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Medicare Drug Program News
Medicare's Open Enrollment Period Opens Thursday
with More Confusion Than Ever
 Nov. 12, 2007 With the Medicare open enrollment
period arriving on Thursday, more senior citizens and media reporters
are looking at the drug plans available for 2008 and finding there may
be more confusion that ever. A report in KaiserNetwork.org says
three-fourths of senior citizens in stand-alone plays may see premium
increases, while some plans are reducing fees. There is growing concern, too, about the difference in
quality in Medicare Advantage plans and the swing to private
fee-for-service plans. Most consumer advocates are advising senior
citizens to take a close look at changes in their plan for 2008 and what else is
available.
Three-Quarters with Stand-Alone Prescription Drug
Plans Could Face Premium Increases
The open enrollment period for the Medicare Part D
prescription drug benefit begins Thursday and continues through the end
of the year, and beneficiaries should "look closely" at their plans
because many of them are increasing premiums, copayments and
deductibles, the
Baltimore Sun
reports. According to consulting firm
Avalere Health,
monthly premiums for 2008 on average are increasing 21% (Salganik,
Baltimore Sun, 11/11).
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The
Kaiser Family
Foundation on Wednesday released data showing that
three-quarters of Medicare beneficiaries enrolled in stand-alone drug
plans could face premium increases in 2008 and monthly premiums will
increase 17%, if enrollees do not switch plans. The Kaiser Family
Foundation cites about a 5% increase in 2007, based on actual enrollment
(Macias,
Los Angeles Times,
11/10). A number of plans will "raise their premiums significantly in
2008," according to the
Winston-Salem
Journal.
UnitedHealth Group's
AARP
Plan-Saver, which has about 900,000 beneficiaries, will increase its
premium by 87%, according to Avalere (Jackson, Winston-Salem Journal,
11/12). According to the Kaiser Family Foundation,
Humana's
PDP Standard plan has increased premiums almost threefold since its
debut in 2006. That plan has some of the "heaviest enrollment,"
according to
USA Today.
Tricia Neuman, a Kaiser Family Foundation vice
president and director of the Foundation's
Medicare Policy
Project, said, "If seniors don't switch plans, they could
well experience an increase in their premiums and, for some, it could be
a fairly large increase" (Appleby, USA Today, 11/12).
Selecting a Plan
Although some plans are reducing their premiums,
beneficiaries should note that the best choice might not be the "one
with the lowest premium," but rather the "one that will mean the lowest
total cost, over the year" for medications, according to the Sun.
Seniors should consider the so-called "doughnut
hole" coverage gap, under which beneficiaries are required to pay for
drugs after $2,510 in costs have accrued for the year. The gap ends once
total drug costs hit $5,726.35. Some plans cover generic drugs during
the doughnut hole (Baltimore Sun, 11/11).
According to USA Today, only one insurer, which
serves beneficiaries in Florida, covers brand-name drugs during the gap
(USA Today, 11/12). Once the gap ends, beneficiaries receive all future
drugs for a copay of $5.60 or less, according to the Sun.
In addition to doughnut hole coverage,
beneficiaries also should consider that plans have different copays,
lists of covered drugs and pharmacy networks (Baltimore Sun, 11/11).
Seniors will have plenty of choices, with most states having 50 or more
plans, according to USA Today.
CMS
officials said that beneficiaries will be able to keep premium costs low
in 2008. Herb Kuhn of CMS said, "In every state, people will be able to
find a plan that costs less than $20 a month" (USA Today, 11/12).
Avalere President Dan Mendelson said, "The reality
of the Medicare experience is that beneficiaries have been very loyal
thus far to their initial plan selections. If consumers stick to their
choices again, they are likely to see a dramatic increase in their
monthly premiums" (Winston-Salem Journal, 11/12).
Medicare Advantage Plans
Beneficiaries also have the choice of enrolling in
more comprehensive health insurance plans that include prescription drug
coverage through Medicare Advantage. However, not all MA plans have drug
coverage. An MA plan "might be a good deal," but beneficiaries should
understand the terms before signing up, according to the Sun (Baltimore
Sun, 11/11). Critics of MA have said that federal subsidies to the plans
should be reduced, a move that is under consideration in Congress.
Kathy Batteer, vice president for Medicare of
University of
Pittsburgh Medical Center's UPMC for Life HMO Rx Enhanced
health plan, said that if MA payments are cut, it will be "hard, if not
impossible, for Medicare Advantage plans to offer the benefits they do
today" (Fahy,
Pittsburgh
Post-Gazette, 11/12).
Low-Income Subsidies, Special Needs Plans
The open enrollment period also will bring changes to beneficiaries who
receive the drug benefit's low-income and disabled subsidies, according
to the Times. The changes are taking place because the plans in which
many of these beneficiaries are enrolled no longer meet the subsidy
program's requirements.
Beneficiaries in the subsidy, who pay no premiums
or reduced rates, automatically might be placed in a new plan for 2008
if they opted to not choose their own plan when enrolling in the
program. About 2.1 million beneficiaries will be affected. Another
440,000 beneficiaries who elected to choose their own plan meeting the
subsidy's requirements will have to select another plan (Los Angeles
Times, 11/10).
Meanwhile, the number of special needs plans, which
target beneficiaries with chronic conditions such as diabetes or high
cholesterol, is increasing next year, according to the Post-Gazette.
Abby Block, director of the center for beneficiary choices at CMS, said
that the number of special needs plans will rise by 58% in 2008.
Block said the reason for the increase in these
plans might be because the formula used to pay insurers changed and now
takes a patient's health status into account. Block said that it is
unclear if the special needs plans will offer improved benefits but that
the effect is "something we're trying very hard to measure" (Pittsburgh
Post-Gazette, 11/12).
MedPAC Finds Uneven Quality in Newer Medicare
Advantage Plans
Medicare Payment
Advisory Commission officials at a meeting on Friday
expressed concern over data showing differences in quality among newer
Medicare Advantage plans and increasing enrollment in private
fee-for-service MA plans,
CQ HealthBeat
reports.
A Medicare survey designed to assess changes in
physical and mental "health outcomes" for people enrolled in MA plans
found that over the period 2004 to 2006, beneficiaries in five of the
151 plans rated their mental health as better than expected, compared
with beneficiaries in 18 plans during 2003 to 2005 and in 27 plans over
2002 to 2004.
In addition, beneficiaries in 13 plans reported
that their physical health was worse than expected from the 2004-2006
period, compared with zero plans in the 2003-2005 and 2002-2004 periods.
Separately,
National Committee
on Quality Assurance data released last month found that
commercial and Medicaid managed care plans showed greater improvement on
a larger number of quality performance measures compared with MA plans,
MedPAC staffer Carlos Zarabozo said.
According to Zarabozo, MA plans improved on seven
of 38 measures from 2005 to 2006, while commercial plans improved on 30
out of 44 measures and Medicaid plans on 34 out of 43 measures.
In addition, Zarabozo cited data that found 24% of
MA plans provided routine eye exams for fewer than 50% of diabetic
beneficiaries to assess whether their vision was declining, and about
half of the plans provided routine eye exams for fewer than 60% of
diabetic beneficiaries.
Older MA plans were more likely to provide the
exams than plans that signed contracts on or after June 1, 2004. The
surveys included data on HMOs and PPOs but not the private
fee-for-service plans, which are not required to provide quality data.
Special Needs Plans
The meeting also addressed special needs plans,
which are experiencing a surge in enrollment and receive higher
reimbursement than other MA plans. SNPs are intended to improve quality
and lower costs by more carefully managing care for chronically ill
Medicare beneficiaries. However, SNPs are not subject to requirements to
ensure that they offer that type of specialized care, according to
MedPAC staffer Jennifer Podulka.
Podulka issued a set of eight draft recommendations
to establish performance measures for SNPs and to evaluate their
performance within the next three years. MedPAC in December will vote on
the recommendations, "in a bid to influence Medicare legislation pending
in Congress," according to CQ HealthBeat.
Comments
Zarabozo at the meeting said, "Evaluating various
data sources, what we have found is the most recent data on quality in
MA plans show a need for improvement," adding, "They also show that
there is a substantial variability across plans in their performance,
and performance in newer plans is generally poorer" than performance in
the older plans.
MedPAC Chair Glenn Hackbarth said, "A number of
things are depressing about these results," adding, "I think that one of
them is that I fear that we are going backwards, that the policy changes
that we made in this program are converting Medicare Advantage from a
program that's leading edge where we reward organized systems that
reduce costs and improve quality ... that we're going to private fee for
service, that has little potential to do either. These results are just
a reflection that we're not evolving, we're devolving."
MedPAC commissioners said that the commission
should more forcefully state its position on MA plans: The plans should
be accountable for the care they provide and should be paid based on the
quality of their performance. Commissioner Nicholas Wolter said, "We
want not only reporting, but also performance," adding, "I think we
should be very strong on this" when making recommendations to Congress.
Industry Response
Mohit Ghose, spokesperson for
America's Health
Insurance Plans, said that MedPAC staff should not draw the
wrong conclusions from the data, CQ HealthBeat reports. He noted that
traditional Medicare does not manage care or evaluate quality of care,
meaning that quality of care for that system is largely unknown. Even MA
plans with poorer performance have benchmarks against which improvements
can be made, Ghose said. Ghose also said that the higher performance of
older plans versus new plans should not be surprising because it takes
time to enroll beneficiaries in the plan and successfully improve the
quality of their care (Reichard, CQ HealthBeat, 11/9).
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