Unformatted text preview: Chapter 12 References GCRP 2014. citing Beck, P.S.A., G.P. Juday, C. Alix, V.A. Barber, S.E. Winslow, E.E. Sousa, P. Heiser, J.D.
Herriges, and S.J. Goetz. 2011. Changes in Forest Productivity across Alaska Consistent with Biome
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Technical Input to the 2013 National Climate Assessment. Island Press. Washington D.C. Last
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Congestion and Reliability: Trends and Advanced Strategies for Congestion Mitigation. U.S.
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Shifts of Species Associated with High Levels of Climate Warming. Science 333:1024–1026.
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2009. Projecting Global Marine Biodiversity Impacts under Climate Change Scenarios. Fish and
Fisheries 10:235–251. 12-34 FIGURE Updating... X-X FIGURE 14–1 Part D’s defined standard benefit before and after introduction of the
manufacturers’ discount on brand-name drugs in the coverage gap $12,000 Individual enrollee’s gross drug spending Medicare reinsurance Plan liability Enrollee cost sharing Manufacturer discount $10,000 $8,000 Out-of-pocket
threshold $6,000 $4,000 Coverage
limit $2,000 Deductible $0
2006 Note: 2011 “Gross drug spending” refers to amounts paid at the pharmacy before rebates and discounts. The coverage-gap phase (between the initial coverge limit and out-ofpocket threshold) is depicted as it would apply to brand-name drugs for an enrollee who does not receive Part D’s low-income subsidy (LIS). Non-LIS enrollees’ cost
sharing for generic drugs in the coverage gap was 100 percent in 2006 and 93 percent in 2011. Source: MedPAC depiction of Part D benefit structure as set by law. a sponsor offers a PDP with basic benefits in a region,
it can also offer up to two “enhanced-alternative” PDPs
that combine basic benefits with supplemental coverage.
For 2019, estimated OOP costs between a sponsor’s
Note: In InDesign.
basic and enhanced plans must differ by at least $22 per
month. CMS no longer requires plan sponsors to maintain
a meaningful difference in OOP costs between two
Changes to Part D’s coverage gap The policymakers who designed Part D wanted to provide
both basic coverage for most enrollees who have relatively
low drug spending as well as some catastrophic protection
for enrollees with high drug costs. For this reason, the
defined standard basic benefit initially covers 75 percent of drug spending above the deductible and all but 5
percent coinsurance once an enrollee reaches the OOP
threshold. That threshold is known as “true OOP” because
it excludes cost sharing paid on behalf of a beneficiary by
most sources of supplemental coverage, such as employersponsored policies and enhanced-alternative plan benefits.
However, the policymakers who designed Part D also
needed to keep program costs within an agreed-on
spending target (Blum 2009). For this reason, before 2011,
enrollees with spending that exceeded the initial coverage
limit were responsible for paying a prescription’s full price
at the pharmacy up to the OOP threshold. That is, the
enrollee’s cost sharing rose from 25 percent in the initial
coverage phase to 100 percent until he or she reached the
OOP threshold (left-hand side of Figure 14-1). A number Report to the Congress: Medicare Payment Policy | March 2019 391 Chapter 12 References GCRP 2014. citing Chokshi, D.A. and T.A. Farley. 2012. The Cost-Effectiveness of Environmental
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Predictions: Biodiversity Conservation in a Changing Climate. Science 332:53–58.
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Field and Climate-based Model for Predicting the Density of Host-seeking Nymphal Ixodes
Scapularis, An Important Vector of Tick-borne Disease Agents in the Eastern United States. Global
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Stable States on Coral Reefs. Marine Ecology Progress Series 413:201–216.
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2002. Responses in the Start of Betula (birch) Pollen Seasons to Recent Changes in Spring
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Fuel Economy for Model Years 2017–2025 Cars and Light Trucks. U.S. Environmental Protection
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Aviation Administration. 12-35 FIGURE Updating... X-X FIGURE 14–2 Part D’s discount on brand-name drugs in the coverage gap and
defined standard benefit structure has changed over time Individual enrollee’s gross drug spending $12,000
Medicare reinsurance Plan liability Enrollee cost sharing Manufacturer discount Out-of-pocket
threshold $10,000 $8,000 Coverage
$6,000 35% 25% Initial
limit $4,000 $2,000 Deductible $0
2018 Note: 2019 2020 “Gross drug spending” refers to amounts paid at the pharmacy before postsale rebates and discounts. The amount of drug spending at which a beneficiary reaches
the out-of-pocket (OOP) threshold depends on the mix of brand-name and generic prescriptions he or she fills in the coverage gap. The coverage-gap phase (between
the initial coverge limit and OOP threshold) is depicted as it would apply to brand-name drugs for an enrollee who does not receive Part D’s low-income subsidy (LIS).
Non-LIS enrollees’ cost sharing for generic drugs in the coverage gap was 44 percent in 2018, is 37 percent in 2019 and will be 25 percent in 2020. Source: MedPAC depiction of Part D benefit structure as set by law. of studies suggested that higher cost sharing in this
gap (also called the “donut hole”) decreased rates
of medication adherence, primarily for brand-name drugs
(Fung et al. 2010, Yu et al. 2016, Zhang et al. 2013, Zhang
et al. 2009). Compared with commercial insurance, Part
D’s benefit structure is unusual because of the coverage
gap. Note: The coverage gap affects enrollees’ OOP spending
differently depending on whether the beneficiary receives
the LIS. Under law, LIS enrollees experience no coverage
gap; Medicare’s low-income cost-sharing subsidy pays for
100 percent of most enrollees’ costs during the coverage- 392 The Medicare prescription drug program (Part D): Status report gap phase minus their nominal copayments. Manufacturers
of brand-name drugs are not required to pay any discount
for LIS enrollees during the coverage gap, and plan
sponsors are not liable for covered benefits until the LIS
enrollee reaches the OOP threshold. Although Part D’s
cost-sharing assistance offsets the higher burden that LIS
enrollees would otherwise face, the current structure of the
subsidies may be creating plan and beneficiary incentives
that lead to higher program costs (see text box, p. 394).
The Patient Protection and Affordable Care Act of 2010
(PPACA) called for gradually lowering cost sharing
in the coverage gap from 100 percent to 25 percent by ...
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