40. Addressing Out-of-Pocket Costs for Older Adults with PAN Foundation’s Amy Niles

Published November 10, 2021

Listen and subscribe to This is Growing Old, a podcast from the Alliance for Aging Research

Show Notes

Being able to afford out-of-pocket prescription drug medications is a problem for millions of Americans, especially older adults. Every year, Medicare beneficiaries pay on average over 3,200 in out-of-pocket expenses for prescription drugs. For an older adult on a fixed income, this is no small chunk of change. Alliance for Aging Research Vice President of Public Policy Michael Ward is joined by Amy Niles, Executive Vice President of the PAN Foundation to talk about why out-of-pocket costs are so high, the real-world impacts of growing out-of-pocket costs for older adults, and what we can do about it.

Episode Transcript

Michael Ward:

Hello, and welcome to This Is Growing Old. My name is Michael Ward and I am the Vice President of Public Policy at the Alliance for Aging Research. Being able to afford out-of-pocket prescription drug medications is a problem for millions of Americans, especially older adults. Every year, Medicare beneficiaries pay on average over 3,200 in out-of-pocket expenses for prescription drugs. For an older adult on a fixed income, this is no small chunk of change.

Michael Ward:

Today I’m joined by Amy Niles, Executive Vice President of the PAN Foundation. I’ll talk to Amy about why out-of-pocket costs are so high, the real-world impacts of growing out-of-pocket costs for older adults, and what we can do about it. Amy, thank you so much for joining us today on This Is Growing Old.

Amy Niles:

Well, thanks for inviting me, Michael, and thanks to the Alliance for Aging Research for participating today.

Michael Ward:

Well, it’s our pleasure to have you and any know that we’re going to talk about some time-sensitive items today. So this is a really timely conversation due to the conversations going on when Capitol Hill around this issue. So just for any listeners, we are recording the second week of November in case these things do change by the time that you listen to this podcast.

Michael Ward:

So Amy, as we talked about, you are the Executive Vice President of the PAN Foundation. So for the audience, could you just please share a little bit about the mission of the PAN Foundation for the audience?

Amy Niles:

Sure. I’m glad to. The PAN Foundation stands for the Patient Access Network Foundation, but it’s a very long name. So we typically go by PAN. We are an independent not-for-profit organization. We were established in 2004. And our mission is to help people who are underinsured afford their treatment by providing grants that cover the out-of-pocket costs for their prescription medications. So we provide grants to people who are either federally insured, such as Medicare beneficiaries or people who are commercially insured.

Amy Niles:

Today PAN operates around 70 different disease assistance programs and they are helping people who are living with life threaten chronic and rare diseases. So these are diseases like Parkinson’s, multiple sclerosis and heart failure. So just to give you an example, if you are a Medicare beneficiary and you have Parkinson’s disease, you’re being treated in this country, your medication is on our formulary which is very, very broad. And your household income is at or below 500% of the federal poverty level, you’re eligible to receive a grant. And that grant will be for Parkinson’s $3,200. And that is designed to cover your out-of-pocket costs for a 12-month period.

Amy Niles:

So we’re humbled to be able to provide this support. Of course, we wish we didn’t have to, but the healthcare system is such that we need to be here. So we are grateful that we have been able to provide help to more than one million patients since 2004. In addition to the copay assistance that we provide which has really been at the core of our safety net, we have other interests as well. We know that patients have so many needs and there are many factors that can impede access to treatment.

Amy Niles:

So as an example, over the last year, year and a half, we launched a transportation program for our patients. We can provide financial assistance, but people have to be able to get to their healthcare provider. They need to be able to get to their pharmacy to pick up their prescriptions. So our patients can now benefit from additional monies that can support their transportation needs.

Amy Niles:

Another example is that we have launched a program to help people enroll in the federal Low-Income Subsidy program. This is a terrific federal program. It’s also called Extra Help, which covers the majority of out-of-pocket costs for prescription medications for very, very low-income beneficiaries. Unfortunately, far too many people don’t even know that this program exists. So we’re helping them enroll.

Amy Niles:

And then finally we have a growing and really evolving interest in social determinants of health. So things like transportation, food insecurity, housing issues, these are all issues that can impact one’s ability to get treatment and stay on treatment. And so we want to do our share to help screen patients for other needs and really help them get to needed resources that may exist nationally or in their communities.

Amy Niles:

In addition to that safety net, I’ll just add that a key part of what we do is to advocate for lower out-of-pocket costs. So we provide the assistance that’s needed, but at the end of the day, we want to lower those costs for patients.

Michael Ward:

Absolutely. And really the work that the PAN foundation does is so vital. And so just want to pause to thank you and your colleagues for all the work that you do day-to-day to help people access the care that they need.

Michael Ward:

And so I guess the next question I’ll ask is specifically out-of-pocket costs for prescription drugs is kind of the topic of the moment. And especially we see there’s a number of seniors that receive their prescription drug coverage through Medicare that maybe have some unique challenges. So could you maybe tell us a little bit about why that’s a case for those Medicare patients?

Amy Niles:

Sure. Over the last, I guess couple of decades, we’ve seen so much innovation in treatment of disease and this is a great thing. So many new treatments are available now for people who are living with serious illness. But unfortunately, so many of these medications come with very high drug prices and very high out-of-pocket costs. I’m reminded of a report that the Kaiser Family Foundation did a couple of years ago. They looked at, I think it was 30 leading branded drugs on the market treating people living with serious illnesses. And they looked at the out-of-pocket costs that patients were having to pay relating to these drugs. And the average out-of-pocket costs for these patients was around $8,000 for a 12-month period. It ranged from around 2000, I think on up to 16 or 17,000, but the average was 8,000.

Amy Niles:

So if you can imagine being a Medicare beneficiary on fixed income of around $26,000. $8,000, $2,000 is a whole lot to afford. Medicare beneficiaries are the only group in this country that do not have a limit on what they pay out-of-pocket for their prescription medications. Everyone else has a limit. This is problematic. When we see Medicare beneficiaries get to the catastrophic phase of their benefit cycle in the benefit design, they’re now paying 5% of drug costs. They have unlimited liability from that point on to the end of the year.

Amy Niles:

So 5% sounds like a very low number, but 5% of an expensive drug is a high number. So these seniors and those on Medicare really need a limit to what they pay out-of-pocket. On top of that, another key problem is that their deductible is reset in January, every single January this happens. So seniors are faced with hundreds, if not thousands of dollars to pay in out-of-pocket costs within the first few weeks of the year.

Amy Niles:

It’s actually when PAN and other charities like PAN are at are busiest. Our phones are ringing off the hook because people need that financial assistance and our patient portals are really busy. So not having the limit on out-of-pocket cost spending and that front end of the year being so problematic are our key issues for our seniors.

Michael Ward:

So I know that you all are working directly with patients on the ground level, really kind of investing. They tell you their stories and their particular situation. So you all understand the real-world situations and the impacts that that patients are facing.

Michael Ward:

And so could you just share with us a little bit about some of the difficult decisions that patients do have to make and some of the real-world impacts that they may face if if they aren’t able to connect with a foundation like PAN that can help them afford their medications?

Amy Niles:

Yeah. No, there are real-world impacts. And I always say the last thing anyone should need to think about when they’re diagnosed with a serious illness is how to pay for their medications or how to pay for their care. They should be solely focused on getting better, but people who are living on fixed incomes are making unfortunate decisions every single day. So we hear this from our patients every day and we’ve done a lot of survey work and it kind of validates what we’re hearing from patients.

Amy Niles:

They are making decisions whether to put food on their table, pay rent, or afford their medications. And oftentimes the decision is that food is going to be more important. They are deciding to split pills in half because to them that’s a way to make the treatment last longer and therefore have reduced costs, but that’s not good for the patient. The healthcare provider has prescribed in a certain way and that shouldn’t be altered.

Amy Niles:

And most dramatically, they’re simply away from the pharmacy counter when they hear what they may need to pay out-of-pocket. It doesn’t take so much for someone to walk away from the pharmacy counter. It might be $40 or $50. And the patient says, “I simply cannot afford that.” So imagine being told hundreds of dollars or even thousands of dollars. So these decisions are unfortunate. No one should have to choose between food and medications. And they can obviously impact one’s health, both short and long-term.

Michael Ward:

Yeah, I think that’s a really important point. And I know there’s been some research that came out earlier this year that showed that patients really feel these effects of out-of-pocket costs and sensitivity to whether those costs grow. Even if they aren’t of lower income that really patients of all income levels, it really is a challenge for them to be able to afford the medications. And often they do make those difficult decisions to maybe think about food and place other things above medicines.

Amy Niles:

Yeah, I would just add that in addition to walking away from the pharmacy counter, another decision they could make, which we never want someone to make is to dip into retirement savings or 401(k)s to pay for what’s necessary. So we know that so many people in this country are in medical debt. And again, that’s an unfortunate situation. We want people to get better. We want people to be able to access the prescription medications that they need.

Michael Ward:

Absolutely. And so as we talked a little bit about at the top of the conversation, there is an ongoing discussion in Washington, D.C. at the federal level about maybe changing some of the rules around Medicare and prescription drugs help patients with the out-of-pocket costs they face when they’re trying to procure prescription drugs.

Michael Ward:

And I’ll just mention as a sidebar that the Alliance for Aging Research currently convenes a project called Project LOOP, which is an ad hoc coalition of patients and organizations committed to addressing patients costs for prescription drugs. And loop stands for lower out-of-pocket. And so maybe for our audience, can you describe the key policies that could lower out-of-pocket cause for older adults?

Amy Niles:

Sure. And I’ll just add, as you know, the PAN Foundation has worked closely as well with the Alliance for Aging Research. And I know our two organizations share similar perspectives on how to lower out-of-pocket costs. So there are a number of things that we advocate for at PAN. And first and foremost is this notion of a Part D cap. The Medicare Part D program must be reformed to have a cap so that seniors and beneficiaries in general have a limit on what they’re paying over a 12-month period for their prescription medications. And we advocate for as low a cap as possible.

Amy Niles:

The second policy is this notion of smoothing. So I spoke earlier about how problematic January is for our Medicare beneficiaries is when the deductible is reset. So instead of facing this enormous financial burden at the beginning of the year, it would be very nice if our beneficiaries had more predictability and could budget better. And that means that these costs were evenly distributed throughout the entire year. It’s like placing a monthly cap on out-of-pocket costs. It will allow them to budget and just not incur so much costs at the beginning of the year. So those are two policy solutions that we have stayed true to over the many years at PAN. I know you’re advocating that as well. There are a few things that we would love to see as well.

Amy Niles:

The third policy relates to the Low-Income Subsidy program. So right now that program is benefiting our most financially vulnerable and it’s individuals who have household income up to 150% of the federal poverty level. We would love to see that threshold increase to 200% so that more individuals could benefit from really a terrific program.

Amy Niles:

Another policy that we think is really important is removing any immunization copays for current and future vaccines that might be developed. We certainly have seen through the pandemic no one had to pay any copays for the COVID vaccine. Well, we would like to see this similarly applied for future vaccines.

Amy Niles:

And then finally I would just like to touch on the importance of dental, vision and hearing benefits in the Medicare program. We know these services are vitally important for our seniors and we know that our seniors are paying a lot out-of-pocket for these services. And we would love to see the Medicare program expanded to include these services. They’re all very important. I know that dental services are expensive, but it’s vitally new needed for our beneficiaries and would love to see reform in that regard.

Michael Ward:

Absolutely. And I know that in addition to the out-of-pocket cost reforms, the cap and the smoothing that you mentioned that the current reconciliation bill as it currently stands does have provisions around vaccinations both in terms of eliminating that copay in the Medicare program for CDC recommended vaccines for the older adult population. And then, but also kind of a little known fact is that in the Affordable Care Act actually eliminated copays for vaccines for states that accepted the Medicaid expansion. However, there were many states that did not accept the expansion. And so currently in the bill right now, there’s also provision that would actually kind of create parity.

Michael Ward:

So if you lived in a non-expansion state, you would also benefit from not having any copays as part of the Medicaid program. And so those are exciting things to have in there. And we do hope that they’ll end up being in the final product so. With that being said, nothing is final, right?

Amy Niles:

Nothing is final. It seems like every day is a new day, but we were pleased to see the immunization piece added. And just while we’re talking about the current congressional focus on the Part D cap. One, obviously we’re glad it’s there. Two, we were very glad to see that it’s $2,000. I know in the past the Senate Finance Committee has considered a cap of $3,100 which would still be an improvement over what we have today, but clearly we would love to see as a cap as possible. And smoothing is currently in the bill as well which is terrific. We hope that at the end of the day when this is finalized, that smoothing provision is really as simple as possible for patients.

Amy Niles:

We don’t want patients also to have to meet certain financial thresholds before smoothing kicks in. We want it to begin really on day one. And we want this option to be available for everyone, for all Medicare beneficiaries. We hope that as it moves forward, CMS is thinking about education that will be needed around cap smoothing. Because you and I talk about this every single day, but for the person out there it’s sometimes hard to understand. So I think patients will need a whole lot of education.

Michael Ward:

So definitely that’s a piece that’s missing in terms of maybe education around smoothing. And I know we talked about hearing dental and vision would be great to have in the final bill that may not be there currently. Are there any changes in terms of the affordability provisions around out-of-pocket costs or anything else that you think could maximize the ability of patients to benefit from potential changes that Congress could still make to the legislation?

Amy Niles:

You know, from our perspective, it’s not too late to include the Low-Income Subsidy program expansion in the bill. And I mentioned earlier about dental, vision and hearing. At the end of the day, we completely understand that you need to have payfors. And the drug pricing legislation piece of this has to provide the funds to pay for all of this. And there’ll be priorities and there’ll be compromises and negotiations. So we understand that things may need to drop out, but from our perspective, the Part D cap and smoothing must not drop out. That must stay in.

Michael Ward:

Absolutely. I think that’s 100% right. And I think to your point, there’s still an opportunity for patients to contact our legislators to let them know that these changes are needed because your voices are really the ones especially as constituents are the ones that these offices listen to most.

Amy Niles:

I’m glad you brought that up because I think that is key. There’s a lot of voice that we can provide as patient advocacy organizations. But I think bringing the patient voices to the Hill, that’s most impactful. So we have over this last year, we’ve had what we call grassroots campaign relating to cap and smoothing. We’ve been encouraging patients to send their messages to members of Congress. I would say that over the last couple weeks we have reinvigorated that campaign and really encouraging now is the time to send your to Congress as they are negotiating and looking to finalize a bill soon.

Michael Ward:

Yeah, I think that’s very important. I’ll just take a brief moment. I represent the Alliance position. That may not represent PAN Foundation’s position, but as we’re considering this bill holistically, I think there’s a lot of great things in this bill for patients. We’ve talked about a lot of those things. I think it’s important for patients to also think about other pieces of the bill that are under discussion. Because this is a huge bill and it’s not only healthcare, it’s actually other things as well. But within the healthcare realm, there’s things that are not affordability-related, but that they could. There are provisions that could impact patient access to prescription drugs.

Michael Ward:

For example, there’s discussion around the government setting a maximum price as a way to help control costs, to help pay for some of these other provisions that we’re talking about. That would be really helpful. However, there’s a trade off in that some of those things could result in reduced access to medications that are currently in the market or potentially to future drugs. And it’s also just important. I think to recognize that the costs to prescription drugs is just very complex.

Michael Ward:

There are many factors that lead to higher drug prices such as just an example that Medicare forces patients to pay their co-insurance, which is the percentage of a drugs cost based on the list price, which is kind of the sticker price of a medication rather than a percentage of the net price that, that your insurer or that your employer might actually pay for a drug. There are other types of changes as well that Congress could consider that could really help lead to additional affordability and as well as may have minimal impact on the current access that US consumers have to innovative therapeutics.

Michael Ward:

So I just wanted to note that. And then I guess going to the next question. While we’re hoping for these affordability provisions to move from proposals to law to really benefit patients soon. Yeah, there’s always a chance that deliberations won’t cross the finish line. So I think just in the context of today, potentially in the future, I know that the PAN Foundation going to be helping patients regardless of what happens here. So what options are available today for older adults who can’t afford their prescriptions because of high out-of-pocket costs?

Amy Niles:

The options are limited unfortunately. So as you know, pharmaceutical companies are prohibited from providing direct financial assistance to people with federal insurance, which is why the charities like PAN are so important to kind of filling this tremendous need within the safety net. So right now there are nine charities and organizations that provide copay assistance. We are one of, I think it’s six independent charitable foundations. And the problem is, I mean, we’re all doing great work and we’re all helping so many patients, but the need is far greater than all of us collectively could provide that service.

Amy Niles:

And on any given day, all the programs that we operate and there are 200-plus programs between these nine organizations, some are open, meaning there’s funding available to give grants and some assistance programs are closed. Meaning, waiting for money to come in so we can start giving grants again. And it is very variable and that’s just sort of the nature of the beast. And it’s a little bit unpredictable, but we’re grateful when we are able to give that assistance. But if you can imagine how difficult it is for a patient to kind of figure out. If you know about the nine organizations who’s providing? Where do I go? What’s open, what’s closed?

Amy Niles:

And so I wanted to take this moment to just mention a really great program that the PAN Foundation started a couple of years ago called FundFinder and FundFinder is a web app. And what we’ve done is through technology track the available assistance at all of these nine organizations sort of in real-time. The information is updated every single hour. So if you register as a user of FundFinder and you can do so at fundfinder.org, you can follow of different disease assistance programs.

Amy Niles:

So I’m going to make up an example and I don’t know whether this is true or not, but just for the interest of explaining this, let’s say you are a patient living with Parkinson’s disease. And let’s say there are three charities today, three charitable foundations that operate Parkinson’s programs, but today all of them are closed. Okay? So you have registered for FundFinder. You’re interested in receiving alerts about Parkinson’s. Tomorrow the program at the PAN Foundation opens and we are able to give grants to patients.

Amy Niles:

Tomorrow. You would receive an alert via a text or email saying the PAN Foundation is open and that really prompts you to call us or to go onto our patient portal to apply for assistance. It’s really been a game changer, not only for patients. I mean, we’re saving them so much time and it’s so much easier to look for assistance, but we’re also helping our healthcare providers and pharmacy staff who have also faced the same challenges. And we’re helping people in call centers. I work with organizations who receive a lot of calls from patients looking for financial assistance, and they’re able to use this app to respond to patient needs. So that is an important program that we hope many people will use until such day that charitable foundations may not be needed.

Michael Ward:

Absolutely. Just for our listeners again, could you mention how to get to FundFinder as well as the PAN Foundation’s website?

Amy Niles:

Sure. The PAN Foundation’s website is simply panfoundation.org. And when someone goes there, they will see a meet all of the disease assistance programs that we operate. They can begin applying for assistance right on our homepage. We have a huge advocacy section so they can learn more about the positions that we advocate for along with our grassroots campaigns and FundFinder can be found at fundfinder.org.

Michael Ward:

Great. So we’re as we come to the end of our time together today, just want to tee up two questions for, Amy, that we ask of all of our guests so.

Amy Niles:

Uh oh.

Michael Ward:

I know it’s a constant and you get to enjoy them as well. So when you were a kid, what did you imagine growing older would be like? And then as we’ve all aged, kind of what has been the most pleasant surprise?

Amy Niles:

Those are great questions. When I was a child and maybe a young teenager, that’s many years ago. I would think about the year 2000 and it would seem like so far away and I would be middle-aged. And to me, I wouldn’t worry about aging because it was so, so far away. And I think about my mother who was truly a role model for me. She was productive. She worked full-time as an educator. She raised three kids. We dealt as a family with a lot of serious illness directly within the family. But it’s interesting because one thing I never heard mention was anything relating to finance distress.

Amy Niles:

Never heard any conversations about being about being able to afford medications or hospital stays or anything like that. So as I think about now, I’m a mother and I have a family. I want to be a lot like my mother, I want to be a role model. I want to work for a very long time. I hoped that the healthcare system would be taken care of all of us and that no one would have to worry about how to pay for care. I never really thought about it much as a child. I just assumed that it was all taken care of. Government or someone was taken care of it. It wasn’t us.

Amy Niles:

But clearly now that I’ve grown up and have worked in this area, we clearly have a lot of gaps and so many challenges relating to access and affordability. What’s pleasantly surprised me? I think that, honestly, so many older adults are working. They are productively contributing in their communities. And that I think is a very good thing. What has surprised me recently perhaps is how telehealth has really helped so many older adults especially if you look back on this past year, year and a half with the pandemic. Telehealth, I think did a lot to help our seniors stay connected with their healthcare providers and hopefully stay in good health as a result.

Amy Niles:

And then the other thing I would add relates to social media. Social media can have its downsides, but I think for many of our older adults, social media has been a good thing. It has allowed them to connect in new ways with family members. Grandmas and grandpas connecting with their grandsons and daughters. And I think at the end of the day, if we can prevent some social isolation, that’s a good thing.

Michael Ward:

Absolutely, absolutely. And Amy, I just want to thank you again for joining us today. It’s been a pleasure to talk with you.

Amy Niles:

Oh, I truly enjoy this and thanks again for inviting me to do this.

Michael Ward:

Our pleasure. So that’s it for this week’s episode. As Amy mentioned, you can learn more about the PAN Foundation at panfoundation.org to learn more about how the Alliance for Aging Research is advocating for meaningful drug pricing reform, please visit agingresearch.org/drugpricing. To learn about easy ways to contact your elected officials about the issues that we discussed today, you can visit loweroutofpocketcosts.org. Thank you for listening to This Is Growing Old. If you’re enjoying the show, please subscribe, rate and review us on Apple Podcasts or the streaming service of your choice. Have a great day.