Daniel Medicare

The latest example of high and rising prescription drug prices to attract significant media and public attention relates to the EpiPen, an auto-injector containing the drug epinephrine which is used to reverse the effects of severe allergic reactions.

Since Mylan acquired the EpiPen from Merck in 2007, the company has increased the list price for a pack of two EpiPens nearly 550%, from $94 in January 2007 to $609 in May 2016.¹ While the EpiPen can be a lifesaver for children with serious food allergies, it is also used to treat life-threatening allergic reactions experienced by the older adults and people with disabilities who are covered by Medicare. The EpiPen is covered under Medicare Part D, which provides outpatient prescription drug coverage to beneficiaries who enroll in private drug plans.

This data note examines the effects of rising EpiPen prices on Medicare and beneficiaries. Using data from a 5% sample of Medicare prescription drug event claims from the Centers for Medicare & Medicaid Services (CMS) Chronic Conditions Data Warehouse, we analyze EpiPen spending, in the aggregate and per user, in Medicare Part D between 2007 (the year after the drug benefit took effect, and the year Mylan acquired the product) and 2014 (the most recent year of data available). Our analysis is restricted to Medicare beneficiaries who had at least one month of Part D enrollment during the year and at least one prescription drug event with a brand name of EpiPen 2-pak, EpiPen Jr. 2-pak, EpiPen, or EpiPen Jr. during the year. The analysis is based on retail claims data that do not take into account manufacturer discounts (rebates) to plans, which ranged from an average of 9.6% of total Part D spending in 2007 to 14.3% in 2014, according to Medicare’s actuaries.² Part D rebate information submitted to CMS is confidential³; therefore, no data on rebates for the EpiPen to Part D plans is publicly available.

Total Medicare Part D spending on the EpiPen. According to our analysis, total Medicare Part D spending for the EpiPen increased from $7.0 million in 2007 to $87.9 million in 2014, an increase of 1151% (Figure 1).

 

While the total number of Part D enrollees using the EpiPen also increased over this time period—from nearly 80,000 users in 2007 to more than 211,000 in 2014—the increase was significantly lower in percentage terms (164%).

Over this same time period, average total Part D spending per EpiPen prescription increased nearly five-fold, from an average of $71 in 2007 to $344 in 2014 (a 383% increase) (Figure 2).

For example, in 2008, Part D spending per EpiPen prescription increased by 7.4%, more than 3.5 times greater than the increase in total Part D per capita spending (2.0%) and twice the rate of medical care price inflation (3.7%). In 2014, Part D spending per EpiPen prescription increased by 34.0%, four times the rate of increase in Part D per capita spending (8.6%) and 14 times larger than the 2.4% increase in medical care price inflation.

Out-of-pocket spending on the EpiPen by Medicare Part D enrollees. Since Medicare Part D plans cover a portion of enrollees’ total drug costs, beneficiaries in Part D plans pay less than the full retail cost of drugs covered by their plan, including the EpiPen. Still, average out-of-pocket spending by Part D enrollees for each EpiPen prescription nearly doubled between 2007 and 2014, from $30 to $56, among enrollees who do not receive Low-Income Subsidies (LIS) under Part D⁴ (Table 1). In the aggregate, out-of-pocket spending by all Part D enrollees who used the EpiPen increased more than five-fold between 2007 and 2014, from $1.6 million to $8.5 million, reflecting both an increase in the number of users and price increases for the EpiPen.

 

Table 1: Medicare Part D Spending for the EpiPen, 2007-2014
Year	Number of EpiPen users	Number of EpiPen prescriptions1	Total EpiPen spending	Average total spending per EpiPen prescription	Total out-of-pocket spending on the EpiPen	Average out-of-pocket spending by non-LIS enrollees per EpiPen prescription 2
2007	79,980	98,579	$7,027,685	$71	$1,608,896	$30
2008	90,840	113,027	$8,653,183	$77	$1,979,054	$31
2009	104,040	128,624	$10,769,049	$84	$2,543,034	$36
2010	113,080	138,212	$13,713,744	$99	$3,000,749	$40
2011	127,200	154,460	$20,264,292	$131	$3,685,566	$42
2012	166,400	199,853	$41,379,681	$207	$5,831,017	$51
2013	204,860	246,725	$63,342,313	$257	$7,504,229	$51
2014	211,500	255,419	$87,892,967	$344	$8,481,497	$56
NOTE: LIS is Low-Income Subsidy. Analysis includes Medicare beneficiaries who had at least one month of Part D coverage and at least one prescription drug event for the EpiPen during the year. Total spending does not take into account rebates and is not inflation-adjusted. 1Standardized to a 30-day supply. 2Reflects out-of-pocket spending by Part D enrollees not receiving Low-Income Subsidies. SOURCE: Kaiser Family Foundation analysis of a 5% sample of Medicare prescription drug event claims, 2007-2014.

The impact of rising EpiPen prices since 2014. Because our analysis is based on data available only to 2014, our estimates do not reflect additional EpiPen price increases that have occurred since then. The list price of the EpiPen has increased (in nominal terms) from $349 in May 2014 to $609 in May 2016, a 74% increase. If total Part D spending per EpiPen prescription also increased by 74% between 2014 and 2016, Medicare Part D spending for the EpiPen would have increased from $344 per prescription in 2014 to $600 per prescription in 2016—more than an eight-fold increase since 2007.

Illustrating the potential effect of rebates. As noted above, Medicare does not disclose drug-specific rebates, and therefore we are unable to determine the extent to which our estimates of total Part D spending on the EpiPen might overstate actual plan costs for the EpiPen over this time period. To approximate the potential effect of rebates on total Part D spending, if we assume that all Part D plans had received for the EpiPen the average rebate reported by Medicare’s actuaries each year between 2007 and 2014, EpiPen spending would have increased from $6.4 million in 2007 (applying the 9.6% average rebate in 2007) to $75.3 million in 2014 (applying the 14.3% average rebate in 2014)—for an increase in total spending of nearly 1100%. This is similar to the 1151% increase based on total gross Medicare spending not accounting for rebates. In other words, even if total Part D spending for the EpiPen had been lower each year as a result of rebates, we might still expect to see a similar trend in the rate of Medicare Part D spending growth for the EpiPen, unless plans received significantly larger rebates over time. But it could also be the case that plans received relatively low rebates for the EpiPen, due to the lack of competition for this product—a situation that gives drug manufacturers less incentive to negotiate price discounts with insurers.

Implications. Although the total cost of the EpiPen to Medicare and beneficiaries may seem modest relative to the cost of more expensive specialty drugs and biologics, our analysis demonstrates that EpiPen price increases have translated into higher spending for Medicare Part D plans, enrollees, and the program overall. When drug manufacturers raise prices for their products and insurers’ costs increase as a result, these increases can translate into higher cost sharing and higher premiums for consumers. Rising prices for the EpiPen in recent years and the resulting significant increases in Medicare Part D spending illustrate why the cost of prescription drugs is an ongoing concern for consumers, public and private payers, and policy makers alike.

 

Juliette Cubanski and Tricia Neuman are with the Kaiser Family Foundation.
Anthony Damico is an independent consultant.

Sep 20, 2016 | Juliette Cubanski, Tricia Neuman Follow @tricia_neuman on Twitter , and Anthony Damico

 

 

 

About eight of 10 of the 2.6 million people who died in the US in 2014 were people on Medicare, making Medicare the largest insurer of health care provided during the last year of life.1  In fact, roughly one-quarter of traditional Medicare spending for health care is for services provided to Medicare beneficiaries in their last year of life—a proportion that has remained steady for decades.2  The high overall cost for health care received in the last year of life is not surprising given that many who die have multiple serious and complex conditions.

Aside from cost, several other factors contribute to difficult clinical and policy discussions about whether patients are getting the care they want or need as they approach the end of their lives.  Research has found, for example, that most adults (90 percent) say they would prefer to receive end-of-life care in their home if they were terminally ill, yet data show that only about one-third of Medicare beneficiaries (age 65 and older) died at home.3

In 2016, Medicare began covering advance care planning—discussions that physicians and other health professionals have with their patients regarding end-of-life care and patient preferences—as a separate and billable service.  The following 10 FAQs provide information on Medicare’s role in end-of-life care and advance care planning.  In addition to defining relevant terms, and explaining Medicare’s current and future coverage for end-of-life care, these FAQs also describe recent relevant rules released by the Administration and additional proposals from Congress regarding advance care planning and care for people with serious and terminal illness.

Q1: WHAT IS “END-OF-LIFE CARE” AND DOES MEDICARE COVER IT?

A: End-of-life care encompasses all health care provided to someone in the days or years before death, whether the cause of death is sudden or a result of a terminal illness that runs a much longer course.  For people ages 65 and over, the most common causes of death include cancer, cardiovascular disease, and chronic respiratory diseases.4  Medicare covers a comprehensive set of health care services that beneficiaries are eligible to receive up until their death.  These services include care in hospitals and several other settings, home health care, physician services, diagnostic tests, and prescription drug coverage through a separate Medicare benefit.  Many of these Medicare-covered services may be used for either curative or palliative (symptom relief) purposes, or both.  Medicare beneficiaries with a terminal illness are eligible for the Medicare hospice benefit that includes additional services—not otherwise covered under traditional Medicare—such as bereavement services.  The Medicare hospice benefit is discussed in more detail in Question 5.

Q2: WHAT IS “ADVANCE CARE PLANNING” AND DOES MEDICARE COVER IT?

A: Advance care planning involves multiple steps designed to help individuals a) learn about the health care options that are available for end-of-life care; b) determine which types of care best fit their personal wishes; and c) share their wishes with family, friends, and their physicians.  In some cases, patients who have already considered their options may need only one advance care planning conversation with their physician.  However, experts state that frequently, beneficiaries may require a series of conversations with their physician or other health professionals to clearly understand and define their end-of-life wishes.5

Starting January 1, 2016, Medicare began covering advance care planning as a separate service provided by physicians and other health professionals (such as nurse practitioners who bill Medicare using the physician fee schedule).  Medicare now covers advance care planning provided in medical offices and facility settings, including hospitals.  As with most other physician services, beneficiaries are subject to cost sharing for advance care planning provided by their physician or health professional.  If Medicare beneficiaries desire advance care planning during their annual wellness visit, physicians and other health professionals may provide it during the visit and bill Medicare separately for it. However, beneficiaries will have not have any cost sharing liability for advance care planning provided in conjunction with their annual wellness visits.

Q3: ARE POLICYMAKERS, SUCH AS CMS OR CONGRESS, CONSIDERING CHANGES IN MEDICARE’S COVERAGE OF ADVANCE CARE PLANNING?

A: Yes. The agency that runs Medicare, the Centers for Medicare and Medicaid services (CMS), finalized regulations in fall 2015 that allow Medicare to pay physicians and other qualified health care professionals for providing advance care planning to beneficiaries.6  Specifically, in a proposed regulation released July 8, 2015, CMS introduced two new billing codes—previously recommended by the American Medical Association—for advance care planning provided to Medicare beneficiaries.  On October 30, 2015, CMS finalized these proposed provisions, allowing physicians and other health professionals to bill Medicare for advance care planning, as a separate service, starting January 1, 2016. Previous Medicare coverage rules only allowed reimbursement for advance care planning under very limited circumstances.7

In Congress, prior to this new CMS regulation on advance care planning, two bipartisan bills pertaining to advance directives and end-of-life care were introduced—one in the Senate and one in the House.  In the Senate, Sen. Mark Warner and Sen. Johnny Isakson introduced the Care Planning Act of 2015 (S.1549), with other cosponsors.8  This legislation included coverage under Medicare for advanced illness planning and care coordination services, including structured discussions about treatment options and patient preferences, to Medicare beneficiaries who have a serious progressive or life-threatening illness.  In the House, Rep. Earl Blumenauer and 59 cosponsors introduced the Personalize Your Care Act of 2013 (H.R.1173).9  This legislation included Medicare and Medicaid coverage for advance care planning consultations between patients and doctors or other health care professionals.

Q4: WHAT ARE “ADVANCE DIRECTIVES”?  ARE HEALTH CARE FACILITIES, SUCH AS HOSPITALS OR SKILLED NURSING FACILITIES, REQUIRED TO KEEP RECORDS OF MEDICARE PATIENTS’ ADVANCE DIRECTIVES?

A: Advance directives are written instructions that are intended to reflect a patient’s wishes for health care to guide medical decision-making in the event that a patient is unable to speak for her/himself.  Advance directives typically result from advance care planning and often take the form of a living will, which defines the medical treatment that patients prefer if they are incapacitated, or designation of a certain person as a medical power of attorney.10  Advance directives fall under state regulation, and the required forms for formal advance directives vary from state to state.11

Studies have found that about 4 in 10 Americans ages 65 and older do not have advanced directives or have not written down their own wishes for end-of-life medical treatment.12  Additionally, demographic differences appear to play a role in the likelihood of having advanced directives.13  Specifically, African Americans and Hispanics have advance directives at lower rates compared to whites, as do people with lower incomes and lower levels of completed education.14  Researchers have identified several factors that contribute to these differences, including cultural and religious differences, communication challenges between patients and medical staff, distrust of medical care systems, and awareness of advance directive options.15

The Patient Self-Determination Act, which took effect in 1991, included a list of Medicare requirements for health care facilities regarding advance directives.  Under this law, facilities such as hospitals and skilled nursing facilities must ask each patient upon admission if he or she has an advance directive and record its existence in the patient’s file.16  Facilities cannot require any patient to create an advance directive before providing treatment or care, and likewise, Medicare patients are not required to have an advance directive before they receive care.17  Recent surveys show that among long-term care patients, those receiving care in a facility (such as a nursing home or hospice facility) are more likely to have advance directives in place.18

Q5: DOES MEDICARE COVER HOSPICE CARE? HOW MANY MEDICARE BENEFICIARIES USE HOSPICE?

A: Yes.  For terminally ill Medicare beneficiaries who do not want to pursue curative treatment, Medicare offers a comprehensive hospice benefit covering an array of services, including nursing care, counseling, palliative medications, and up to five days of respite care to assist family caregivers.  Hospice care is most often provided in patients’ homes.19  Medicare patients who elect the hospice benefit have little to no cost-sharing liabilities for most hospice services.20  In order to qualify for hospice coverage under Medicare, a physician must confirm that the patient is expected to die within six months if the illness runs a normal course.  If the Medicare patient lives longer than six months, hospice coverage may continue if the physician and the hospice team re-certify the eligibility criteria.

Of all Medicare beneficiaries who died in 2014, 46 percent used hospice—a rate that has more than doubled since 2000 (21 percent).21  The rate of hospice use increases with age, with the highest rate existing among decedents ages 85 and over.  Hospice use is also higher among women than men and among white beneficiaries than beneficiaries of other races/ethnicities. Hospice care accounts for about 10 percent of traditional Medicare spending in beneficiaries’ last year of life.22  Medicare Advantage plans do not cover hospice care; therefore, when a Medicare Advantage enrollee receives hospice care, his or her hospice coverage falls under traditional Medicare (Parts A and B).23

While many researchers, policymakers, and patient advocates cite the numerous benefits of hospice care in providing appropriate end-of-life care to Medicare patients, questions have been raised about the growth in for-profit hospice agencies, citing differences in the average care needs of the patients they serve compared with those served by non-profit agencies.24

Q6: WHAT IS “PALLIATIVE CARE” AND DOES MEDICARE COVER IT?

A: Palliative care can be integral to end-of-life care in that it generally focuses on managing symptoms and providing comfort to patients and their families.  While palliative care is common among people receiving end-of-life care, it is not necessarily restricted to people with terminal illnesses.  The Center to Advance Palliative Care emphasizes that palliative care is commonly used among people living with serious, complex, and chronic illnesses, including cancer, heart disease, general pain, or depression.25  Close to half (45 percent) of all Medicare beneficiaries have four or more chronic conditions for which palliative care services may be clinically indicated to alleviate symptoms—either in combination with or instead of curative treatment.26  The Medicare hospice benefit (described in Question 7) also covers palliative care for beneficiaries with terminal illness.

Q7: HOW MUCH DOES MEDICARE SPEND ON END-OF-LIFE CARE, AND FOR WHICH SERVICES?

A: Among seniors in traditional Medicare who died in 2014, Medicare spending averaged $34,529 per beneficiary – almost four times higher than the average cost per capita for seniors who did not die during the year.27  Other research shows over the past several decades, roughly one-quarter of traditional Medicare spending for health care is for services provided to beneficiaries ages 65 and older in their last year of life.28

Medicare spending during the year of death decreases with age after age 73 (Figure 1), suggesting that patients, families, and providers may be opting for less intensive and less costly end-of-life interventions for beneficiaries as they grow older.  Specifically, per capita Medicare spending among decedents in 2014 peaked at age 73 ($43,353) and decreased by almost half ($23,181) by age 95.29  Approximately half of total Medicare spending for people who died in a given year goes toward hospital inpatient expenses, while hospice and skilled nursing services each accounted for about 10 percent of Medicare spending.30

 

Q3: ARE POLICYMAKERS, SUCH AS CMS OR CONGRESS, CONSIDERING CHANGES IN MEDICARE’S COVERAGE OF ADVANCE CARE PLANNING?

A: Yes. The agency that runs Medicare, the Centers for Medicare and Medicaid services (CMS), finalized regulations in fall 2015 that allow Medicare to pay physicians and other qualified health care professionals for providing advance care planning to beneficiaries.6  Specifically, in a proposed regulation released July 8, 2015, CMS introduced two new billing codes—previously recommended by the American Medical Association—for advance care planning provided to Medicare beneficiaries.  On October 30, 2015, CMS finalized these proposed provisions, allowing physicians and other health professionals to bill Medicare for advance care planning, as a separate service, starting January 1, 2016. Previous Medicare coverage rules only allowed reimbursement for advance care planning under very limited circumstances.7

In Congress, prior to this new CMS regulation on advance care planning, two bipartisan bills pertaining to advance directives and end-of-life care were introduced—one in the Senate and one in the House.  In the Senate, Sen. Mark Warner and Sen. Johnny Isakson introduced the Care Planning Act of 2015 (S.1549), with other cosponsors.8  This legislation included coverage under Medicare for advanced illness planning and care coordination services, including structured discussions about treatment options and patient preferences, to Medicare beneficiaries who have a serious progressive or life-threatening illness.  In the House, Rep. Earl Blumenauer and 59 cosponsors introduced the Personalize Your Care Act of 2013 (H.R.1173).9  This legislation included Medicare and Medicaid coverage for advance care planning consultations between patients and doctors or other health care professionals.

Q4: WHAT ARE “ADVANCE DIRECTIVES”?  ARE HEALTH CARE FACILITIES, SUCH AS HOSPITALS OR SKILLED NURSING FACILITIES, REQUIRED TO KEEP RECORDS OF MEDICARE PATIENTS’ ADVANCE DIRECTIVES?

A: Advance directives are written instructions that are intended to reflect a patient’s wishes for health care to guide medical decision-making in the event that a patient is unable to speak for her/himself.  Advance directives typically result from advance care planning and often take the form of a living will, which defines the medical treatment that patients prefer if they are incapacitated, or designation of a certain person as a medical power of attorney.10  Advance directives fall under state regulation, and the required forms for formal advance directives vary from state to state.11

Studies have found that about 4 in 10 Americans ages 65 and older do not have advanced directives or have not written down their own wishes for end-of-life medical treatment.12  Additionally, demographic differences appear to play a role in the likelihood of having advanced directives.13  Specifically, African Americans and Hispanics have advance directives at lower rates compared to whites, as do people with lower incomes and lower levels of completed education.14  Researchers have identified several factors that contribute to these differences, including cultural and religious differences, communication challenges between patients and medical staff, distrust of medical care systems, and awareness of advance directive options.15

The Patient Self-Determination Act, which took effect in 1991, included a list of Medicare requirements for health care facilities regarding advance directives.  Under this law, facilities such as hospitals and skilled nursing facilities must ask each patient upon admission if he or she has an advance directive and record its existence in the patient’s file.16  Facilities cannot require any patient to create an advance directive before providing treatment or care, and likewise, Medicare patients are not required to have an advance directive before they receive care.17  Recent surveys show that among long-term care patients, those receiving care in a facility (such as a nursing home or hospice facility) are more likely to have advance directives in place.18

Q5: DOES MEDICARE COVER HOSPICE CARE? HOW MANY MEDICARE BENEFICIARIES USE HOSPICE?

A: Yes.  For terminally ill Medicare beneficiaries who do not want to pursue curative treatment, Medicare offers a comprehensive hospice benefit covering an array of services, including nursing care, counseling, palliative medications, and up to five days of respite care to assist family caregivers.  Hospice care is most often provided in patients’ homes.19  Medicare patients who elect the hospice benefit have little to no cost-sharing liabilities for most hospice services.20  In order to qualify for hospice coverage under Medicare, a physician must confirm that the patient is expected to die within six months if the illness runs a normal course.  If the Medicare patient lives longer than six months, hospice coverage may continue if the physician and the hospice team re-certify the eligibility criteria.

Of all Medicare beneficiaries who died in 2014, 46 percent used hospice—a rate that has more than doubled since 2000 (21 percent).21  The rate of hospice use increases with age, with the highest rate existing among decedents ages 85 and over.  Hospice use is also higher among women than men and among white beneficiaries than beneficiaries of other races/ethnicities. Hospice care accounts for about 10 percent of traditional Medicare spending in beneficiaries’ last year of life.22  Medicare Advantage plans do not cover hospice care; therefore, when a Medicare Advantage enrollee receives hospice care, his or her hospice coverage falls under traditional Medicare (Parts A and B).23

While many researchers, policymakers, and patient advocates cite the numerous benefits of hospice care in providing appropriate end-of-life care to Medicare patients, questions have been raised about the growth in for-profit hospice agencies, citing differences in the average care needs of the patients they serve compared with those served by non-profit agencies.24

Q6: WHAT IS “PALLIATIVE CARE” AND DOES MEDICARE COVER IT?

A: Palliative care can be integral to end-of-life care in that it generally focuses on managing symptoms and providing comfort to patients and their families.  While palliative care is common among people receiving end-of-life care, it is not necessarily restricted to people with terminal illnesses.  The Center to Advance Palliative Care emphasizes that palliative care is commonly used among people living with serious, complex, and chronic illnesses, including cancer, heart disease, general pain, or depression.25  Close to half (45 percent) of all Medicare beneficiaries have four or more chronic conditions for which palliative care services may be clinically indicated to alleviate symptoms—either in combination with or instead of curative treatment.26  The Medicare hospice benefit (described in Question 7) also covers palliative care for beneficiaries with terminal illness.

Q7: HOW MUCH DOES MEDICARE SPEND ON END-OF-LIFE CARE, AND FOR WHICH SERVICES?

A: Among seniors in traditional Medicare who died in 2014, Medicare spending averaged $34,529 per beneficiary – almost four times higher than the average cost per capita for seniors who did not die during the year.27  Other research shows over the past several decades, roughly one-quarter of traditional Medicare spending for health care is for services provided to beneficiaries ages 65 and older in their last year of life.28

Medicare spending during the year of death decreases with age after age 73 (Figure 1), suggesting that patients, families, and providers may be opting for less intensive and less costly end-of-life interventions for beneficiaries as they grow older.  Specifically, per capita Medicare spending among decedents in 2014 peaked at age 73 ($43,353) and decreased by almost half ($23,181) by age 95.29  Approximately half of total Medicare spending for people who died in a given year goes toward hospital inpatient expenses, while hospice and skilled nursing services each accounted for about 10 percent of Medicare spending.30

 

Q8: DID THE AFFORDABLE CARE ACT (ACA) AFFECT MEDICARE COVERAGE FOR END-OF-LIFE CARE OR ADVANCE CARE PLANNING?

A: No. The final ACA legislation did not include provisions that would allow physicians or other health professionals to seek separate Medicare payment for consultations on advance care planning.  A House-passed predecessor bill (H.R.3200) included provisions that would have established Medicare reimbursement for advance care planning, as well as programs to increase public awareness of advance care planning, but these provisions were dropped from the final ACA legislation.31  Confusion regarding the ACA persisted even after it passed, as seen in a Kaiser Family Foundation survey which found that in 2013, more than one-third (35 percent) of people ages 65 and over incorrectly believed that a panel was created by the ACA to make end-of-life decisions for Medicare beneficiaries.32

Q9: HAS THE INSTITUTE OF MEDICINE (IOM) MADE ANY RECOMMENDATIONS REGARDING ADVANCE CARE PLANNING AND END-OF-LIFE CARE?

A: In fall 2014, the IOM released a comprehensive report, Dying in America: Improving Quality and Honoring Individual Preferences Near the End of Life, which included five recommendations aimed to increase the quality of end-of-life care and improve the ability for patients to choose their own treatment plan.33  In brief, the IOM recommendations call for:

• Coverage of comprehensive care for patients with advanced serious illnesses who are nearing the end of life by both government and private health insurers;
• The development of quality metrics and standards for clinician-patient communication and advanced care planning, with insurance reimbursement tied to performance on these standards;
• Strengthening clinical training and licensing/credentialing requirements in palliative care;
• Federal and regulatory action to establish financial incentives for integrating medical and social services for people nearing the end of life, including electronic health records that incorporate advanced care planning;
• Widespread efforts to provide information to the public on the benefits of advance care planning and the ability to for individuals to choose their own course of treatment.

Q10: HOW DOES THE PUBLIC FEEL ABOUT ADVANCE CARE PLANNING AND MEDICARE’S ROLE IN END-OF-LIFE PREFERENCES?

A: By and large, the public supports having doctors discuss end-of-life care issues with their patients, and having Medicare and private insurance cover these discussions (Figure 2).  A recent Kaiser Family Foundation surveyfound that about 9 in 10 adults (89 percent) say doctors should discuss end-of-life care issues with their patients, yet only 17 percent of adults say they have had such a discussion with their doctor or health care provider.  Among adults ages 65 and older, the share is somewhat higher (27 percent).  Among all adults who said they had not had a discussion with their doctor or other health care provider about end-of-life care wishes, half said that they would want one. The majority of adults (81 percent) say Medicare should cover discussions between doctors and patients about end-of-life treatment options—comparable to the share (83 percent) favoring private insurance coverage for similar conversations.34  (This survey was conducted prior to the release of final regulations allowing Medicare coverage of advance care planning.)

 

Endnotes

 

 

Medicare provides coverage for a wide array of medical and drug benefits, but, with its deductibles, cost-sharing requirements, and lack of an annual out-of-pocket spending limit, many people on Medicare purchase Medigap supplemental insurance to help cover their out-of-pocket costs.

 Roughly 11 million of the 57 million people on Medicare—around 20 percent of all beneficiaries—have a Medigap policy, which helps protect against catastrophic expenses, spreads costs over the course of the year, and simplifies medical bills and paperwork. Thanks to a 1990 federal law, people age 65 and older are able to buy a Medigap policy when they sign up for Medicare, but younger Medicare beneficiaries with disabilities are not granted the same right unless they live in a state that requires it.

Today, Medicare covers 9 million people under 65 with disabilities. Most people under 65 who qualify for Medicare must first become eligible to receive disability insurance benefits (SSDI) and then wait 24 months for Medicare coverage to begin. Given this pathway to Medicare, it may not be a surprise that younger beneficiaries with disabilities have poorer self-reported health status than seniors on Medicare, along with higher rates of cognitive impairments and functional limitations, and lower incomes, with half having income of $17,000 or less. And even with Medicare, beneficiaries under 65 with disabilities report greater difficulty accessing the care they need, sometimes because they cannot afford the cost. For some, this may be related to not having supplemental coverage, such as Medigap, to help with their out-of-pocket costs. In fact, a much smaller share of beneficiaries under 65 with disabilities than seniors have a Medigap policy (2% versus 17%, respectively), and a much higher share have no supplemental coverage whatsoever (21% versus 12%).

The substantially lower rate of Medigap coverage among under age 65 adults with disabilities may be due in large part to the provision in the federal law mentioned above that gives Medicare beneficiaries age 65 and older the right to purchase a Medigap policy during the first six months after they enroll in Medicare Part B and under other limited circumstances, but does not provide the same guarantee to younger people who are entitled to Medicare due to having a disability. According to the Centers for Medicare & Medicaid Services, 31 states have gone beyond the federal minimum standard to require insurers in their states to provide at least one kind of Medigap policy to beneficiaries younger than age 65, but the other 19 states and DC have not (Figure 1).

 

Figure 1: 31 states require Medigap insurers to sell at least one policy to people under 65 with disabilities, but the others do not

 In effect, the 1990 federal law created a gap in Medigap for beneficiaries under 65 with disabilities. Back then, insurers resisted the idea of providing an open enrollment period with guaranteed-issue rights to younger adults with disabilities on Medicare. At the time, many Medigap policies covered some prescription drug costs, and there was particular concern about relatively high drug spending among people under 65 with disabilities that would drive up insurers’ costs, which would lead to higher premiums.

More than 25 years later, things have changed. Medigap policies sold today are prohibited from covering prescription drug costs, now that Medicare Part D provides a prescription drug benefit. This means Medigap insurers are no longer on the hook for their policyholders’ drug costs, which are indeed much higher for younger beneficiaries with disabilities than for seniors, on average, according to our research. But Medicare per capita costs are similar for younger beneficiaries with disabilities and seniors when Part D spending is excluded (Figure 2).

Figure 2: Average Medicare per capita spending in 2014 was similar for beneficiaries under age 65 with disabilities and those over age 65, when Part D drug spending is excluded

 

 

In light of these data, it’s not clear what the justification is for treating younger adults with disabilities differently from older adults when it comes to buying a Medigap policy. Revising federal law related to Medigap open enrollment rights and protections could help to reduce the gap in Medigap coverage between younger and older beneficiaries, help alleviate cost-related access problems among the relatively small but vulnerable group of people under 65 who qualify for Medicare, and provide more equitable treatment to Medicare beneficiaries across the states.

 

Source: Sep 27, 2016 | Tricia NeumanFollow @tricia_neuman on Twitter and Juliette Cubanski