By Michael O’Connor
Vermont has been on the leading edge of state efforts to implement health care reform, passing legislation to create a statewide health care exchange and to increase access to affordable care through a managed care partnership. The Vermont Agency of Human Services is proposing to be a first in the nation Medicare Plan for Dual Eligibles, based on the Medicaid Managed Care Waiver granted for Global Commitment to Health, and the consumer-centered Medicaid Long Term Care Choices for Care programs. 2
But a recent proposal by the Department of Vermont Health Access appears to be trying to fix one of the few parts of the American health care system that isn’t broken yet – Medicare’s prescription drug coverage (Part D.) In a misguided effort to achieve budget savings, the Health Access proposal would yank Part D coverage for so-called “dual eligibles” – Medicare recipients who also qualify for Medicaid benefits. As it stands now, low income Medicare recipients can choose from more than 30 different prescription drug plans covered by Part D to meet their specific health care needs. If the Health Access proposal is adopted, Vermont’s dual eligibles would be forced into a single plan at a time when everyone else in health care is awaiting the Supreme Court’s decision regarding the Affordable Care Act.
Even as Vermont is considering this proposal, experts are sounding the alarm. According to a paper published in the latest issue of the prestigious journal Health Affairs, “Few states or health plans have experience with coordinating care for dual eligibles within an integrated plan. These findings reinforce the need for caution in considering policies that would rapidly give states the responsibility for coordinating dual eligibles’ care and coverage.”
The problem with Vermont’s proposal is quite extraordinary: The lack of choice in drug plans will result in worse health outcomes and longer hospital stays for many chronic care patients, Having only a single plan that pays for some drug therapies but doesn’t cover all treatment options will inevitably restrict the treatment available to doctors and their patients. Successfully treating chronic illnesses necessarily entails allowing doctors to exercise their medical judgment. The lack of response to this concern raised previously before the Vermont House and Senate health care committees, does not ensure people with diseases like Parkinson’s quicker access to safe and effective therapies. Less than two weeks ago the U. S. House of Representatives (by a vote of 387-5) approved their version of the Fast Act, (H.R. 4132) that will expedite the approval on new drugs and therapies after the U.S. Senate voted on their own version of this legislation including portions of the TREAT Act. (S 2113) which is similar to the FAST act. The two versions are currently moving in conference with a desire for a unified version by the end of June for the president to sign by September of this year to keep FDA functioning at its current level.
Whether it’s treating arthritis, Parkinson’s or diabetes, doctors will tell you that insurance pressure to change the frequency, dosage, delivery or brand of prescription drugs inevitably does more harm than good. Multiple studies have associated Part D and its array of treatment options with positive health outcomes on everything from heart disease to lower hospitalization rates.
By contrast, one Harvard study found that the comparatively limited drug coverage in Medicaid plans “resulted in a 35 percent reduction in the use of clinically essential drugs … and a 200 percent increase in the use of services (such as nursing homes and emergency mental health services) whose costs exceeded the cost of drugs.”
Medicare Part D has also proven to be a startlingly cost-efficient and effective program. Enacted in 2003, as of last year 29.5 million Americans were enrolled in the program. According to the nonpartisan Congressional Budget Office (CBO), costs for Medicare Part D from 2004 to 2013 will come in 46 percent lower than initially projected. For a government program, these kinds of savings are unheard of.
And by encouraging more insurance competition in the prescription drug market – exactly the opposite of what Vermont’s proposal to eliminate plans will do – Medicare Part D is actually lowering the cost of drugs. A study by economists from the University of Southern California and Boston University found that “on average, Part D lowered retail prices for commercial insured’s by 5.8% to 8.5%.” It’s highly doubtful that the state of Vermont can get a better deal by eliminating competition and, in effect, instituting price controls.
Vermont’s leaders can be commended for taking a place at the vanguard of state-based health care reform efforts. But this proposal to eliminate the Medicare Part D coverage of low-income Vermonters won’t achieve the hoped-for savings and will reduce the quality of patient care. Let’s make sure the carts not put before the horse on this one as we all await the decision from the Supreme Court.
Michael O’Connor is the President,Vermont Chapter American Parkinson’s Disease Association, Inc.
2 State Demonstrations to Integrate Care for Dual Eligible Individuals Vermont January 31, 2011
5 Insurers’ Negotiating Leverage and the External Effects of Medicare Part D
Darius Lakdawalla University of Southern California and NBER
Wesley Yin Boston University and NBER April 2011