What's HAPpening:
Policy Reports & Media Syntheses

Date: October 31, 2008
Title: Medicare drug plan spending drops $6B in 2008, USA Today
Author: Dennis Cauchon

Summary: Two years after the implementation of the Part D prescription drug program, reports show that the program cost $44 billion in 2008, some $30 billion less that the Congressional Budget Office predicted when the program first begin. The cost-savings are attributed to the increased use of generic drugs, fewer than anticipated enrollees, and seniors cutting costs to stay out of the “doughnut hole.”

Impact: This savings is not expected to last forever. As “the first of 79 million Baby Boomers start entering the program in 2011,” costs are expected to rise. This may also affect the demand on SHIPs as newly eligible seniors enroll in Part D for the first time.

Summary: The Social Security Administration announced its annual cost of living adjustment to payments this week.  The 5.8 percent adjustment represents the largest jump since the 7.4 percent increase in 1982. Currently, 55 million Americans receive Social Security benefits or Supplemental Security Income payments.

Impact: Seniors on fixed incomes have been particularly hard hit by the economic downturn and are struggling to keep up with rising costs.  The 5.8 percent increase in Social Security payments is welcome news.

Impact: Now that the bill is law, SHIPs will receive an additional $7.5 million for Fiscal Year 2009, some of which will have to go toward low-income outreach around the Part D Low-income Subsidy (LIS) and Medicare Savings Programs (MSPs). In addition, the law will raise the asset limits for MSPs and simplify the LIS application. Learn more about this law in HAP's SHIP Funding Resource Center.

Date: March 25, 2008
Title: Social Security and Medicare Trustees' Report
Author: Social Security and Medicare Trustees

Summary: Medicare trustees reported that Medicare's hospital insurance fund will be expended by 2019. Medicare Part A's hospital insurance is already paying out more in benefits than it collects from payroll taxes.

Impact: The shortfall could result in future cuts in Medicare benefits unless Congress acts to change eligibility requirements, benefit levels, or the overall structure of Medicare financing.

Date: March 2008
Title: Racial and Ethnic Disparities in U.S. Health Care: A Chartbook, The Commonwealth Fund
Author: Holly Mead, Ph.D., Lara Cartwright-Smith, J.D., Karen Jones, M.S., Christal Ramos, Kristy Woods, M.D., M.P.H, and Bruce Siegel, M.D., M.P.H.

Summary: This chartbook highlights the disparities among various racial and ethnic groups—White, Black, Hispanic, Native American, and Asian—in health status and mortality, access to care, health insurance coverage, and quality of care. Overall, minority populations are more likely than whites to report their health status as less than good, be obese, have a chronic condition or disability, and forego needed care. The chartbook also provides demographic data. Findings of note are:

• Minority groups will compose almost half of the U.S. population by 2050, compared to one-third of the population in 2005.
• Blacks and Hispanics are twice as likely to live in poverty as Whites and Asians (2004).
• Blacks and Hispanics have lower educational levels than Whites and Asians (2003).

Impact: SHIPs already serve a diverse Medicare population with different backgrounds, as well as different health and financial needs. As the U.S. population continues to become more diverse, SHIPs will play a critical role in helping Medicare beneficiaries access the health care services to which they are entitled, as well as educating them about programs that can help with their health care costs.

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Date: January 23, 2008
Title: Do We Know if Medicare Advantage Special Needs Plans Are Special?, The Kaiser Family Foundation
Author: James Verdier, Marsha Gold, Sarah Davis (all of Mathematica Policy Research, Inc.)

Summary: According to this report, it is still not clear what, if any, added value Special Needs Plans (SNPs) provide to Medicare beneficiaries. Despite this, the number of SNPs offered is expected to increase by 62% from 477 plans in 2007 to 772 plans in 2008 and SNP enrollment increased by more than 100% from July 2006 (531,507) to November 2007 (1,080,593).

The author's analysis of November 2007 data shows the following results:

• SNP enrollees account for 12 percent of total MA enrollees.
• It appears that only about half of enrollees "actively" chose to enroll in a SNP.
• More than 1 in 2 SNP enrollees (59 percent) live in nine states (AZ, CA, FL, MN, NY, OR, PA, TN, TX) and another 23 percent (almost 250,000) are in Puerto Rico.

According to the report, "Current MA monitoring information, particularly that made public, makes it difficult to determine whether SNPs are doing anything special, since SNP-specific quality and performance measures are limited." CMS is currently working on performance reporting requirements with the National Committee for Quality Assurance (NCQA).

The report also provides state-level information including:

• Indicators of a state's current or potential interest in contracting with SNPs,
• Total MA and SNP enrollment by state, and
• Dual-eligibles SNP share of total MA enrollment for multi-state MA companies by state.

Impact: Due to limited information about the value of SNPs and limited requirements of the plans by CMS, SHIP counselors face substantial challenges educating and counseling Medicare beneficiaries, and beneficiaries likely cannot make informed decisions about whether-or-not SNPs are a better option than other MA plans. Furthermore, SHIPs are often faced with helping beneficiaries disenroll from their plan, which as the report points out, “disenrollment as the main means of dealing with bad choices is a limited form of protection against such choices.”

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Summary: The GAO provides information on Part D sponsors' processes for the following:

• Coverage determinations and rates of approval,
• Appeals processes and rates of approval for sponsors and the Independent Review Entity (IRE), and
• CMS' oversight of sponsors and public information efforts about sponsors' performance.

Results shown within the study's time frame:

• Coverage determinations are processed automated, and roughly two-thirds of coverage determinations were approved.
• The median approval rate for appeals of denied coverage was 40 percent.
• Lack of completed Appointment of Representative forms led to delays in processing appeals or denials of coverage.

CMS has improved methods of providing information on sponsors’ performance; however, CMS has limited oversight on sponsors’ performance measures due to a number of factors.

Outcome: The GAO made two recommendations to CMS based on study’s findings study. CMS has acted on one recommendation—to clearly define the reporting requirements for sponsors in order to monitor them more accurately. The GAO also recommended that CMS require sponsors and the IRE to call beneficiaries when a coverage determination or appeal is filed on their behalf without the Appointment of Representative form; CMS is examining this recommendation.

Date: December 17, 2007
Title: For Recipients of Medicare, the Hard Sell, The New York Times
Author: Robert Pear

Summary: Based on a lead from a Medicare advocate after HAP's November conference call, the New York Times contacted HAP to gather background information about issues related to marketing of Medicare Advantage plans. This article provides a number of real-life scenarios depicting Medicare beneficiaries experiencing aggressive, if not rule-breaking, sales tactics. While mis-marketing was well documented earlier in 2006 and 2007, this article captures events occurring since the commencement of marketing for 2008 plans in October.

Impact: The SHIP Network have reported marketing abuses and aggressive sales tactics. While CMS has taken steps to address the concerns of SHIPs and consumers, SHIPs continue to provide counseling and assistance to beneficiaries affected by such practices.

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