EOM exercise drugs - confused

[David100]

I am confused. I've set up my drug plan so that post 65 retirees pay $10 per prescription up to $275, then from $275 to $15,375, they pay the lesser of $10 per prescription or 25% of the drug and then above $15,375, they pay nothing.

The trouble is that I can't cost this because for people in the $275 - $15,375 range, I don't know how much they are paying in co-pays since I don't know how much the cost of each drug is. For example, if someone has $1,000 in claims which is 10 drugs, is that $100 per drug which would mean the retiree pays $10 in co-pays per drug (or $100 total) or is it that the first drug was $730 for which the retiree paid a $10 co pay and then the next 9 drugs were each $30 and the retiree paid $7.50 in co-pays for each of those, for a total of $77.50 in co-pays.

I had a similar problem with people over $15,375 in claims but since so few people hit that cap, it had a deminimis impact on my results. The $275 - $15,375 bucket however had a non-negligible impact.

Did other people have this problem? How did you deal with it?

[Lane Meyers]

Originally Posted by David100

I am confused. I've set up my drug plan so that post 65 retirees pay $10 per prescription up to $275, then from $275 to $15,375, they pay the lesser of $10 per prescription or 25% of the drug and then above $15,375, they pay nothing.

The trouble is that I can't cost this because for people in the $275 - $15,375 range, I don't know how much they are paying in co-pays since I don't know how much the cost of each drug is. For example, if someone has $1,000 in claims which is 10 drugs, is that $100 per drug which would mean the retiree pays $10 in co-pays per drug (or $100 total) or is it that the first drug was $730 for which the retiree paid a $10 co pay and then the next 9 drugs were each $30 and the retiree paid $7.50 in co-pays for each of those, for a total of $77.50 in co-pays.

I had a similar problem with people over $15,375 in claims but since so few people hit that cap, it had a deminimis impact on my results. The $275 - $15,375 bucket however had a non-negligible impact.

Did other people have this problem? How did you deal with it?

Where are you getting $15,375 from?

[jrhurt]

David, were you able to get it to work this way. My initial thought was to set it up exactly as you described. I just made a uniform assumption on cost per claim, but it doesn't seem like it will work as I move forward on the task. I can come up with a formula that gives me a similar cost, but it just doesn't make as much sense as having it exactly offset the added cost.

[HatCapitol]

Originally Posted by David100

I am confused. I've set up my drug plan so that post 65 retirees pay $10 per prescription up to $275, then from $275 to $15,375, they pay the lesser of $10 per prescription or 25% of the drug and then above $15,375, they pay nothing.

The trouble is that I can't cost this because for people in the $275 - $15,375 range, I don't know how much they are paying in co-pays since I don't know how much the cost of each drug is. For example, if someone has $1,000 in claims which is 10 drugs, is that $100 per drug which would mean the retiree pays $10 in co-pays per drug (or $100 total) or is it that the first drug was $730 for which the retiree paid a $10 co pay and then the next 9 drugs were each $30 and the retiree paid $7.50 in co-pays for each of those, for a total of $77.50 in co-pays.

I had a similar problem with people over $15,375 in claims but since so few people hit that cap, it had a deminimis impact on my results. The $275 - $15,375 bucket however had a non-negligible impact.

Did other people have this problem? How did you deal with it?

I set my plan up differently. Since the Medicare benefits are based on total annual drug costs but the retiree costs under the preferred plan are based on the number of prescriptions, I had the preferred benefits just specify number of prescriptions. My plan was:

"Plan will pay all costs above $10 for each of the first 27 prescriptions in a year [this is not precise, but can't use 27.5 prescriptions]. After the first 27 prescriptions, the Plan will pay 75% of the cost of each prescription above $40. After the total costs of the retiree and the plan have reached $4,050, the Plan will cover no additional costs."

One question I have. The exercise says that for some individuals, Medicare benefits will be higher than preferred benefits, but I see no such lives. Did anybody else not see any of these?

[langstafftigerpizza]

Originally Posted by HatCapitol

One question I have. The exercise says that for some individuals, Medicare benefits will be higher than preferred benefits, but I see no such lives. Did anybody else not see any of these?

For prescription drug coverage, doesn't the Medicare provide better benefits for retiree who claims more than the OOP limit whereas the same individual will have to potentially pay more than the OOP limit under the preferred plan?

[green83]

Originally Posted by HatCapitol

I set my plan up differently. Since the Medicare benefits are based on total annual drug costs but the retiree costs under the preferred plan are based on the number of prescriptions, I had the preferred benefits just specify number of prescriptions. My plan was:

"Plan will pay all costs above $10 for each of the first 27 prescriptions in a year [this is not precise, but can't use 27.5 prescriptions]. After the first 27 prescriptions, the Plan will pay 75% of the cost of each prescription above $40. After the total costs of the retiree and the plan have reached $4,050, the Plan will cover no additional costs."

One question I have. The exercise says that for some individuals, Medicare benefits will be higher than preferred benefits, but I see no such lives. Did anybody else not see any of these?

For the life of me, I can't get $187 as the cost of this supplemental plan (I get $163)

This is what I have for what the participants pays:
if number of prescriptions<=27, $10*number of prescriptions
else $10*27 + if(claim<40, claim, 40+0.25*(claim-40))*number of prescriptions in excess of 27

Then I follow similar steps as for Medicare Rx to incorporate the out-of-pocket maximum of $4,050.

Thanks in advance!!

[Crespie6]

hey there, are you still working on this? i've had this module on my desk for about 8 months and i'm looking to start it now. would be useful to have someone else forcing me to work through it!

[Crespie6]

Starting to look at this again after a heavy work period. Let me know if anyone else is looking at it. Thanks