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Officials Confirm Medicare Will Have Fewer Drug
Plans in 2007
CMS Administrator opposes extending May 15
enrollment deadline
March 8, 2006 – Earlier reports that the Medicare
Drug Program will include fewer plans next year was confirmed yesterday
by Health and Human Services Secretary Mike Leavitt, who told insurance
executives that market forces have helped lower drug prices and will
enable a reduction in the number of plans next year. KaiserNet.org also
reports that Centers for Medicare and Medicaid Services Administrator
Mark McClellan says he is opposed to extending the May 15 deadline for
enrollment in Medicare Part D.
Medicare: Medicare Drug Benefit Program To Feature
Fewer Plans Next Year, Officials Say
 Market forces have helped lower prescription drug
prices and will reduce the number of plans offered under the Medicare
prescription drug benefit next year,
HHS Secretary Mike Leavitt told insurance executives on Tuesday at a
meeting sponsored by
America's Health Insurance Plans,
CQ HealthBeat reports.
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Feb. 27, 2006 - Despite the ardent defense by
President Bush of the Medicare drug program, even the Centers for
Medicare & Medicaid is considering changes that may help eliminate some
of the confusion. The agency has sent a memo to drug plan sponsors
saying they are considering limiting the number of plans each insurer
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March 2, 2006 – A bill addressing many of the
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Medicare rather than private insurance companies has been introduced by
Sens. Edward Kennedy (D-Mass.) and Debbie Stabenow (D-Mich.). It would
also eliminate the "doughnut hole," and allow Medicare to negotiate
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"The market has very clearly driven the
prices down," Leavitt said, adding, "We believe that the market will
also simplify this program."
Calling the initial version of the drug
benefit "Medicare Part D 1.0," Leavitt told executives that "Part D 2.0"
would reflect the "need for simplification and standardization" in the
program.
CMS Administrator Mark McClellan said that "some plans are
definitely proving to be more popular than others" and that there is
"some consolidation."
He added, "I suspect we are going to see some more
of that, particularly from plans that haven't generated a large level of
enrollment." However, CMS might "not be leaving it entirely up to market
forces to reduce plan offerings," CQ HealthBeat reports (Reichard, CQ
HealthBeat, 3/7).
In late February, CMS sent a memo to insurers
requesting feedback on a proposal to limit insurers with Medicare drug
plans to offering one "basic" benefit plan and one "enhanced" benefit
plan in each region. For this year's coverage, insurers were allowed to
sponsor up to three plans per region (Kaiser
Daily Health Policy Report, 2/27). In the meeting Tuesday, Leavitt
cited elimination of "separate applications ... for every plan" as an
example of the program's future simplification.
Customer Service
Leavitt said that drug plans' customer service is improving but has "a
ways to go yet." He said he is concerned about the number of
beneficiaries who have yet to receive a plan number. He added that
"plans need to do a better job of responding to inquires by
beneficiaries and pharmacists" and that plans need to pay pharmacists
faster, particularly those in rural areas.
He added, "I am also
concerned that there are too many people who are getting answering
machines during business hours asking them to call back at a different
time." Leavitt and McClellan said CMS is increasing monitoring of plans'
call centers and their speed at processing enrollment applications. CMS
is designing performance measures to track those functions and will
release the data to the public, McClellan said. (CQ HealthBeat, 3/7).
 A
webcast of the AHIP conference is available
online at kaisernetwork.org.
McClellan Interview
Separately, in an interview with the Associated Press, McClellan said
"at this point" he opposes proposals to extend the May 15 deadline for
enrolling in the drug benefit. "Many people tend to wait until close to
the deadline to make a decision," he said.
McClellan also reiterated
that there likely will be a decreased number of plans being offered. He
said the decrease will be "dictated by the market, [and] by what
consumers want," he but added, "Nobody should be looking in detail
through 40 different choices, so the question is, how can you quickly
help people go from 40 to the four or five most useful to them"
(Freking,
AP/Long Island Newsday, 3/8).
Savings Examined
In related news, the
San Francisco Chronicle on Wednesday examined the debate over
whether the drug benefit "is offering genuine discounts for medication."
Three studies released in the last week draw differing conclusions about
how much beneficiaries can save under the drug benefit, the Chronicle
reports.
One study, released by Rep. Pete Stark (D-Calif.) and other
Democrats in California's congressional delegation, found that prices
for 10 commonly prescribed drugs under the drug benefit are higher than
Canadian drug prices and prices at the retailer
Costco.
A second
study, by
Consumers Union, found that beneficiaries enrolled in the drug
benefit could save between $2,300 and $5,000 annually by switching from
brand-name drugs to generics or other lower-cost alternatives.
In
addition, a CMS study found that beneficiaries saved an average of 57%
compared with medication costs without drug coverage. Gail Shearer,
director of Consumer Reports Best Buy Drugs, which prepared the CU
study, said, "The one fairly consistent message Medicare beneficiaries
should be getting is that it probably makes sense for them to sign up
for a plan," although she added that the drug benefit is "far from
ideal" (Colliver, San Francisco Chronicle, 3/8).
"Reprinted with
permission from kaisernetwork.org You can view the entire
Kaiser Daily Health Policy Report, search the archives, and sign up
for email delivery at
www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser
Daily Health Policy Report is published for
kaisernetwork.org, a free service of The Henry J. Kaiser Family
Foundation. © 2006 Advisory Board Company and Kaiser Family Foundation.
All rights reserved.”
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