Measure would cut some copays for seniors

WASHINGTON—Legislation introduced in the Senate to create a pilot program using value-based insurance design principles could prove beneficial to employers that provide retiree drug coverage if it is expanded to cover all Medicare beneficiaries, benefits experts say.

If passed, the Seniors' Medication Copayment Reduction Act of 2009, S. 1040, would reduce or eliminate copayments for the drugs used in the treatment of 15 medical conditions (see box) under selected Medicare Advantage plans that offer Part D prescription drug benefits.

The objective is to lower Medicare beneficiaries' out-of-pocket drug costs thereby increasing their compliance with prescribed drug regimens and reducing the likelihood of the need for more expensive treatment later on.

Backers of the measure expect the pilot to show lower costs for participating Medicare beneficiaries, who are more likely than the general population to have chronic conditions and take multiple medications. If that is the case, the legislation calls for expanding the project beyond the initial pilot plans.

“The one-size-fits-all copays that most patients face today does not distinguish high-value treatments from low-value treatments,” said Dr. Mark Fendrick, co-director of the Center for Value Based Insurance Design at the University of Michigan in Ann Arbor, which was the driving force behind the legislation. “The inclusion of value-based design into the Medicare program will show that this approach can produce more health for every taxpayer dollar spent,” said Dr. Fendrick, who has been working closely with the legislation's cosponsors, Sens. Debbie Stabenow, D-Mich., and Kay Bailey Hutchinson, R-Texas.

The approach also could save money for employers that provide prescription drug coverage to Medicare-eligible retirees, according to Chantel Sheaks, a principal with Buck Consultants L.L.C. in Washington.

“The Medicare VBID demonstration project could help employers that are providing Medicare wraparounds,” she said. Although the VBID concept has been applied with some success by many private employers, such as Pitney Bowes Inc. and Marriott Inc., and as part of the Diabetes Ten City Challenge, this legislation—if enacted—would be the first time it is applied to a publicly funded program.

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