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State Specific Example: Texas The intersection of business strategy and public policy
© Avalere Health LLC Page 2 Exits and Entrances to the LIS Market in Texas Will Result in the Shift of Many Lives in 2008 2007 Auto-Enrollment Eligible Plans (Texas)2008 Auto-Enrollment Eligible Plans (Texas) Plans Eligible for Auto-Enrollment Lives in 2007 and 2008 BravoRx CIGNA Medicare Rx Plan One Health Net Orange Option 1 HealthSpring Prescription Drug Plan Community Care Rx Basic Prescription Pathway Bronze Plan Advantage Star Plan by Rx America WellCare Classic* Plans Not Eligible to Gain New LIS Lives in 2008, but Retaining LIS Enrollees from 2006 and 2007 Blue MedicareRx Standard First Health Part D - Premier Exits from the LIS MarketEntrants to Auto-Enrollment Market AARP MedicareRx Preferred AARP MedicareRx Saver Humana PDP Standard MedicareRx Rewards Value** WellCare Signature* Aetna Medicare Rx Essentials Health Net Orange Option 2 Scott and White Health Plan Texas Rx Value SilverScript MedicareRx Rewards Standard** Source: Avalere Health analysis using DataFrame®, a proprietary database of Medicare Part D plan features. 2008 data from November 2007; 2007 data from November 2006. *Lives covered by WellCare Signature will be shifted to WellCare Classic in 2008. **Lives covered by MedicareRx Rewards Value will be shifted to MedicareRx Rewards Standard in 2008.
© Avalere Health LLC Page 3 Plans Gaining LIS Lives in Texas Cover Fewer Drugs and Apply More Utilization Management Than Plans Losing Lives* PDP Offering (Texas) # Drugs in 2007 # Drugs in 2008 % Brand in 2007 % Brand in 2008 % Drugs with PA 2007 % Drugs with PA 2008 Plans Losing All Dual Eligible Lives in 2008 AARP MedicareRx Preferred3,7632,62756%64%5%8% AARP MedicareRx Saver3,1672,18448%57%7%11% Humana PDP Standard3,7522,62356%64%6% MedicareRx Rewards Value**2,3871,81840%50%7%11% WellCare Signature***1,1151,12145%48%10%13% Average of Plans Losing All Dual Eligible Lives2,8372,07550%57%6%10% Plans Gaining Dual Eligible Lives in 2008 Advantage Star Plan by Rx America1,5681,37046%55%18%20% Aetna MedicareRx Essentials2,2322,58828%64%13%16% BravoRx1,9991,61145%50%12%10% CIGNA Medicare Rx Plan One3,6301,80156%54%16%27% Community Care Rx Basic1,8351,62744%51%4%14% Health Net Orange Option 12,7542,15352%60%33%21% Health Net Orange Option 23,7372,62456%64%27%19% HealthSpring Prescription Drug Plan1,8531,45544%53%6%12% MedicareRx Rewards Standard**n/a1,816n/a50%n/a11% Prescription Pathway Bronze Plan1,4621,28537%45%3%4% Scott and White Health Plan Texas Rx Value1,1341,13647%50%5%6% SilverScript1,4702,59046%64%7%9% WellCare Classic***1,1151,12145%48%10%13% Average of All Plans Gaining Lives in 20082,0661,78346%56%13%15% Source: Avalere Health analysis using DataFrame®, a proprietary database of Medicare Part D plan features. 2008 data from November 2007; 2007 data from November 2006. *Unweighted **Lives covered by MedicareRx Rewards Value will be shifted to MedicareRx Rewards Standard in 2008. ***Lives covered by WellCare Signature will be shifted to WellCare Classic in 2008.
© Avalere Health LLC Page 4 Texas Plans Gaining LIS Lives in 2008: Smaller Formularies and More Prior Authorization 2,837 2,075 1,783 (n = 5) (n = 13) # Drugs on Formulary % Drugs with Prior Authorization Source: Avalere Health analysis using DataFrame®, a proprietary database of Medicare Part D plan features. 2008 data from November 2007; 2007 data from November 2006. Plans Losing Dual Eligibles in 2008 (2007 formulary) Plans Losing Dual Eligibles in 2008 (2008 formulary) Plans Gaining Dual Eligibles in 2008 (2008 formulary)
© Avalere Health LLC Page 5 Some Texas Plans Expected to Gain or Lose Over 30,000 LIS Lives in 2008 Plan Name (Texas) Approximate # LIS Lives lost/gained (2007-2008)* Plans Expected to Lose LIS Lives in 2008 Humana PDP Standard-36,000 AARP MedicareRx Saver-31,000 WellCare Signature-25,000 MedicareRx Rewards Value-23,000 AARP MedicareRx Preferred-10,000 Plans Expected to Gain LIS Lives in 2008 First Health Part D - Premier+30 Blue Medicare Rx Standard+310 Health Net Orange Option 2+3,000 Health Net Orange Option 1+3,000 Scott and White Health Plan Texas Rx Value +6,000 SilverScript +6,000 CIGNA Medicare Rx Plan One +6,000 HealthSpring Prescription Drug Plan +6,000 Aetna Medicare Rx Essentials +7,000 BravoRx +7,000 Community Care Rx Basic +7,000 Prescription Pathway Bronze +7,000 Advantage Star Plan by Rx America +7,000 MedicareRx Rewards Standard +30,000 WellCare Classic +31,000 Source: Proprietary Avalere Health model; Kaiser Family Foundation reports CMS estimates of how many dual eligibles were auto-enrolled into PDPs by state as of June 11, 2006 and January 17, 2007 *Enrollment rounded to the nearest thousand; First Health Part D - Premier and Blue Medicare Rx Standard are exceptions.
Exhibit 1 NOTE: *Amount corresponds to the estimated catastrophic coverage limit for non-low-income subsidy enrollees ($6,734 for LIS enrollees), which.
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