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Medicare Drug Program
Three Companies Dominate Medicare Drug Plans
The AARP brand is a license to print money, says
consultant
May 1, 2006 – As the first round of enrollment in
the Medicare drug program nears its deadline on May 15, it appears just
three of the insurance companies - out of 80 offering drug plans – are
big winners, with over half of the business. Not surprisingly, the most
successful has been UnitedHealth Group, which has a financial
arrangement with AARP for their endorsement. AARP, which says it is a
non-profit and advocate for citizens 50 and older, was a strong
supporter of the bill establishing the drug program.
KaiserNet.org also reports a significant Medicare
battle in the Senate, where the Republican chairman of the Senate
Finance Committee and the ranking Democrat on the committee, are calling
for two newly reappointed public trustees of Medicare and Social
Security, to resign their positions.
 Enrollment in Medicare Drug Benefit Concentrated
Among Few Companies, According to CMS
More than 80 companies are offering more than 1,400
Medicare prescription drug plans nationwide, though insurers
UnitedHealth Group,
Humana and
WellPoint account for 52% of
total drug benefit enrollment, according to data released on Friday by
the Bush administration, the
New York Times reports.
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Related Stories |
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Medicare Drug Plan Provider Offers Advice to Seniors
Facing May 15 Deadline
Analysis of 50,000 enrollees finds confusion,
misunderstanding & frustration was rampant
April 25, 2005 – The volume of information from
Medicare and drug plans has been overwhelming to senior citizens trying
to join the Medicare Part D prescription drug plan, but those who have
not joined should not be discouraged, says Connextions Health. They also
offer advice to those not enrolled as the May 15 deadline nears. The
company bases the information on experience in assisting over 50,000
senior citizens to enroll.
Read more...
Changes Made and Proposed to Improve Medicare Drug
Program
Republican enters bill in House to extend
enrollment deadline
April 28, 2006 – With millions of senior citizens
facing the deadline to enroll in a Medicare prescription drug plan by
May 15, a series of actions and proposals are aimed at making the
Medicare Part D program more attractive to seniors. Medicare has told
insurers they must keep drug lists (formularies) and copays the same for
a contract year. Yesterday, two Democrats on the Senate Finance
Committee proposed a bill to simplify the program, according to a report
by KaiserNet.org. Meanwhile, a House Republican filed a bill to extend
the enrollment deadline to the end of the year.
Read more...
Read more
on
Medicare Drug Program |
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About 13.9 million Medicare beneficiaries are
enrolled in prescription drug plans, and about 5.9 million beneficiaries
are enrolled in Medicare Advantage plans, the Times reports
(Pear, New York Times, 4/29).
UnitedHealth has a 27% market share, or 3.8
million beneficiaries, for PDPs, and a 20% market share, or 1.18 million
beneficiaries, for MA plans, according to enrollment data as recent as
April 18 (Lueck/Fuhrmans, Wall Street Journal, 4/29).
Humana has an 18% market share, or 2.44
million beneficiaries, in PDPs, and a 13% market share, or 792,500
beneficiaries, for MA plans (New York Times, 4/29).
The top 10 PDPs represent 80% of enrolled
beneficiaries in those types of plans, according to a preliminary
analysis by
Avalere Health, a health care
consulting firm (Carey,
CQ HealthBeat, 4/28).
For MA Plans,
Kaiser Permanente has the
second-highest enrollment, with a 14% market share accounting for
821,500 beneficiaries (New York Times, 4/29).
The top 10 MA plans represent 64% of enrollment for
those plans, according to Avalere (CQ HealthBeat, 4/28).
UnitedHealth has the highest enrollment in 29 states, while Humana has
the highest enrollment in 13 states.
BlueCross BlueShield plans have
the highest enrollment in six states.
Comments
Health consultant John Gorman, a former Medicare official, said
UnitedHealth and WellPoint "are winning on brand recognition," whereas
Humana and
MemberHealth "are winning on
price."
He added, "The AARP brand is a license to print
money. When seniors are confused and scared about making the wrong
choice, brand recognition and trust go a long, long way."
UnitedHealth is offering the only
AARP-endorsed drug plan (New
York Times, 4/29). Avalere President Dan Mendelson said
UnitedHealth's "offering is pretty mainstream, honestly, but they come
in with very solid name recognition both from AARP and from their local
managed care presence." Humana, which marketed low-cost plans with
premiums as low as $1.87 in some regions, "came in with a very
innovative set of offerings," Mendelson said (Freking,
AP/Arizona Daily Star,
4/29). Mendelson said the "high degree of concentration among a
relatively smaller number of plans ... means that these plans will
probably be able to leverage better prices over some period of time
[and] could help keep premiums low" (CQ HealthBeat, 4/28).
Tiers
The
Los
Angeles Times on Monday examined how some
beneficiaries "are still discovering new catches" in the drug benefit's
"complicated inner workings -- details that can defy the scrutiny of
even the most careful consumers." According to the Times, some
beneficiaries have enrolled in drug plans without realizing that their
medications might fall under a system of coverage levels called "tiers."
Plans typically divide prescription drug formularies into multiple
tiers, with beneficiaries paying fixed copayments for lower tiers and a
higher price -- such as a percentage of total drug cost -- for upper
tiers (Alonso-Zaldivar, Los Angeles Times, 5/1).
Grassley, Baucus Call for Resignation of
Medicare's Public Trustees
Senate Finance Committee Chair
Chuck Grassley (R-Iowa) and ranking minority member Max Baucus (D-Mont.)
on Friday urged Thomas Saving and John Palmer, the newly reappointed
public trustees of Medicare and Social Security, to resign their
positions and refrain from signing the annual report on the systems'
finances, CQ Today reports (Bicknell/Wayne, CQ Today,
4/28).
President Bush last month recess appointed Palmer,
a former dean of the Maxwell School of
Syracuse University, and Saving,
an economist at
Texas A&M University, to a term
that will end after the next Senate session in late 2007. The two have
served as public trustees on the board since 2000, and their four-year
term has expired.
However, under the Social Security Act, Saving and
Palmer were allowed to complete work on a fifth annual report on the
financial condition of Medicare and Social Security.
In November 2005, Bush nominated Palmer and Saving
for second four-year terms, but the Senate has not held confirmation
hearings on the nominations. Senate leaders of both parties have said
that they prefer to follow the precedent of no more than one term for
public trustees. The lack of confirmation of the nominations has
resulted in the delay of the Medicare and Social Security financial
reports for 2006 (Kaiser
Daily Health Policy Report, 4/20).
Letter
Grassley and Baucus in a letter to Bush, Saving and Palmer said, "Both
Dr. Palmer and Dr. Saving served admirably as public trustees during
their term. However, we believe the events surrounding this appointment
threaten the integrity of the nomination process and the credibility of
the position of public trustee."
They called on Bush to submit new nominees to fill
the positions and said they will introduce legislation next week to
limit all future public trustees to a single four-year term. Grassley
and Baucus also alleged that Saving and Palmer had served as "paid
consultants" to the Bush administration after their terms ended,
representing a potential conflict of interest.
Reps. Pete Stark (D-Calif.) and Sander Levin
(D-Mich.) also sent a letter to Bush on Friday saying Saving and Palmer
should not sign this year's financial report on Medicare and Social
Security, scheduled to be released Monday.
Response
Saving on Friday said that he will not resign and that he planned to
sign this year's report. Saving, who said he "doubt(s) very much" that
Palmer plans to resign, noted that the Senate Finance Committee "had
lots of time to inform us they didn't want to do this, and they didn't
do anything."
Saving also said he and Palmer were not paid by the
Bush administration for providing their input on this year's report,
saying, "We were indeed advisers. But I wouldn't have accepted any
payment from them -- we were at that point the nominees" (CQ Today,
4/28).
Significant Medicare Reform Unlikely
In related news, debate over reforms to Medicare and Social Security is
"certain to be revived" after the trustees release their report on
Monday, the
AP/Minneapolis Star Tribune
reports.
Last year's report estimated that the Medicare
trust fund would be depleted in 2020, and this year's report is not
expected to change that estimate significantly, according to analysts.
Federal Reserve Chair Ben
Bernanke last week urged lawmakers to enact changes to the programs
soon, saying they will consume about 16% of the total U.S. economy by
2040, double what they do currently.
Still, the prospects of "any ... major effort to
deal" with Medicare and Social Security do "not look promising given
that this is an election year, and Bush, facing the lowest approval
ratings of his presidency, has other problems to deal with, from the
Iraq war to soaring gasoline prices," the AP/Tribune reports.
David Wyss, chief economist at
Standard and Poor's, said, "As a
lame duck administration, it is very hard to get anything as major as
this through Congress." Meanwhile, some analysts say the next President
also could "shy away from tackling entitlement reform, given that any
solution will require making painful political choices," according to
the AP/Tribune (Crutsinger, AP/Minneapolis Star Tribune,
5/1).
"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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