experienced a "major problem" using their plan.
It remains to be seen whether the benefit will be considered an efficient use of public dollars and whether it meets the needs of beneficiaries, particularly those with low incomes. The stability of program and beneficiary satisfaction not only will drive the benefits and premiums in future years but will have political ramifications as well. Answers to questions like these will be coming with the first open-enrollment period approaching in November.
THE AUTHOR is associate professor, Department of Pharmacy Health Care Administration, University of Florida College of Pharmacy.