JustCare

Tag: Out-of-pocket cap

  • Even with Medicare, older adults struggle to afford their care

    Even with Medicare, older adults struggle to afford their care

    Maggie Shaw writes in AJMC  about new findings reported in the Annals of Internal Medicine that many older adults struggle to pay the $1,600 Medicare Part A deductible. These findings corroborate a slew of earlier findings that cost is a barrier to care for people with Medicare, be they in traditional Medicare or Medicare Advantage.

    Most people in traditional Medicare have supplemental coverage to pick up those costs, either through Medigap, insurance they buy to fill coverage gaps, Medicaid, if their income is low, or retiree coverage from their jobs. How many people in Medicare Advantage can afford their care?

    Cost is a barrier to care for far too many people with Medicare, whether they are in traditional Medicare or Medicare Advantage. Traditional Medicare needs an out-of-pocket limit so that people who cannot get supplemental coverage still have financial protection. Usually, they sign up for Medicare Advantage, thinking they have protection because it does have an out-of-pocket cap.

    But, in Medicare Advantage, people are too often denied the care they need or forced to go through too many hoops to get their Medicare Advantage plan to cover their care. Moreover, when it is covered, they can have high out-of-pocket costs and they can’t get supplemental coverage to fill cost gaps. We have only a limited understanding of how often that leads Medicare Advantage enrollees to forego needed care.

    The AJMC study found that between a third and a half of all people with Medicare lack financial stability. Black and Hispanic adults with Medicare are particularly at risk financially; many do not have supplemental coverage. An NBER study a few years back found that even a $10 copay increase for prescription drugs under Medicare Part D led many to stop filling their prescriptions.

    The people most at risk in Medicare have incomes too high to qualify for Medicaid, up to 400 percent of the federal poverty level. Some of them qualify for Medicare Savings Programs that help with their costs. But, this help is not automatic and too often they do not apply for these programs. It’s a hassle.

    Instead, people with Medicare are left without needed care. The authors recommend that policymakers either make it easier for people with low incomes to qualify for help with their out-of-pocket costs or add an out-of-pocket maximum to Medicare.

    Here’s more from Just Care:
  • Insulin costs: Biden v. Trump

    Insulin costs: Biden v. Trump

    If you are looking for our next president to lower your health care costs, there are multiple reasons to support President Biden over Donald Trump. One is insulin. Though Trump would like you to think otherwise, Juliette Cubanski and Tricia Neuman explain in a KFF report that Donald Trump did far less to contain the cost of insulin than President Biden.

    To be clear, both President Biden and Donald Trump have lowered the cost of insulin for people with Medicare and for no other cohort of the population. But, access to lower-cost insulin for people with Medicare is far greater under President Biden than it was under President Trump.

    Under President Biden, all 6,000 Medicare Part D prescription drug plans are required to keep the insulin copay at no more than $35 a month. President Trump did not require the Part D plans to charge a copay of no more than $35 a month; he made it voluntary. So, only 38 percent of Part D plans participated when he was president.

    As a result, the Trump administration only helped 800,000 people with Medicare needing insulin. The Biden Administration is helping all 3.3 million people with Medicare needing insulin.

    Under President Biden, all insulin products are covered. Donald Trump only required a subset of insulin products to be covered–one of each dosage form (vial, pen) and insulin type (rapid-acting, short-acting, intermediate-acting, and long-acting).

    Under President Biden, the insulin cap applies to drugs under Medicare Part D and Part B. The Trump administration only applied the cap to Medicare Part D and not to insulin drugs administered by a physician under Part B.

    President Biden is now proposing to ensure that everyone with commercial insurance also enjoys the $35 a month out-of-pocket cap on insulin. In fact, President Biden’s proposal was in the Inflation Reduction Act, but the Republicans took it out before it passed. And, Republicans in Congress want to repeal the Inflation Reduction Act, which would end the $35 out-of-pocket insulin cap, though Trump has not yet commented on this.

    N.B. Rachel Cohrs Zhang reports for Stat that the idea for the $35 insulin cap came from Eli Lilly. The cap likely helps Lilly’s profits since it boosts insulin sales significantly, as more people can afford it. The cap doesn’t affect the price of the drug. So, everyone with Medicare ends up absorbing insulin’s lower out-of-pocket cost through higher premiums.

    Here’s more from Just Care:

  • Reconciliation bill would reduce Medicare drug costs

    Reconciliation bill would reduce Medicare drug costs

    The Democrats in Congress appear to be on the cusp of passing a more robust reconciliation package than recently anticipated, now that Senator Joe Manchin is on board. The package should reduce Medicare drug costs, saving money for people with Medicare as well as lives. Among other things, it would cap out-of-pocket expenses for drugs under Medicare Part D at $2,000 a calendar year.

    The reconciliation package includes three key provisions, a $2,000 cap on Part D out-of-pocket costs, which would begin in 2025; Medicare drug price negotiation for a small group of high volume brand-name drugs, which would begin in 2026; and a limit on the amount Pharma can raise prices on drugs to inflation, which would begin in 2023.

    The out-of-pocket cap on Part D should increase access to costly drugs, such as chemotherapies, for a lot of older adults and people with disabilities who have been forced to forgo them as a result of their enormous costs.  Today, 1.45 million people reach the catastrophic coverage cap in Part D. They are then still liable for 5 percent of the cost of their drugs, which can easily be $5,000 or more given that many chemotherapies and other drugs for complex conditions cost well over $100,000. As a result, many stop taking life-saving drugs and die needlessly.

    The limit on drug price inflation helps give the bill teeth. Without this limit, the out-of-pocket cap would make it easier for drug companies to raise prices because, with an out-of-pocket cap, people with Medicare are less likely to notice drug price increases. Yet, if Pharma could raise prices significantly, insurers would be forced to raise premiums, deductibles and copays for everyone with Part D. 

    Unlike most Congressional legislation, the reconciliation package comes with a clear penalty on drug companies that raise their prices above the inflationary rate.  They must provide refunds to people with Medicare for the difference between what they are allowed to charge and what they charge above that amount. 

    The package limits drug price negotiation to ten high-cost drugs each year. HHS will identify those high-cost drugs that have been on the market for at least nine years and have no generic substitute. Beginning in 2029, it allows HHS to negotiate the price of 20 high-cost drugs a year. 

    The package originally had a provision limiting the cost of insulin, which was taken out when Senators Jeanne Shaheen and Susan Collins thought they had a bipartisan majority to support their insulin legislation. Now that these Senators have failed to secure that majority, insulin price negotiation could be included in the reconciliation package. People with Medicare Part D already benefit from a $35 monthly cap on their insulin costs if they choose a Medicare Part D plan with this protection. 

    The package would include free vaccines for about 4.1 million people with Medicare.  

    As of now, we do not know how Senator Kyrsten Sinema will vote on the package or, for that matter, the Democrats in the House of Representatives. That said, a vote on the package is expected shortly.

    Here’s more from Just Care:

  • Can Congress incentivize drugmakers to lower insulin prices voluntarily?

    Can Congress incentivize drugmakers to lower insulin prices voluntarily?

    Senators Jeanne Shaheen and Susan Collins think they have a way to bring down the price of insulin without needing to pass legislation regulating its price. Stat News reports that their proposal takes into consideration that drugmakers must pay insurers to give their drugs preferential treatment, driving up drug prices. It also assumes that drugmakers would voluntarily lower their list prices if legislation frees them from paying insurers. Really?

    The Shaheen-Collins proposal would forbid pharmaceutical companies from paying insurers for preferential treatment. It would also limit people’s monthly out-of-pocket insulin costs. It would impose an out-of-pocket limit if insulin makers lowered their prices to $68 a vial, its 2006 price. Insulin now costs $300 or so a vial.

    Shaheen and Collins don’t know whether manufacturers would agree to their proposal. If not, some people with insurance would still benefit, as the proposal would require insurers to offer at least one insulin product for no more than $35 out-of-pocket a month. However, people with diabetes need to use different insulin products, so that backstop would only benefit people who needed the one insulin product with a $35 max out-of-pocket cap.

    Today, people with Medicare already have the option of capping their monthly insulin costs at $35 through their Part D drug plans. That said, about one in four of them still paid more than $35 a month for their insulin.

    Few people benefit from an out-of-pocket cap of no more than $35. Many people’s out-of-pocket costs with insulin each month can be more than $150. At least one in four people who need insulin are paying more than $35 a month for it.

    The Shaheen-Collins proposal would only help people who are uninsured if manufacturers lowered their list prices. Most likely, they would only do so voluntarily if the amount they no longer paid insurers to include their products on their formularies exceeded the difference between what they charge now for insulin and what they charged in 2006.

    Many large advocacy groups think the Shaheen-Collins proposal is ridiculous. Drug manufacturers are not going to lower their prices voluntarily. And, if they don’t, the Shaheen-Collins proposal would cost the federal government billions. It would also increase health insurance premiums for everyone. as insurers would not eat the cost of a $35 monthly out-of-pocket limit, they would shift it. Moreover, the proposal would encourage insulin manufacturers to raise their prices further since they would know that any price increase would not affect people’s out-of-pocket insulin costs.

    Congress needs to pass legislation that lowers all drug prices for everyone. In the meantime, for lower drug prices, check out Mark Cuban’s cost plus discounted drug pharmacy. You might also check out pharmacychecker.com for verified pharmacies selling drugs at far lower rates than in the US. And, then, there’s always the opportunity to pick up low-cost drugs on a trip to Mexico, Canada, Japan or Australia, among many other countries.

    Here’s more from Just Care:

  • What if physicians can’t calculate patients’ out-of-pocket costs?

    What if physicians can’t calculate patients’ out-of-pocket costs?

    A new paper in JAMA Network Open finds that physicians are bad at figuring out patients’ out-of-pocket prescription drug costs, even when deductible, coinsurance, copay and out-of-pocket cap information is at their fingertips. Of course, the goal of giving physicians this information is to help ensure that cost is not a barrier to patients filling their prescriptions. So, what if physicians can’t calculate patients’ out-of-pocket costs?

    The authors tested a hypothetical scenario with a group of physicians. In the scenario, a patient was prescribed a drug that cost $1,000 a month. Physicians were then asked what the drug would cost the insured patient at different times of the year–before the deductible was met, once it was met and a copay (a fixed out-of-pocket amount) was required, once it was met and coinsurance (a percentage of the drug’s cost) was required, and once the patient had reached the out-of-pocket cap.

    The authors found that fewer than two-thirds of respondent physicians answered a single one of these questions correctly. Only slightly more than one in five of them (21 percent) answered all four questions about patient drug costs correctly. Bottom line: Calculating patient costs is not easy, even for people with graduate degrees!

    The authors conclude that out-of-pocket costs should be simpler to calculate. If physicians can’t calculate them, how can anyone expect patients to do so? The sad truth is that policymakers do not seem to care or to be willing to fix this problem. And, the only solution that will ensure everyone can fill their prescriptions is to have no copayment for life-saving drugs and no more than nominal copayments for all other drugs.

    Keep in mind that out-of-pocket costs are just one of many considerations when choosing a health plan. And, because there are so many tradeoffs involved and so many unknowns, it’s not possible to ensure people choose a health plan that meets their needs. At best, you can know whether your doctors are in-network at the time you enroll (doctors can leave at any time,) along with your out-of-pocket maximum. But, whether the health plan will delay or deny access to care your doctor recommends is critically important, yet unknowable.

    Here’s more from Just Care:

  • Congress must reduce out-of-pocket costs for people with Medicare

    Congress must reduce out-of-pocket costs for people with Medicare

    Earlier this month, “the Medicare team” inside the federal government sent an email inviting millions of us to mark our calendars for the Oct. 15 start of a 54-day period to enroll in Medicare health plans.

    At the end of the email, Medicare makes a suggestion we felt should be far more prominent and noticeable, one that is akin to what the Surgeon General requires tobacco companies to plaster on a pack of cigarettes: “A plan with the lowest premium might not always provide the lowest total cost to you.”

    Yes, even older adults and people with disabilities who are eligible for Medicare need to worry about high out-of-pocket costs. Whether they are in traditional Medicare, administered directly by the government, a Medicare prescription drug plan or a Medicare Advantage plan, both of which are administered by private health insurers, costs–deductibles, coinsurance and copays–have been rising. Traditional Medicare and the bewildering array of prescription drug plans have no out-of-pocket maximums, and Medicare Advantage plans have a cap that can be as high as $7,550 a year for in-network care alone. According to the Kaiser Family Foundation, millions of people with Medicare, particularly people with modest incomes in poor health, are facing cost-related barriers to care.

    Many members of Congress recognize that health care costs jeopardize health care access and want the reconciliation bill to broaden Medicare benefits to include dental, hearing and vision services. As worthy as that is, capping Medicare out-of-pockets at an affordable level could be even more beneficial for cash-strapped seniors.  Because there is no reasonable cap, people with Medicare too often are forced to go deep into debt to get needed care. Many others forgo this care because of the cost.

    Both Traditional Medicare and Medicare Advantage cover hospital and medical care under Parts A and B. If you’ve worked and paid into Social Security, you qualify for these hospital and medical benefits at relatively low cost. But as health care costs have risen, so has the expectation that even people with Medicare need to put more “skin in the game.”

    Out-of-pocket requirements encompass deductibles, coinsurance and copayments. Deductibles for Medicare hospital and medical coverage are relatively low compared to what workers with private insurance pay these days. Coinsurance is an entirely different story: Traditional Medicare only covers 80 percent of its approved rate for medical services. That means people with Medicare, whose average annual income is less than $30,000, can face thousands of dollars in additional medical bills unless they can afford supplemental coverage, which picks up those costs and protects them financially.

    Medicare Advantage (Part C), the alternative to Traditional Medicare, claims to fill that void, offering an out-of-pocket cap for medical and hospital services and additional benefits. Many Medicare Advantage plans even offer $0 monthly premiums. What could be more enticing to people on retirement incomes?

    The devil is in the details. Medicare Advantage plans drive profits for their corporate parents by charging high and often sudden out-of-pocket costs that are tied to sickness. These costs are often prohibitive, leading people to skip critical care or, as the GAO found in a recent study, disenroll from their Medicare Advantage plans and return to Traditional Medicare when they get sicker.

    Insurers profit at taxpayer expense when that happens. Not only can Medicare Advantage plans consequently avoid covering expensive care, but they can also benefit from the upfront payments the government pays them that they don’t spend. Uncle Sam’s generosity to health insurers explains why many of them are reporting record profits. Many now get most of their revenues from the government, not from private paying customers. UnitedHealthcare, the biggest Medicare Advantage insurer, makes more than twice as much from government programs like Medicare Advantage and Medicaid as it does from its commercial customers.

    Medicare Part D prescription drug coverage also needs a reasonable out-of-pocket cap. One recent study found that when prescription cost-sharing rose as little as $10.40, it increased mortality by nearly 33 percent among the more than 20 percent who stopped taking their medications because of the additional cost.

    To put it more bluntly, many of our parents and grandparents are dying because they have no more skin to put in the game.

    People with Medicare find themselves with formidable health care costs wherever they turn, taking a bigger chunk of their retirement income with each passing year or, worse still, precluding them from getting care. This untenable situation is a key reason that a variety of groups, including several passionate about the health care needs of seniors, have come together to demand that Congress address rising out-of-pocket health care costs.

    Congress is now neck deep in drafting legislation that could easily rein in out-of-pocket costs for everyone with Medicare at no or little additional cost. Medicare Advantage plans are currently receiving rebates of $140 a month per enrollee and at least $40 a month more per enrollee than traditional Medicare in government overpayments. Lawmakers could allocate some of those funds towards lower out-of-pocket costs and a low out-of-pocket cap in both Traditional Medicare and Medicare Advantage.

    Consider that this week, millions of seniors and people with disabilities will stare blankly at an online Medicare enrollment portal, faced with health care out-of-pocket cost projections that for many will be far too costly. Instead of allowing corporate health insurers to grow fat on Medicare, our leaders should direct that money toward lower costs for the most vulnerable among us.

    This piece was originally published on Wendell Potter’s substack; Diane Archer is the co-author.

    Here’s more from Just Care:

  • Older adults in US face high cost-related barriers to care

    Older adults in US face high cost-related barriers to care

    A new report from the Commonwealth Fund finds that cost is a large barrier to care for older adults in the US, larger than it is for older adults in 10 other wealthy countries. Consequently, many older adults in the US postpone needed care or forgo it altogether.

    Congress is aware that cost is a barrier to care for people with Medicare. In response, it is looking at add vision, hearing and dental benefits to Medicare. That could be a huge help for the 63 million people with Medicare, so long as their out-of-pocket costs are minimal. Otherwise, these costs could render the additional benefits meaningless for a large cohort of people with Medicare; they would be functionally uninsured.

    Today, older adults in the US spend more on healthcare than older adults in other nations. About 8.5 percent of older adults in the US skip or postpone needed care because of the cost. In sharp contrast, in Germany, the Netherlands, Norway, and Sweden, fewer than two percent of older adults report facing financial barriers to care. Even in Switzerland and Australia, which impose high out-of-pocket costs on older adults, older adults are less likely to skip or delay care than older adults in the US.

    Not surprisingly, older adults in the US are also twice as likely not to fill their prescriptions and skip doses because of the cost than older adults in other countries. A recent NBER study found that an increase in prescription drug copays of as little as $10.40 keeps more than one in five older adults from filling life-saving prescriptions. As a result, thousands of people with Medicare die prematurely every year.

    Some Democrats in Congress are saying that the government doesn’t have the money to cover a larger share of health care costs for people with Medicare. In fact, right now, Medicare Advantage plans are getting government rebates of $140 per enrollee per month, along with billions a year in overpayments relative to  traditional Medicare. Congress could take some or all of that money and put it towards lower out-of-pocket costs and a reasonable out-of- pocket cap in both traditional Medicare and Medicare Advantage.

    More people with Medicare would not feel the need to forgo critical care if Congress reallocated those tens of billions of additional dollars towards lower out-of-pocket costs for everyone with Medicare and an out-of-pocket cap in traditional Medicare.

    Warning: Medicare Advantage plans might look inexpensive because premiums are usually low.  But, if you get sick and need costly care, your out-of-pocket costs, copays amd deductibles, could be as high as $7,550, depending on the plan you choose. Your out-of-network costs are additional.

    Here’s more from Just Care:

  • Members of Congress sign on to letter supporting Medicare Advantage riddled with misinformation

    Members of Congress sign on to letter supporting Medicare Advantage riddled with misinformation

    Every year for the last several years, the Medicare Advantage plans ask members of Congress to sign onto a letter addressed to the head of the US Department of Health and Human Services that paints the Medicare Advantage plans in a rosy light. The letter is always riddled with misinformation. Even so, dozens of Republican and Democratic representatives sign on, in large part because many older adults and people with disabilities in their states are enrolled in a Medicare Advantage plan.

    This year’s letter to Secretary Xavier Becerra has the following fundamental errors.

    • Medicare Advantage plans do not meet the “holistic health needs” of people with Medicare, as the health plans would like people to believe. In fact, out-of-pocket costs combined with administrative obstacles and inappropriate medical necessity determinations keep large swaths of people enrolled in Medicare Advantage plans with costly and complex conditions from getting needed care. For example, the dental benefit that some plans offer lures people into joining, but the coverage is so minimal that people without coverage get dental care at the same frequency as people in Medicare Advantage plans with coverage. And, the typical Medicare Advantage out-of-pocket cap of around $5,500 is so high that many people enrolled are forced to skip care because they can’t afford their copays. The maximum annual out-of-pocket cap for in-network care alone is $7,550.
    • There is no evidence that Medicare Advantage offers either “high-quality” or “affordable” coverage, even though the plans repeat these claims as often as they can. To the contrary, one NBER paper finds that some Medicare Advantage plans are killing people. Another NBER paper finds that an increase in copays of just $10 keeps many people in Medicare Advantage plans from filling their prescriptions, suggesting that Medicare Advantage does not offer affordable coverage. As for quality of care, MedPAC says it does not have the data to make a finding as to the quality of services offered. Researchers at Brown University and elsewhere find that quality of home care and nursing home quality is better in traditional Medicare than Medicare Advantage.
    • Many people enrolled in Medicare Advantage have no choice–they did not “actively” choose it but rather were steered into it by their employers and unions. Or, they were forced into it because the Medicare supplemental coverage they need in traditional Medicare to protect themselves from financial risk was unaffordable or unavailable. Or, they were lured into it by misleading ads.

    On top of all that misinformation, the letter relies on findings of ATI, a research company hired by the trade association for the Medicare Advantage plans, not independent research. And, ATI does not base its findings on actual claims data for its findings.

    In fairness, many people cannot afford the upfront costs of traditional Medicare. If they want to protect themselves from financial risk, they need to buy supplemental coverage, unless they have Medicaid or retiree wrap-around benefits. Traditional Medicare does not have an out-of-pocket cap. They might not realize that their out-of-pocket costs in Medicare Advantage can be much higher than the cost of Medicare supplemental coverage, if they need costly services. Or, they gamble with their health, as a way to manage their expenses, hoping that they will not need costly care.

    Here’s more from Just Care: