10
companies to offer Medicare Prescription Drug Coverage nationwide;
many others to offer plans regionally, CMS announces...concerns
raised that many plans will not be available next year, premiums
will be raised as seniors are locked in...read news reports from
around the nation with links to stories, from the Kaiser
Foundation...then read comparisons with continuing with the Canadian
option
Ten companies have been approved to offer
stand-alone prescription drug plans through Medicare on a nationwide
basis, and Medicare beneficiaries in all regions of the U.S. will
have their choice of several prescription drug plans,
CMS officials announced on Friday, the
New York Timesreports.
Under the new Medicare prescription drug benefit, all 42 million
Medicare beneficiaries will have access to prescription drug
coverage through private health plans that have signed contracts
with CMS to offer the benefit.
Insurers can begin marketing their plans on Oct. 1, and
beneficiaries will have a six-month period, beginning Nov. 15, to
enroll in the plan before facing financial penalties. Coverage will
begin Jan. 1, 2006. According to CMS, the 10 companies that will
offer beneficiaries stand-alone prescription drug coverage
nationally are
Aetna;
Cigna;
Coventry Health Care;
Medco Health Solutions;
MemberHealth;
PacifiCare Health Systems; Silverscript, a unit of prescription
drug benefit manager
Caremark;
UniCare, a subsidiary of
WellPoint;
UnitedHealth Group; and
WellCare Health Plans (Pear,
New York Times, 9/24).
In addition, several other companies have been approved to provide
coverage on a regional basis. As a result, beneficiaries in all
states will be able to choose among at least 11 plans, and
beneficiaries in heavily populated states, such as New York and
Texas, will have a choice of as many as 20 plans.
The totals do not include prescription drug coverage that will be
offered through Medicare Advantage plans,
AP/Long Island Newsdayreports (Freking, AP/Long Island
Newsday, 9/23).
Standard
Coverage
Details about the coverage to be offered by specific plans were not
available on Friday but should be provided in the next several
weeks, the
Baltimore Sunreports (Salganik, Baltimore
Sun, 9/24). Under law,
prescription drug plans are required to provide coverage at least as
good as Medicare's standard coverage (New
York Times, 9/24). The 2003 Medicare law defined
standard prescription drug coverage as the following: Individuals
will be responsible for a $250 annual deductible and 25% of
subsequent drug costs up to $2,250. The beneficiary then will be
responsible for all of the next $2,850 in out-of-pocket drug costs
until total spending reaches $5,100, after which Medicare will pay
95% of drug costs (Lee,
Washington Post,
9/24). Medicare rules require that participating drug plans cover at
least two drugs in each major medication category (Baltimore
Sun, 9/24). The Bush
administration has estimated the coverage, which will cost the
federal government $720 billion over the first 10 years, will save
beneficiaries an average of $1,300 annually. An estimated 30 million
beneficiaries are expected to enroll in 2006 (Washington
Post, 9/24).
Plan Differences
Many plans likely will cost less or provide more generous coverage
than the standard, CMS officials said. According to the
Wall Street Journal, some plans will eliminate the
deductible, provide additional coverage for generic medications or
require beneficiaries to make copayments for prescriptions instead
of paying a percentage of the cost (Lueck/Fuhrmans,
Wall Street Journal,
9/24). According to CMS, monthly premiums will average $32, and
every state except Alaska will have at least one Medicare drug plan
with a monthly premium less than $20. In 44 states, at least one
Medicare Advantage plan will offer coverage without premiums (New
York Times, 9/24).
Plan Premiums
Aetna will charge premiums ranging from $27 to $68 per month,
depending on the plan and where the beneficiary lives. Cigna, which
will offer three different drug plans in all 50 states, will require
premiums ranging from $30 to $52 per month. Cigna's most generous
plan will cover generic drugs during the so-called "doughnut hole"
in coverage. PacifiCare also will offer three plans nationally,
charging premiums ranging from $19.02 per month to $34.88 per month,
depending on the state. MemberHealth, a Cleveland-based PBM, will
cover generic drugs at no cost under one of its plans, and Medco
will offer coverage for premiums ranging from $27 to $35 per month.
Humana, which will offer drug plans in 46 states, said at least
one of its plans will cost consumers less than $20 in monthly
premiums in many states (Wall
Street Journal, 9/24).
Blue Cross and Blue Shield officials said they will provide
stand-alone plans in 41 states (New
York Times, 9/24). According to CMS, Medicare
Advantage plans will offer prescription drug benefits in every state
except Vermont and Arkansas, and 37 states will offer coverage
through regional PPOs.
Comments
"Medicare is taking a historic step today toward coverage that will
bring the best of modern medicine to our beneficiaries,"
HHS Secretary Mike Leavitt said on Friday (Pugh,
Philadelphia Inquirer,
9/24). He added, "Thanks to the range of options; ... everyone in
Medicare will be able to choose a prescription drug plan that
addresses their individual concerns about cost, coverage and
convenience" (Reichard,
CQ HealthBeat,
9/23). McClellan said, "Drug plans are offering better benefits and
lower prices than independent experts had predicted because they are
competing to serve everyone in Medicare. A lot of people said this
couldn't be done on time, couldn't be done nationwide. We proved
them wrong" (New York Times,
9/24). Tricia Neuman, a
Kaiser Family Foundation vice president and director of its
Medicare Policy Project, said, "It's really clear the drug
benefit has attracted many, many businesses from throughout the
country. What's less clear and really important is what they're
offering and how seniors will respond to the opportunity to enroll"
(AP/Long Island Newsday,
9/23). She added, "Choices can present opportunities, but the
question is: What will seniors do when they face so many choices?
Some will comparison shop, others might be heavily influenced by
marketing and some may be paralyzed by so many choices" (Washington
Post, 9/24).
Educational
Efforts
CMS officials said that they will be increasing efforts to help
beneficiaries select a prescription drug plan. Officials said they
already have helped organize 140 networks of community groups --
including businesses and pharmacies -- to counsel beneficiaries (Japsen,
Chicago Tribune,
9/24). CMS also included an insert in Sunday's
Parade magazine that
contains information on the drug benefit. In addition, beginning in
mid-October, consumers will be able to call a toll-free number and
check the Medicare
Web site to learn more about plans. In addition, CMS next month
will mail to beneficiaries the "Medicare & You" handbook, which will
contain information about plan choices. "Based on costs, coverage
and convenience, we will help people find a personalized plan that
is best for their specific needs," McClellan said, adding, "There
are going to be a lot of resources to help people sort through the
information" (Washington Post,
9/24). CMS on Friday also established a Web-based "cost estimator"
to show how much money beneficiaries can save by signing up for a
plan, but according to the
Journal, the tool "assumed the lowest published
premium in a person's state, which tended to be lower than what a
person might actually pay" (Lueck/Fuhrmans,
Wall Street Journal,
9/24).
Reaction
Ron Pollack, executive director of
Families USA, said, "Seniors are going to be absolutely
bewildered by the choices" (Mussenden,
Media General/Richmond
Times-Dispatch, 9/24). Robert Hayes, president of
the
Medicare Rights Center, said, "The number and complexity of
these plans are paralyzing for people on Medicare" (Baltimore
Sun, 9/24). Hayes also
expressed concern about the risk for fraud and identity theft
because insurers will be able to promote their products to
beneficiaries through telemarketing. "It's going to be open season
for bad guys to exploit vulnerable older Americans," he said,
adding, "Some legitimate companies will play by the rules, but let's
face it -- it's an open invitation for confused consumers to give
out personal information." McClellan said CMS is working with
private contractors to detect fraudulent schemes and improper
business practices (Washington
Post, 9/24). He also said CMS is working with law
enforcement agencies to monitor fraud and abuse in the program, the
Los Angeles Timesreports. "Not one of these plans is allowed to call
them up or go to their homes unsolicited and ask for personal
financial information," McClellan said, adding, "If someone calls up
saying they are from Medicare and asks you to give them financial
information, don't do it" (Alonso-Zaldivar/Vrana,
Los Angeles Times,
9/24).
'Shakeout'
Ahead?
According to CQ HealthBeat,
the announcement on Friday "fueled industry speculation that many
plans would drop out in 2007 and that others would sharply raise
premiums." Some experts on the Medicare managed care market
expressed concern that the large number of insurers offering
coverage under the new drug benefit means many of them are only
"testing the waters" (CQ HealthBeat, 9/23). McClellan said independent actuaries
reviewed the proposals by participating insurers to ensure they had
viable business plans. He added that beneficiaries will be able to
switch plans in one year, predicting that many will do so because
competition will result in "better benefits" over time (Chicago
Tribune, 9/24).
Related Coverage
The Journal on
Monday published a question-and-answer piece designed to help
beneficiaries understand the new drug benefit before enrollment
begins. The article addresses such issues as which choices will be
available, how to enroll, subsidies for low-income beneficiaries,
drugs that will be covered and employer-sponsored coverage (Lueck,
Wall Street Journal,
9/26).
Broadcast
Coverage
NPR's "All
Things Considered" on Friday reported on the announcement. The
segment includes comments from McClellan (Rovner, "All Things
Considered," NPR, 9/23).