Publications

Current Knowledge of Third Party Outpatient Drug Coverage for Medicare Beneficiaries

February 1999

Elderly patients paid for more than half (52%) the cost of their prescriptions out of their own pockets, according to a recent study for the Pharmaceutical Research and Manufacturers of America. This is not surprising since Medicare does not, for the most part, cover outpatient prescribed medications. The study reviewed third party coverage options for pharmacy coverage (total average per beneficiary spending of $571 per person) as based on 1995 data. It showed that employers were the second largest source of payment (26%) through supplemental insurance. Beneficiaries with employer supplemental insurance drug coverage spent 31% out-of-pocket, while those with Medigap spent 60%, and those with Medicare HMO coverage spent 37% out-of-pocket. Additionally, only about 36% of beneficiaries with less than $10,000 in income had drug coverage, compared to 71% among those with $50,000 or more in income. The study also showed that Medicare beneficiaries at the extreme ends of the income spectrum (that is, those poor enough to qualify for full dual Medicare/ Medicaid coverage or those with full coverage from employer-provided supplemental health plans) had the most extensive coverage. Those at greatest risk were the middle group: beneficiaries with individually purchased Medigap coverage have no or limited drug benefits.

Client Area: Associations
Expertise Area: Medicare

Quality Health Care: New Challenges as Medicare Evolves

February 1999

The Health Care Financing Administration (HCFA) should promote "best practice" methods and educate providers. This study outlines ways in which the government can improve the quality of health care in Medicare programs. The cause for concern is due to the large gaps between the care that people should receive and the care they do receive. Medicare reforms must affect the whole system, and should not be tacked on as an afterthought.

Client Area: Associations
Expertise Area: Medicare

Implications of the Medicare Home Health Interim Payment System of the 1997 Balanced Budget Act

March 1998

The Medicare Home Health Interim Payment System (IPS) raises concerns for beneficiaries and providers. A temporary plan proposed until HCFA develops a home care PPS, the IPS may cause the number of home health agencies (HHAs) exceeding the Medicare cost limits to more than double and the published cost limits to decrease 21% on average overall. HHAs may operate without knowing the per-beneficiary limits for up to 6 months of the initial IPS cost reporting period. Strategies developed by HHAs to cope with this reduction may include increasing the proportion of low-end users with fewer visits and restraining costs per visit and number of visits per beneficiary. Some of these strategies could have considerable consequences for high-use home health clients.

Client Area: Associations
Expertise Area: Aging and Disability, Medicare

Out-of-Pocket Health Spending by Medicare Beneficiaries Age 65 and Older: 1997 Projections

December 1997

This study found that Medicare beneficiaries spend on average two out of every ten dollars in income on out-of-pocket health expenses, excluding the costs of home health and nursing home care. In addition, the report found that older Medicare beneficiaries living below the poverty line spend on average more than one-third of their yearly income on out-of-pocket health care costs. A first-time look at the magnitude of out-of-pocket spending for the nearly 60 percent of poor Medicare beneficiaries who do not receive Medicaid, the study provides the first comparison of out-of-pocket costs paid by beneficiaries enrolled in HMOs versus those in traditional fee-for-service programs.

Client Area: Associations
Expertise Area: Medicare

The Cost of Covering Medical Nutrition Therapy under Medicare: 1998 through 2004

April 1997

Analysis of data from a Northwestern HMO shows that the use of dietition services under Medicare Part B as specified in the Medical Nutrition Therapy Act of 1995 can reduce inpatient and physician service use for patients with diabetes and/or cardiovascular disease. Utilization savings appeared within the first calendar quarter and increased over time. Authors found also that the program could produce net savings to Medicare over the period analyzed (1998 to 2000) if coverage is limited to those with diseases demonstrated to show savings.

Client Area: Associations
Expertise Area: Chronic Disease / Cost of Illness, Medicare

Recent Trends in Employer Health Insurance Coverage and Benefits

October 1996

Employer health coverage has continued to erode throughout this decade despite the success employers have had in controlling health care costs. Employers responded to the rapid growth in health care costs early in this decade by shifting workers to managed care plans that control costs through price competition and aggressive cost control. However, employers also adopted policies that have led to reductions in the number of covered individuals. For example, some large employers with generous benefits have outsourced many production and service jobs to outside contractors where health insurance is less common and benefits are less comprehensive. Some employers also have discontinued their retiree coverage programs which will ultimately reduce coverage among early retirees. To control costs, employers have also increased employee cost sharing under their health plans and have discontinued coverage for certain specialized services. For example, deductibles and copayments have increased under traditional indemnity plans, partly as an incentive for individuals to shift to managed care alternatives. Coverage for expensive specialty services such as infertility treatments has also declined despite a recent increase in the number of states requiring insurers to cover these services. In addition, employers have increased premium contribution requirements for family coverage, which may be partly responsible for the recent decline in employer coverage among dependents. Some of the reduction in employer coverage will be curtailed by the recently enacted "Health Insurance Portability and Accountability Act of 1996" which requires portability of employer coverage across jobs. However, the impact of this legislation is likely to be negligible since 45 states had already enacted similar legislation by 1995. Thus gaps in employer coverage are likely to continue to be the primary reason for becoming uninsured well into the future.

Client Area: Associations
Expertise Area: Health Reform