| Item |
S. 1
as amended and passed in Senate,
June 27, 2003 |
H.R.
1 as amended and passed in House of Representatives, June 27, 2003 |
National
Grange Position |
|
General
Approach | Voluntary
stand-alone drug benefit under Medicare Part D administered by new Center for
Medicare Choices in the Department of Health and Human Services (DHHS) and delivered
through private risk-bearing entities. Government contracts with a private, non-risk-bearing
plan that administers benefit (so-called "fallback") in regions with fewer than
two private stand-alone drug plans. Drug benefits integrated with enhanced Part
A and B benefits provided by private plans under new Medicare Advantage (Part
C). All private plans share risk with government for drug benefit. Also provides
subsidies for drug coverage to enrollees in qualified retiree plans and qualified
state pharmaceutical assistance programs (SPAPs). Interim
prescription drug discount card endorsement program (2004-2005) with government-subsidized
card accounts for low-income. | Voluntary
stand-alone drug benefit under Medicare Part D administered by new Medicare Benefits
Administration in the Department of Health and Human Services (DHHS) and delivered
through private risk-bearing entities. Also provides subsidies for drug coverage
to enrollees in qualified retiree plans. Drug benefits integrated with enhanced
Part A and B benefits provided by private plans under Medicare Advantage (Part
C) or new Enhanced Fee-for-Service (EFFS) plan options (Part E). Establishes competitive
government contribution system (FEHBP-style reforms) in 2010 that includes traditional
Medicare.
Interim prescription drug discount card endorsement program (2004-2005) with government-subsidized
card accounts for beneficiaries without other drug coverage. | National
Grange urges Congress to establish a universal, affordable prescription drug benefit
within Medicare. |
| Benefit
Package | All
Part D Medicare Prescription Drug Plans (PDP) or Medicare Advantage plans must
offer the standard benefit or its actuarial equivalent. Part D and Medicare Advantage
plans (except Medical Savings Accounts plans) may also offer richer drug benefits
in separate plan. | All
Part D Medicare prescription drug plans (PDP), Medicare Advantage coordinated
care plans, and EFFS plans must offer at least the standard drug benefit or its
actuarial equivalent. Plans may offer richer coverage in lieu of standard coverage. | National
Grange supports legislation to maintain Medicare affordability and at the same
time provide fair and equitable coverage for every senior American regardless
of age, race, income, health condition, or location with freedom of choice of
medical provider and facility. National
Grange supports expanded use of tax deductible medical savings accounts (MSAs)
in the form of an IRA type account to that could be used to assist rural seniors
meet prescription drug and other medical expenses not covered directly by a Medicare
prescription drug benefit.
|
| Monthly
Premium | Part
D standard coverage - CBO estimate of $34.00 on average in first year (2006) and
increasing to $62.00 in 2013 - based on enrollee's choice of plan.
In Medicare Advantage, drug premium calculated in same way but may be offset by
savings from other benefits. In
general, Part D premiums are deducted from the beneficiary's monthly Social Security
check. | Part
D standard coverage - CBO estimate of $35.50 on average in first year (2006) and
increasing to $56.00 in 2013- based on enrollee's choice of plan. In Medicare
Advantage and EFFS, premium calculated in same way but may be offset by savings
from other benefits. At
enrollee option, Part D premiums may be deducted from beneficiary's Social Security
check or paid through an electronic funds transfer. |
| Deductible
| $275
(indexed to growth in per capita drug spending by Medicare beneficiaries). | $250
(indexed to growth in per capita drug spending by Medicare beneficiaries). |
| Cost-Sharing
| 50%
up to initial coverage limit of $4,500; 100% between initial limit and stop-loss
threshold; 10% above stop-loss threshold. (Thresholds are indexed.) | 20%
up to initial coverage limit of $2,000; 100% between initial limit and stop-loss;
no coinsurance above stop-loss threshold. (Thresholds are indexed.) |
| Stop-Loss
Threshold Applied to Out-of-Pocket Spending | $3,700
(indexed). After reaching threshold, 90% reimbursement. Excludes payments from
other private insurance such as employer retiree health coverage. | $3,500
(indexed). After reaching threshold, 100% reimbursement. Excludes payments from
other private insurance such as employer retiree health coverage. Special rules
for qualified employer plans. |
| Income-Related
Stop-Loss Threshold | No
provision. | Income-related
stop-loss threshold for enrollees with incomes above $60,000/individuals and $120,000/couples.
Treasury Secretary provides income information to HHS Secretary, who then discloses
applicable out-of-pocket thresholds to drug plan sponsors. |
| Government
Subsidies for General Medicare Population | About
70% of standard drug benefit costs provided through direct premium subsidies and
reinsurance. Plans would receive reinsurance for 80% of actual net costs above
stop-loss threshold for standard drug coverage (except qualified state pharmaceutical
assistance plans would receive reinsurance of 65%). | Direct
premium subsidies of 43% of national average premium for standard coverage; reinsurance
of 30% of standard benefits in aggregate. Reinsurance payments of 20% for standard
benefits $1,000-$2,000; 80% above stop-loss. |
| Covered
Drugs | Drugs,
biological products and insulin (including associated syringes and medical supplies
as defined by the Administrator) that are covered under Medicaid and vaccines
licensed under Section 351 of the Public Health Service Act. Includes coverage
for any use of a covered outpatient drug for a medically accepted indication,
as defined under Medicaid. | Drugs,
biological products and insulin (and medical supplies associated with the injection
of insulin as defined by the Secretary) that are covered under Medicaid and vaccines
licensed under Section 351 of the Public Health Service Act. Includes coverage
for any use of a covered outpatient drug for a medically accepted indication,
as defined under Medicaid. | National
Grange supports equity of payment between inpatient and outpatient procedures
for prescription drugs, including self-injected medicines, according to Medicare's
Diagnostic Related Groups. National
Grange supports improved access to new and existing health care technologies,
especially prescription drug technologies, for all rural residents.
|
| Drugs
Excluded from Coverage | Excluded
would be drugs covered under Medicare Parts A or B (unless no benefits are payable),
and those in categories that may be excluded under Medicaid (i.e., weight loss
or gain, fertility, cosmetic or hair growth, cough or cold relief, vitamins and
minerals, non-prescription drugs, barbituates, and benzodiazepines) except for
smoking cessation agents. Drugs not covered because of a plan's formulary would
be excluded if not successfully appealed. Drugs not meeting the Medicare definition
of reasonable and necessary, or not prescribed according to requirements, could
be excluded from coverage, but determinations would be subject to appeal. | Excluded
would be drugs for which benefits are payable under Medicare Parts A or B, and
those in categories that may be excluded under Medicaid (i.e., weight loss or
gain, fertility, cosmetic or hair growth, cough or cold relief, vitamins and minerals,
non-prescription drugs, barbituates, and benzodiazepines) except for smoking cessation
agents. Drugs not covered because of a plan's formulary would be excluded if not
successfully appealed. Drugs not meeting the Medicare definition of reasonable
and necessary, or not prescribed according to requirements, could be excluded
from coverage, but determinations would be subject to appeal. |
| Formularies
| Plans
may have a formulary so long as the formulary meets standards. Formularies must
be developed by a pharmacy and therapeutic (P&T) committee that includes at least
one academic expert, one practicing physician and one practicing pharmacist, all
with expertise in the care of elderly or disabled; a majority of P&T committee
must be practicing physicians or pharmacists; formulary must include drugs within
each therapeutic category and class (as defined by the Administrator using certain
compendia and other recognized sources); decisions must be based on the strength
of scientific evidence and standards of practice; the committee must have procedures
to educate providers concerning the formulary; and appropriate notice must be
given to enrollees, pharmacists, and physicians before a drug is removed from
the formulary. | Plans
may have a formulary so long as the formulary meets standards. Formularies must
be developed by a P&T committee that includes at least one practicing physician
and one practicing pharmacist independent and free of conflict with respect to
the committee, both with expertise in the care of elderly or disabled; the formulary
must include drugs within each therapeutic category and class; decisions must
be based on the strength of scientific evidence and standards of practice; the
committee must have procedures to educate providers and enrollees concerning the
formulary; and appropriate notice must be given to enrollees and physicians before
a drug is removed from the formulary or the tier status of a drug is changed.
In defining therapeutic classes, the committee would take into account standards
published in the United States Pharmacopeia-Drug Information. |
| Access
to Drugs Not on Formulary or Preferred Drug List | Beneficiaries
could appeal for coverage of non-formulary drugs if the prescribing physician
determines that the formulary drug is not effective for the patient or has significant
adverse effects for the patient. In plans with tiered cost-sharing, enrollees
may request that non-preferred drugs be covered as preferred drugs if the prescribing
provider determines that the preferred drug is not effective or has adverse effects
on the patient. | Beneficiaries
could appeal for coverage of non-formulary drugs, or to have non-preferred formulary
drugs be covered as preferred drugs, if the prescribing physician determines that
the formulary drug either is not effective for the patient or has significant
adverse effects for the patient, or both. |
| Treatment
of Retiree Health Drug Coverage | Qualified
retiree plans with drug coverage at least actuarially equivalent to Part D coverage
would be eligible for same government subsidy per Medicare enrollee, based on
national average premium (risk and geographically adjusted) for standard coverage.
Also eligible for reinsurance of 80% of costs in excess of stop-loss threshold
(but employer-covered costs do not count towards stop-loss). | Qualified
retiree plans with drug coverage at least actuarially equivalent to standard Part
D coverage receive subsidies of 28% of costs for coverage above deductible and
up to $5,000 in 2006 in spending per Medicare enrollee (indexed thereafter). | The
National Grange supports giving rural Seniors a choice of Medicare programs that
include an affordable prescription drug benefit. |
| Drug
Pricing | Plans
would negotiate drug prices and must make the negotiated price available to enrollees
regardless of whether benefits are payable. Negotiated price is defined to include
all discounts, direct or indirect subsidies, rebates, or other price concessions
or direct or indirect remunerations. Drug plan sponsors must provide that each
pharmacy or dispenser of a covered drug inform the enrollee at the time of purchase
of any differential between the price of the drug and the price of the lowest-cost
generic equivalent. Drug prices negotiated for Part D (by a PDP, MA plan, or qualified
retiree plan) would not be applicable to Medicaid "best price" provisions. If
a Medicaid plan uses prices negotiated by a Medicare PDP to provide Medicaid assistance,
Medicaid rebate provisions would not apply. | Plans
would negotiate prices with manufacturers and suppliers of covered drugs. Enrollees
must have access to their plan's negotiated prices even if no benefits are paid.
Each plan must disclose to the Administrator the extent to which discounts or
rebates or other remuneration or price concessions made available to the plan
sponsor or organization by a manufacturer are passed through to enrollees through
pharmacies and other dispensers or otherwise. The Administrator would have to
keep this information confidential. PDP
sponsors must provide that each pharmacy or dispenser of a covered drug inform
the enrollee at the time of purchase of any differential between the price of
the drug and the price of the lowest-cost generic equivalent. Drug prices negotiated
for Part D (by a PDP, MA or EFFS plan, or qualified retiree plan) would not be
applicable to Medicaid "best price" provisions. If a Medicaid plan uses prices
negotiated by a Medicare PDP to provide Medicaid assistance, Medicaid rebate provisions
would not apply. | The
National Grange believes that payments to health care providers under Medicare
should adhere to a schedule of fees for services provided that is fair and equitable
across the United States. The
National Grange supports legislation to prohibit health care professionals from
charging amounts above Medicare limits for Medicare services, including any prescription
drug benefit. |
| Interim
Drug Program | Establishes
a Medicare Prescription Drug Discount Card Endorsement Program to operate in 2004-2005.
Card programs would have to meet specific requirements and charge no more than
$25 in annual enrollment fees. Low-income enrollees (QMB, SLMB, QI) would receive
$600 per year, with balances carried forward on their cards from one year to the
next. Government also pays enrollment fee for low-income. Discount card sponsors
must provide enrollees with access to negotiated prices, defined to include all
discounts, direct or indirect subsidies, rebates, or other price concessions or
direct or indirect remunerations. Card sponsors with contracts to administer the
low-income subsidies may not charge low-income enrollees more than average wholesale
price (AWP) minus 20% for any covered drug. | Establishes
a Medicare Prescription Drug Discount Card Endorsement and Assistance Program
to operate within 90 days of enactment through 2005. Card programs would have
to meet specific requirements and charge $30 in annual enrollment fees ($20 for
sponsor and $10 retained by government). For discount card program enrollees who
do not have other prescription drug coverage (e.g., Medicaid, group health plan,
health insurance, etc.), the government would deposit to enrollee card accounts
the following amounts: $800 for enrollees below 135% of poverty, $500 for enrollees
with incomes between 135% and 150% of poverty, and $100 for enrollees with incomes
above 150% of poverty. Balances in the accounts could be carried forward from
one year to the next, and amounts could be contributed by employers and other
individuals. Card sponsors would have to disclose to the Secretary the extent
to which discounts or rebates or other remuneration or price concessions made
available to it by manufacturers are passed through to enrollees through pharmacies
and other dispensers or otherwise. | National
Grange believes that health care cost containment strategies, including prescription
drug benefits, should maintain the highest quality of care without compromising
effectiveness and efficiency. National
Grange supports legislation to make prescriptions and over-the-counter drugs more
affordable for our rural seniors by considering full or partial prescription coverage. |
| Medicare
Private Plan Reforms Not Related to Drug Coverage | Renames
Part C, Medicare+Choice, as Medicare Advantage (MA) and reforms plan payment method.
Increases payments to MA plans in 2005, and establishes new payment method beginning
in 2006(see below). Adds new MA PPO option. All MA plans must offer coverage of
Part A and Part B items and services, a unified deductible for those services,
and an out-of-pocket limit. Plans must also offer standard Part D drug coverage.
| Renames
Part C, Medicare+Choice, as Medicare Advantage (MA) and reforms plan payment method.
Increases payments to MA plans beginning in 2004, establishes new payment method
beginning in 2006, and moves to a FEHBP-style competitive approach in 2010. Establishes
Part E with new regional Enhanced Fee-for-Service (EFFS) plans. All MA and EFFS
plans must offer coverage of Part A and Part B items and services, a unified deductible
for those services, and an out-of-pocket limit. Plans must also offer standard
Part D drug coverage. Establishes competitive government contribution system in
2010 that includes traditional Medicare. | The
National Grange favors legislation that provides rural seniors with the freedom
to address their medical financial responsibilities, that extends their freedom
of choice regarding Medicare health insurance programs and preserves their freedom
of choice among health care providers. The
National Grange favors extending employer provided health insurance coverage under
COBRA for terminated employees for a period of up to 36 months for individuals
who could then become eligible for Medicare.
|
| Regional
Plans | Establishes
new regional PPO plans (and removes option for county-based PPO plans) offering
enhanced benefits and covering large, defined regions, limited to 3 lowest-cost,
credible PPO plans per region. PPO plans must serve an entire region or the entire
U.S. At least 10 regions would be defined by the Administrator, each of which
includes at least one state, and which cannot divide states. PPO plans paid in
same manner as other MA plans, except have shared risk arrangements in first years.
Generally, PPO plans must comply with standards applicable to MA coordinated care
plans. | Establishes
new regional Enhanced Fee-for-Service (EFFS) plans (but does not remove PPO or
private fee-for-service options under Medicare Advantage) offering enhanced benefits
and covering regions defined by the Administrator, with no more than 3 plans per
region. Plans could be fee-for-service or PPOs. EFFS plans must serve an entire
region (one of at least 10 defined by the Administrator after a survey of insurance
markets). Generally, EFFS plans must comply with standards for MA private-fee-for-service
plans. |
| "Premium
Support" System | No
provision. | Beginning
in 2010, a new FEHBP-style competition program would be established in which traditional
fee-for-service (FFS) Medicare would compete with MA and EFFS plans. Competitive
areas would be those where there are at least two MA or EFFS plans with penetration
of the lesser of 20% or the national MA+EFFS penetration rate. In competitive
areas, a benchmark would be computed as the average of the adjusted average per
capita cost (AAPCC) of FFS and the MA/EFFS plan bids, weighted by enrollment (the
effects of the MA/EFFS plan bids would be phased-in over a 5-year period). Premiums
for all beneficiaries in the area would be determined by comparing the plan bids
(or, for FFS, the AAPCC without DME and with VA/DOD costs) to the benchmark. To
the extent the AAPCC was more or less than the benchmark, beneficiaries in FFS
Medicare would have an adjustment to their Part B premium (pay more equal to the
difference if the AAPCC is higher than the benchmark; have the Part B premium
reduced by 75% of the difference if the AAPCC is lower than the benchmark). The
effect on Part B premiums would phase-in over 5 years to equal the full amount
in 2015 and after. Enrollees in MA/FFS plans would realize the difference between
their plan's bid and the benchmark through the premium (or rebate) associated
with their plan. | The
National Grange favors legislation permitting those on Medicare to deduct the
cost of their supplemental health insurance coverage from their income tax. |
| Medicare
Base Rate Differential | Eliminates
base rate differential between urban and all other hospitals. | Eliminates
base rate differential between urban and all other hospitals. | The
National Grange supports repealing regulatory barriers that rural health care
facilities face when they seek equitable reimbursement for treatments provided
under federal health care programs, such as Medicare. The
National Grange urges Congress to require Medicare to make timely payments to
both acute care and extended care facilities to insure that the correct level
of care is maintained for all patients. |
| Medicare
Incentive Payment Program(IPP) | Requires
the Secretary to:  Establish
a procedure for determining when IPP payments are applicable
Develop
and implement a program to train providers about the IPP | Provides
a 5% bonus payment to physicians in primary care or specialty care scarcity areas Requires
the Secretary to: Establish
a procedure for determining when IPP payments are applicable
Develop and implement a
program to train providers about the IPP | The
National Grange supports incentive programs for doctors who will agree to practice
in rural areas where basic medical care is not available in order to promote greater
freedom of choice among health care providers for rural seniors. |
| Telemedicine
Demonstration Projects | No
provision | Extends
telemedicine demonstration projects by 4 years with funding of $60 million. | National
Grange supports the establishment or use of the necessary infrastructure for the
expansion of telemedicine into rural areas. |
