CMS Estimate of Drug Benefit Premiums Disputed
A CMS estimate that Medicare prescription drug plans in 2007 will have average monthly premiums of $24 -- the same as this year -- appear "to be wrong," Rep. Henry Waxman (D-Calif.), ranking member of the House Government Reform Committee, said on Tuesday in a letter to HHS Secretary Mike Leavitt, the Washington Post reports (Lee, Washington Post, 10/13). CMS on Sept. 29 in a statement said that Medicare beneficiaries will have average monthly premiums of $24 in 2007 "if they stay in their current plan, about the same as in 2006" (Appleby, USA Today, 10/13).
However, Waxman said an analysis conducted by his staff found that average monthly premiums in 2007 will increase about 13.2%, to $29 (Carey, CQ HealthBeat, 10/12). According to the Post, the "discrepancy arises from the different ways that the two sides calculated average premiums."
The CMS estimate includes monthly premiums for both stand-alone Medicare prescription drug plans and Medicare Advantage plans, which offer a range of services and do not have separate premiums for prescription drug coverage (Washington Post, 10/13). About seven million Medicare beneficiaries are enrolled in Medicare Advantage plans (USA Today, 10/13).
The Waxman analysis includes only stand-alone Medicare prescription drug plans, which account for about 16 million enrollees in the prescription drug benefit.
The letter from Waxman states that the CMS estimate conceals "significant increases in premiums for Medicare drug plans" (Washington Post, 10/13). According to the Waxman analysis, average monthly premiums for Medicare prescription drug plans that have the same deductible and same coverage levels from 2006 in 2007 will increase by 11.1%.
Average monthly premiums for the lowest-priced Medicare prescription drug plans will increase by more than 44%, to $13.58 from $9.46, according to the analysis (Carey, CQ HealthBeat, 10/12). The analysis also found that average monthly premiums will increase for 77% of Medicare beneficiaries who select the same prescription plan in 2007 that they did this year (USA Today, 10/13).
"The release of erroneous information about the cost of premiums -- whether deliberate or not -- is a disservice to millions of seniors and a discredit to the department," the letter states (Washington Post, 10/13). The letter adds, "Combining the actual premiums for drug plans with these estimates in managed care plans is mixing 'apples' and 'oranges' with the average price of 'fruit.' It is not merely confusing arithmetic, it is deceptive advertising" (Carey, CQ HealthBeat, 10/12).
Waxman in a statement said, "The only way the Administration's numbers can possibly add up is by including artificial estimates of the costs of drug coverage in Medicare managed care plans. Most seniors won't abandon traditional Medicare just to keep the costs of their drug coverage from going up, nor should they have to."
CMS Administrator Mark McClellan in a statement said, "The congressman's analysis is inaccurate and misleading because it is selective, measuring just one of the plan option beneficiaries can use to get their prescription drugs" (Washington Post, 10/13). McClellan added that 83% of Medicare beneficiaries currently enrolled in the prescription drug benefit will have access to at least one prescription drug plan with lower premiums in 2007 (Carey, CQ HealthBeat, 10/12).
Tricia Neuman, a Kaiser Family Foundation vice president and director of the
Dan Mendelson, president of Avalere Health, said, "These are commercial plans that change from year to year based on their experience, and the only way for seniors to navigate the marketplace effectively is to constantly reassess their options" (Alonso-Zaldivar, Los Angeles Times, 10/13).
On Friday, McClellan plans to announce improvements to the Medicare Drug Plan Finder on the Medicare Web site (Washington Post, 10/13).
In related news, officials for America's Health Insurance Plans, the National Association of Chain Drug Stores and the National Community Pharmacists Association briefed congressional staff members on a new 50-page guidebook and interactive Web site designed to help Medicare beneficiaries select prescription drug plans in 2007.
The guidebook and Web site seek to help Medicare beneficiaries select prescription drug plans based on a number of priorities, such as coverage gaps and formularies, "rather than relying solely on premium and copayment costs," according to CQ HealthBeat (Crowley, CQ HealthBeat, 10/12).
House members and senators can request copies of the guidebook, which appears online, to distribute to constituents. State Health Insurance Program offices, governor offices and chain and local pharmacies also can request copies of the guidebook. The Web site will launch on Nov. 1 (CongressDaily, 10/12).
The Boston Globe on Friday examined how the Medicare prescription drug benefit has become an issue in some congressional races. For example, the "closely watched" race between incumbent Rep. Clay Shaw (R-Fla.) and state Sen. Ron Klein (D) in the Florida 22nd district is "attracting an added layer of attention" because of a focus on the so-called "doughnut hole" coverage gap in the Medicare prescription drug benefit, the Globe reports.
According to the Globe, "Democrats remain confident that doughnut hole angst can mobilize voters." However, Republicans believe that "most seniors are happy with the benefit because they are spending less on prescription drugs," the Globe reports (Henderson, Boston Globe, 10/13).
KPBS' "KPBS News" on Thursday reported on the estimate that more than 250,000 low-income Medicare beneficiaries will have to transfer to other prescription drug plans in 2007 (Goldberg, "KPBS News," KPBS, 10/12).
According to the National Senior Citizens Law Center, four of the 10 prescription drug plans currently available to low-income Medicare beneficiaries in California will not be available next year.
Medicare pays the monthly premium for people dually eligible for Medicare and Medi-Cal, California's Medicaid program.
Companies that offer health plans for these beneficiaries must renew their contracts with the federal government annually, or they can opt to withdraw the plan. Companies also are permitted to increase premiums, but if premiums increase above a certain level, the federal government will not subsidize it for dual eligibles (California Healthline, 10/12).
The KPBS segment includes comments from Jeanne Finberg, directing attorney at NSCLC ("KPBS News," KPBS, 10/12). The complete transcript is available online. The complete segment is available online in Windows Media.
"Democrats are still on the warpath against" the Medicare prescription drug benefit, despite "abundant evidence of its success," Roll Call Executive Editor Morton Kondracke writes in an opinion piece, adding that Democrats "threaten to undermine future success if they take control of Congress." He writes, "If Democrats do take over either the House or Senate, or both, they should strive to improve on the Medicare reform record set by McClellan and the Bush administration -- not undermine it with top-heavy government regulation."
According to Kondracke, "Congress should see to it that the reform agenda advances and that doctors, health plans, drug companies and hospitals have incentives to compete on the basis of their ability to keep people healthy -- not just treat sick people at government-set prices." He concludes, "If they do take control, Democrats need to reform not only health care, but their own thinking" (Kondracke, Roll Call, 10/13).