Question

Describe how a policy to expand medicare drugs/medicine coverage could be implemented to improve the United States' health care system, using the policy cycle. How would this policy go through the 5 steps of the cycle and explain in detail how it becomes a law? What happens in the legislative branch ( house and senate) through the executive branch including implementation, and what are the potential legal implications up to the Supreme Court?

Answer 1

Ans=Medicare Part D, also called the Medicare prescription drug benefit, is an optional United States federal-government program to help Medicare beneficiaries pay for self-administered prescription drugs through prescription drug insurance premiums (the cost of almost all professionally administered prescriptions is covered under optional Part B of United States Medicare).Part D was originally proposed by President Bill Clinton in 1999, then by both political parties and Houses of Congress and President Bush during 2002 and 2003. The final bill was enacted as part of the Medicare Modernization Act of 2003 (which also made changes to the public Part C Medicare health plan program) and went into effect on January 1, 2006. The various proposals were substantially alike in that Part D was optional, it was separated from the other three Parts of Medicare in most proposals, and it used private pharmacy benefit managers on a regional basis to negotiate drug prices. The differences included consistent benefits nationwide in the Clinton/Democratic proposals (as opposed to multiple options in the Republican plans and the bill finally enacted) and a wide array of deductibles and co-pays (including the infamous "donut hole"); Bush's initial proposal included true catastrophic coverage for middle income seniors, but it was not in the final version and is a feature still not available in Part D.

The Four Coverage Stages of Medicare's Part D Program

Throughout the year,

your prescription drug plan costs may change depending on the coverage stage you are in. If you have a Part D plan, you move through the CMS coverage stages in this order: deductible (if applicable), initial coverage, coverage gap, and catastrophic coverage.

1Annual Deductible

Begins: with your first prescription of the plan year.

You pay the full cost of your prescriptions until your spending adds up to the amount of your deductible. So, if your plan has a $0 deductible, you skip straight to the next stage. Keep in mind that some deductibles may only apply to drugs on specific tiers, which means you may not have any deductible if you do not take any medications on those tiers. Any payments for your monthly premium or for medications on tiers that do not apply to the deductible are not counted toward reaching the deductible.

2Initial Coverage

Begins: immediately if your plan has no deductible. Or, when the prescription payments you have made equal your plan's deductible.

Your plan pays for a portion of each prescription drug you purchase, as long as that medication is covered under the plan's formulary (list of covered drugs). You pay the other portion, which is either a copayment (a set dollar amount) or coinsurance (a percentage of the drug's cost). The amount you pay will depend on the tier level assigned to your drug.1 This stage ends when the amount spent by you and your plan on your covered drugs adds up to equal the initial coverage limit set by Medicare for that year. In 2021 that limit is $4,130. Your monthly premium payments do not count toward reaching that limit.

3Coverage Gap

Begins: when you and your plan have collectively spent $4,130 on your covered drugs.

Not everyone will enter the coverage gap (also referred to as the "donut hole"). In the coverage gap, the plan is temporarily limited in how much it can pay for your drugs. If you do enter the gap, you'll pay 25% of the plan's cost for covered brand-name drugs and 25% of the plan's cost for covered generic drugs.

Keep in mind that while the percentage you pay for brand-name drugs is lower, the price of that drug may be much higher than the generic option. Calculate the amount you would owe for each to see which one really offers the best cost savings for you.

You exit the coverage gap when your total out-of-pocket cost on covered drugs (not including premiums) reaches $6,550. Your out-of-pocket cost is calculated by adding together all of the following: yearly deductible, coinsurance, and copayments from the entire plan year, and what you paid for drugs in the coverage gap (including the discounted amounts you didn't pay in that stage).

4Catastrophic Coverage

Begins: when your out-of-pocket costs reach $6,550 on covered drugs.

After your out-of-pocket cost totals $6,550, you exit the gap and get catastrophic coverage. In the catastrophic stage, you will pay a low coinsurance or copayment amount (which is set by Medicare) for all of your covered prescription drugs. That means the plan and the government pay for the rest – about 95% of the cost. You will remain in this phase until the end of the plan year.

implication

Since 2006, Medicare beneficiaries have had access to prescription drug coverage through Part D, where private plan sponsors contract with Medicare to provide the drug benefit. In recent years, policymakers have expressed concerns about the absence of a hard cap on out-of-pocket spending for Part D enrollees, the significant increase in Medicare spending for enrollees with high drug costs, and the relatively weak financial incentives faced by Part D plan sponsors to control high drug costs. Recent proposals aim to address these concerns, including the Trump Administration’s Fiscal Year 2020 budget, the bipartisan prescription drug bill passed by the Senate Finance Committee, and H.R.3, the prescription drug bill recently announced by Speaker Pelosi (D-CA). This brief describes how the Medicare Part D benefit will change in 2020 under current law and proposed changes that would affect what beneficiaries, plans, manufacturers, and Medicare pay for drug costs under Part D in the future.

Implementation =

• Plan and Health Care Provider goal alignment: PDP's and MA's are rewarded for focusing on low-cost drugs to all beneficiaries, while providers are rewarded for quality of care – sometimes involving expensive technologies.
• Conflicting goals: Plans are required to have a tiered exemptions process for beneficiaries to get a higher-tier drug at a lower cost, but plans must grant medically-necessary exceptions. However, the rule denies beneficiaries the right to request a tiering exception for certain high-cost drugs.
• Lack of standardization: Because each plan can design their formulary and tier levels, drugs appearing on Tier 2 in one plan may be on Tier 3 in another plan. Co-pays may vary across plans. Some plans have no deductibles and the coinsurance for the most expensive drugs varies widely. Some plans may insist on step therapy, which means that the patient must use generics first before the company will pay for higher-priced drugs. Patients can appeal and insurers are required to respond within a short timeframe, so as to not further the burden on the patient.
• Standards for electronic prescribing for Medicare Part D conflict with regulations in many U.S. states.

beneficiaries

A 2008 study found that the % of Medicare beneficiaries who reported forgoing medications due to cost dropped with Part D, from 15.2% in 2004 and 14.1% in 2005 to 11.5% in 2006. The percentage who reported skipping other basic necessities to pay for drugs also dropped, from 10.6% in 2004 and 11.1% in 2005 to 7.6% in 2006. The very sickest beneficiaries reported no reduction, but fewer reported forgoing other necessities to pay for medicine.

A parallel study found that Part D beneficiaries skip doses or switch to cheaper drugs and that many do not understand the program.Another study found that Part D resulted in modest increases in average drug utilization and decreases in average out-of-pocket expenditures.Further studies by the same group of researchers found that the net impact among beneficiaries was a decrease in the use of generic drugs.

A further study concludes that although a substantial reduction in out-of-pocket costs and a moderate increase in utilization among Medicare beneficiaries during the first year after Part D, there was no evidence of improvement in emergency department use, hospitalizations, or preference-based health utility for those eligible for Part D during its first year of implementation.It was also found that there were no significant changes in trends in the dual eligibles' out-of-pocket expenditures, total monthly expenditures, pill-days, or total number of prescriptions due to Part D.

A 2020 study found that Medicare Part D led to a sharp reduction in the number of people over the age of 65 who worked full-time. The authors say that this is evidence that before the change, people avoided retiring in order to maintain employer-based health insurance.

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