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Medicare Drug Program News
Senior Citizens to See Medicare Drug Plans Cost
About Same in 2007
CMS credits smart plan choices and competitive
bidding by plans
August 16, 2006 – Senior citizens can expect their
Medicare drug plan to cost about the same in 2007 as it did this year -
about $24 per month, or less, on average, according to an announcement
yesterday from the Centers for Medicare and Medicaid Services. CMS says
the "lower than expected" cost for both years is due to strong
competitive bidding by the health plans and smart plan choices by
beneficiaries.
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Website Aims to Help
Senior Citizens Stay Afloat in Medicare Drug Program's Doughnut Hole
'Beat the Doughnut Hole' effort by Center
for Medicine in the Public Interest
August 9, 2006 - There is a new, free online service
to help senior citizens save money on prescription drugs. DestinationRx
and the Center for Medicine in the Public Interest have launched "Beat
the Doughnut Hole," a two-month Coverage Gap Awareness Campaign to
educate seniors about managing the Medicare Part D "doughnut hole."
Read more...
Hole in Medicare Drug Coverage has Seniors Seeing
Red; Companies Green
Community pharmacists say revenue booming
at top providers of Part D Plans
 August 8, 2006 – Pharmacy Benefit Managers are
reporting double digit profits and forecasting even greener returns,
while seniors are hitting the "doughnut hole" in Medicare Part D coverage
and paying the entire cost for prescriptions, says the Association of
Community Pharmacists Congressional Network. The group says it does not
understand how members of Congress think it is sound policy for private PBMs to make such massive profits on a government run program at both
patients' and taxpayers' expense.
Read more...
Confusion Surrounds Doughnut Hole in Medicare Drug
Program
Three major newspapers find lots of confusion among
seniors
July 31, 2006 – Increasing numbers of senior
citizens are falling into the infamous "doughnut hole" in the Medicare
drug program, where they must pay the full cost of their drugs. Three
major newspapers have recently focused on the confusion that surrounds
this hole in the Part D program, according to KaiserNet.org.
Read
more...
Participants Satisfied with Medicare Drug Program
but 20% Had Major Problem
Survey shows drug benefit 'not the catastrophe many
critics had predicted'
July 28, 2006 - More than eight in 10 seniors who
are enrolled in Medicare drug plans are satisfied with their plans,
while nearly two in 10 who have used their plans report experiencing a
major problem with them, according to a tracking survey released on
Thursday by the
Kaiser Family
Foundation, the
AP/San Francisco
Chronicle reports.
Read
more...
Medicare Drug Program: Windfall in Dual Eligibles
for Pharmaceuticals
Senate bill
will eliminate monthly premiums for
those in doughnut hole
July 18, 2006 – The pharmaceutical industry has
found a windfall in the transfer of drug coverage for the dual eligibles
(qualified for Medicare and Medicaid) from the state Medicaid programs
to the Medicare
prescription drug program, while in the Senate a bill has been
offered to eliminate monthly premiums for senior citizens who fall into
the "doughnut hole" in the drug program.
Read
more...
Health Care Leaders Say Medicare Part D is Good, But
Needs Changes
They say reduce complexity, change benefit
structure, improve low-income benefit
July 14, 2006 - Two-thirds of respondents to the
latest Commonwealth Fund Health Care Opinion Leaders Survey agree
(strongly agree or agree) that enactment of Part D was on balance good
for beneficiaries, but majorities also support basic changes to the law.
Read
more...
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Medicare
or
Medicare Drug Program |
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As a result of these two factors, the national
benchmark that determines Medicare’s subsidy toward the cost of drug
coverage will decline in 2007, according to CMS.
(Below this news report see
statement by CMS.)
“Competition and smart choices have been the two
most important factors in the success of the Medicare drug benefit,
which is serving beneficiaries at a far lower cost than expected,” said
CMS Administrator Mark McClellan, M.D., Ph.D.
“Bids are down because of strong competition and if
beneficiaries once again choose less costly plans, we will actually see
premiums go down on average in 2007. We want to make sure that we
continue this stable, effective approach to providing low-cost
coverage.”
While competitive bids for both stand-alone
prescription drug plans and Medicare Advantage (MA) prescription drug
plans have been lower than independent analysts projected last year,
bids are notably lower for Medicare Advantage plans.
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Medicare Part B Premiums to Reach Nearly $100 a
Month in 2007
Medicare looks at rising costs, which project
premium jump over 11%
July 12, 2006 – The hidden message in a fact sheet
issued by the Centers for Medicare and Medicaid Services yesterday is
that Medicare Part B premiums for senior citizens will jump to almost
$100 a month next year. The headline on the CMS fact sheet started with,
"Medicaid Spending Projections Down Again." But the big news is rates
are getting ready to take a double digit jump of over 11 percent. (Read
fact sheet below news story.)
Read more...
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Medicare News...
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The average Medicare Advantage prescription drug
plan bid is 18 percent lower in 2007 than 2006 and Medicare Advantage
drug premiums are expected to be significantly lower in 2007 for
beneficiaries. The lower bids reflect the effects of aggressive
competition as well as lowered costs resulting from better care
coordination and drug benefit management techniques.
After the drug benefit bidding process for 2006,
the average premium offered by plans was around $32. But because
beneficiaries overwhelmingly chose Part D plans with lower-cost options,
the actual average premium was $24 in the first year of the program.
Based on the strong competitive bids for 2007 and
by transitioning to the weighted average bid, or benchmark, average
premiums will again be around $24 for beneficiaries and the cost of drug
coverage to taxpayers will be lower. In addition, the vast majority of
beneficiaries will have access to Medicare drug plans that cost them the
same or less than their coverage in 2006.
“The power of Medicare beneficiaries making
informed choices has already reduced the cost of the drug benefit to
beneficiaries by 25 percent on average in 2006, and as a result of
continuing strong competition, more savings are on the way,” Dr.
McClellan added. “This situation has never happened before: overall
costs of drug coverage for beneficiaries and the government are being
held down. To build on this success, we will continue to work with
beneficiaries through our local grassroots efforts, which include
counseling to make informed choices on plans that meet their needs in
2007.”
To enable seniors and people with a
disability to share in the substantial savings resulting from their
informed choices in 2006, CMS is transitioning from a “uniform weighted”
benchmark to a “weighted average” benchmark based on beneficiary
enrollment in 2006. This is similar to transition approaches that CMS
commonly uses in implementing other payment systems. This will ensure
that beneficiaries who have made choices that lowered the cost of the
drug benefit will continue to have access to low premiums in 2007.
“With this strong competition between plans, if
seniors once again choose less costly plans, we will actually see
premiums go down on average in 2007. We are taking steps to continue
this effective approach to providing low-cost coverage and to enable
seniors to share in some of the substantial savings that their choices
have created for Medicare,” said Dr. McClellan.
Low-income subsidy
For beneficiaries who qualify for the extra help
(Low Income Subsidy), the 2007 bids complement the transition
demonstration announced in June. Beneficiaries will have greater
stability in their plan options in 2007.
Because of competition and the transition approach
announced for the low-income subsidy benchmark, 7 out of 8 beneficiaries
receiving the extra help can stay in their current plan with no premium
in 2007, and they will have a significant number of choices if they want
to switch. CMS plans to work with these prescription drug plans and
will take all necessary measures to ensure that all beneficiaries who
need to switch in order to remain in a zero-premium plan are
successfully reassigned to plans for 2007.
Note: The benchmark notice can be found at
www.cms.hhs.gov/MedicareAdvtgSpecRateStats/Downloads/ptcd2007_20060815.pdf
CMS Outlines Actions
that are Keeping Drug Plan Costs Down
Says further actions being taken to improve
benefit choices
Statement from CMS
About 38 million people with Medicare, 90 percent
of all beneficiaries, are now receiving comprehensive prescription drug
coverage through Medicare Part D, employer-sponsored retiree health
plans or other creditable coverage.
A surge in enrollment took place in the closing
weeks of the enrollment period, with more than 2 million beneficiaries
signing up between May 1 and the May 15, 2006 deadline. The benefit
created an enormous challenge and a great opportunity.
The promise is being fulfilled with more than 2
million Part D prescriptions being filled every day. As a further sign
of success, the expected cost of the average monthly plan premiums in
2007 is nearly 40 percent lower than originally estimated.
Achieving Strong Competition and Effective
Beneficiary Choices
CMS took a series of steps to promote strong
competition and to assist beneficiaries with choosing their coverage to
save even more money.
Making Competition Work for Seniors and People
with a Disability.
Using a process similar to the Office of Personnel
Management oversight of the Federal Employees Health Benefit Program,
CMS established a predictable process for plans to submit competitive
bids and to negotiate the details of their benefit packages. In
addition, CMS held numerous conferences and industry training forums to
assist its partners in using the bid submission process. CMS has also
enforced the plan requirements with compliance actions and sanctions
where necessary, including over 650 warning letters, corrective action
plans, and other enforcement actions. For 2007, CMS required plans to
justify their benefit options based on coverage designs that were
meaningfully different and that were clearly preferred by many
beneficiaries in 2006. Generally, plans were allowed to offer only three
options, including one option that provided coverage in the “donut
hole.”
Improved Options to Help Choose a Plan.
As a part of our continuing effort to refine the
Medicare Prescription Drug Plan Finder on
www.medicare.gov, enhancements will be made in late August and in
October of 2006 that will improve navigation and usability of the tool
as well as provide users with clearer monthly prescription drug plan
cost share information. The enhancements include:
● Total Monthly Cost Estimator functionality will
provide a graph of the month-by-month cost share for a selected plan. In
this way, users will be able to view how their cost share may change on
a monthly basis as reflected by the coverage levels of the drug benefit.
● This information will reflect the beneficiary’s
low income subsidy status as well as their drug list and pharmacy
selection.
● Decrease in the number of steps leading to plan
comparisons and results.
● Changes in the layout and design of the tool
based on usability testing.
In addition, the Medicare Personal Plan Finder
(MPPF), which assists beneficiaries in selecting a Medicare Advantage
plan, will be redesigned. Based on a lessons-learned approach, CMS has
been able to incorporate many attributes of the Medicare Prescription
Drug Plan Finder into the redesign of the MPPF. This includes the
ability to personalize searches, greater integration with the Medicare
Prescription Drug Plan Finder to access prescription drug plan
information, and changes to the layout and design to improve usability.
Many Ways to Enroll.
In the past year, CMS established flexible
enrollment options for beneficiaries who chose to enroll in a Medicare
prescription drug plan. Specifically, CMS now allows plans to accept
enrollment requests over the telephone or through their Internet Web
sites, in addition to paper enrollment forms. CMS has also offered
beneficiaries the opportunity to submit enrollment requests via
1-800-MEDICARE and through the Medicare.gov Web site, which CMS then
forwards to the plan for processing. Over 3.8 million enrollments have
been received via
www.Medicare.gov since November 15, 2005. CMS will continue to
support all of these enrollment approaches in 2007
Protecting Beneficiaries.
CMS also streamlined the exceptions and appeals
process that allows Medicare beneficiaries access to medically necessary
drugs, by requiring timely processing and tracking any failures to
perform. CMS implemented strict requirements for processing enrollment
and copay data in a timely manner for beneficiaries eligible for the
low-income subsidy, and for providing pharmacies with information to
enable them to bill the beneficiary’s plan properly even if the
beneficiary does not have a plan benefit card.
Finding and Fixing Problems.
Nationally, during the month of June 2006, CMS
received about 2.3 complaints per 1,000 Medicare beneficiaries enrolled
in prescription drug plans. Complaint rates averaged about 2.6 per 1,000
beneficiaries for stand-alone prescription drug plans and abut 1.4 per
1,000 beneficiaries for Medicare Advantage drug plans. To ensure that
complaint rates continue to remain very low, CMS is using the data to
address plans’ weaknesses, to continue to find and fix problems, and to
drive for excellence in the services being provided to enrollees.
Better Benefits
● Almost 90 percent of beneficiaries have
enrolled in coverage other than the standard benefit. Most
beneficiaries have chosen zero-deductible plans that help with drug
costs starting with the first prescription, and most have chosen plans
that have fixed predictable co-payments for most prescriptions. Almost
all beneficiaries had the option of getting coverage that at least
partially filled in the coverage gap, or “donut hole,” and one in six
beneficiaries opted for this more comprehensive coverage.
● In July, a Kaiser Family Foundation survey
showed that millions of seniors and people with disabilities are
satisfied with their coverage (over 80 percent), and would choose to
stay in their plan by a margin of more than 7 to 1.
Much Lower Costs
● Because strong competition is continuing in
2007, the Medicare drug benefit costs are coming down further. The
“bids” by the prescription drug plans are 10 percent lower, on average,
in 2007 than 2006.
● The average premium in 2006 for the basic
Medicare drug benefit is about $24. Last year, premiums were estimated
to be about $37 per month on average – a difference of 35 percent.
Because of Part D, seniors are saving an average of over $1,100 a year.
● The lower premium is the result of much
slower-than-expected prescription drug cost growth in 2004 and 2005,
strong competition among Medicare drug plans and beneficiaries’ tendency
to choose low-cost plans. More than 75 percent of beneficiaries chose
plans that cost less than the average, and most choosing higher-cost
plans did so because of extra benefits offered.
● Average Medicare Part D premiums are projected
to increase by only 0.1 percent in 2007, based on current enrollment.
These premiums are 40 percent lower than the roughly $40 premium
predicted last year for 2007. For specific Part D plans, some premiums
will be higher than in 2006 and others will be lower. The vast majority
of beneficiaries will have access to both stand-alone and Medicare
Advantage prescription drug plans that cost less than their current
plan. If beneficiaries choose lower-cost plans again in 2007, like most
did in 2006, average premiums paid by beneficiaries will decline
compared to 2006.
● Because the cost of drug coverage is lower in
2007 than had been predicted, the projected costs of Medicare Part D are
likely to decline again.
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