Medicare Part D in the Face of Health Care Reform

Abstract

As the health care reform debate continues to dominate news during this period, it may be instructive to consider the most recent major health care insurance proposal enacted in the past 5 years. This is of course is the Medicare Part D Drug Benefit. Constructed during the previous administration and now in place since January 1,2006, the Medicare Part D program has a muddled track record of outcomes. In many ways, it provides an excellent case study of how not to implement a change in health care insurance. The Medicare Part D Program is a market-based model of a government subsidized health insurance program component. This program was enacted with much hype and very high expectations. The program has helped many Medicare recipients, provided a much needed impetus for pharmacy education and pharmacists to focus on outpatient pharmacy services necessary for patients, and provided an incredibly profitable program for health insurance companies providing Medicare Part D and/or Medicare Advantage Plans. A Kaiser Family Foundation analysis (1) indicates that the number of prescription drug plans available for low-income Medicare recipients decreased over a 3-year period between 2006 and 2009. In effect, 2 million low-income patients are now paying for coverage previously provided within the benefit, while close to 2 million other patients were reassigned to a different plan. (1) PHARMACY PARTICIPATION The percentage of pharmacy participation in Medicare Part D is very high; however, not all pharmacies are participants in each of the Medicare Part D prescription drug plans. The relatively low reimbursement rate, coupled with delays in payments for services provided, have challenged participating pharmacies. (2) Patient Benefit For the period of 2006-2009, the median premiums paid by beneficiaries increased by 35%.1 During 2008 2009 alone premiums increased by 17%. Cost-sharing requirements for recipients also increased by 35% over the 3-year period. (1) The Future The release of the latest Medicare Annual Report projects the Medicare hospital insurance (HI) trust fund will be exhausted by the year 2017. (3) The annual updating report from 2008 indicated solvency of the HI trust fund through 2019, so in a 1-year period (June 2008 to June 2009), a 2-year decrease has been projected. Medicare Part D, along with Medicare Part B, is funded through a supplementary medical insurance (SMI) fund that is separate from HI. Although SMI is projected to be solvent over the same time period as Medicare HI, the state of the economy, increased demand for services, and looming health care reform could change the metrics of SMI very quickly. Considering the viability of Medicare Part D in the context of the current health care milieu is one thing, however, with prospects of health care reform moving forward at an accelerated pace, current funding and future funding options might be dramatically challenged. HEALTH CARE REFORM The discussion of health care reform in the United States is carried out in a uniquely American context. The discussion is a parochial one, and examining systems in place internationally seems to be not an option. Curiously, successful options for care in the United Kingdom, Canada, Australia, and elsewhere have not been seriously considered. Change in options is okay if and only if current systems or insurers are retained in a system. When other countries have revised their health care systems, existing systems in place elsewhere were considered in crafting a new delivery and insurance structure. For example, Taiwan looked at the best options available in numerous systems when reforming its system of insurance and delivery of care. (4) Eight elements of health care reform receiving attention in the current US debate have included elements of the following: * Universal coverage (horizontal equity in health economics terms). …