Concerns Raised About Medicare Drug Coverage for Dual Eligibles

The federal government's plan to transfer dual eligibles from Medicaid drug coverage to the new Medicare prescription drug benefit has many problems, including an overreliance on voluntary efforts by state governments, drug plan sponsors and pharmacists, Sen. Max Baucus (D-Mont.) said Wednesday, CQ HealthBeat reports. Referring to preliminary findings from a Government Accountability Office report, Baucus said dual eligibles "are some of the most vulnerable among us," adding, "CMS asserts it has a 'fail-safe mechanism' to guarantee that dual eligibles do not lose access to their medicines. But after learning of GAO's findings, I am not convinced that CMS' transition plans are sufficient."

According to GAO's findings, which can still be changed, CMS' plan addresses "several potential problems with the transition," but it does "not ensure that dual-eligible beneficiaries can immediately obtain necessary drugs." The report adds that the plan to automatically enroll dual eligibles in a drug plan could "disrupt" beneficiaries "drug regimen and customary pharmacy usage."

In addition, GAO says that if CMS does not enroll a dual eligible in a Medicare drug plan, pharmacists will be responsible for contacting health plans to obtain coverage, relying on enrollment databases that might not be available at every pharmacy. If coverage is not arranged, "It is unlikely that dual eligible beneficiaries will be able to pay retail price for their drugs upfront," GAO concludes.

CMS spokesperson Peter Ashkenaz said that the GAO report is not yet complete, and GAO researchers "have assured [CMS] that the final version will reflect the steps that [the agency is] actually taking to ensure that all dual eligibles will continue to get the drugs that they need." He said the steps include notifying dual eligibles about the change and alerting them that they can change their plans if they wish. He added that CMS is "working on finalizing a system where any dual eligible that happened to be missed will be able to walk into a drug store and walk out with their drugs" (CQ HealthBeat, 11/17).

In related news, the AP/Arizona Republic on Friday examined the potential impact the new Medicare drug benefit will have on pharmaceutical companies. According to financial analysts, drug companies likely will see an increase in sales and profits during the first two years of the benefit, as health insurers competing for members offer generous coverage. Richard Evans, an analyst at Sanford Bernstein, said pharmaceutical companies could see a 2% to 3% increase in earnings in 2006 and 2007. However, some analysts say health plans over the long term will reduce drug coverage as competition lessens. Evans predicted a resulting 3% to 13% decrease in drug companies earnings in 2008 and 2009. Pharmaceutical companies also will face increasing pressure to prove that their products are more cost-effective than competing medications. The federal government "has enormous purchasing power," Anthony Hooper, president of the U.S. pharmaceutical division of Bristol-Myers Squibb, said, adding, "If you don't get your product on a government formulary, your product doesn't have a future. Now, not only does your product have to work, but the government is going to demand information that differentiates it." However, some pharmaceutical companies say managed care has resulted in lower drug prices and increased competition among products, so the effect of the new benefit will be limited. In addition, some analysts say the effect of the benefit will vary by company. Companies with many products in crowded markets, such as Merck and Pfizer, could face more problems than companies with more specialized medications, including Bristol-Myers and Eli Lilly. According to the AP/Republic, Pfizer and Merck "disputed that notion," and Pfizer in October said it is well positioned for the new Medicare benefit after reorganizing its sales force (Agovino, AP/Arizona Republic, 11/18).

A number of newspapers recently published articles on the Medicare prescription drug benefit. Headlines appear below.

• "Medicare's New Maze" (Potempa, Anchorage Daily News, 11/16).
  
  
• "One Million Apply for Medicare Drug Plan, UnitedHealth Says" (AP/Arizona Republic, 11/18).
  
  
• "Seniors Welcome Assistance Navigating Medicare Plan" (Bangor Daily News, 11/17).
  
  
• "Medicare Part D Choices" (Smart, Bangor Daily News, 11/17).
  
  
• "Medicare? Confusing? Nah." (Ivry, Bergen Record, 11/16).
  
  
• "Federal Government Offers Help for Seniors Bewildered by Medicare Changes" (Anderson, Charleston Daily Mail, 11/15).
  
  
• "Seniors' Choices To Begin Today: New Medicare Drug Benefit Goes Into Effect on Jan. 1" (Maze, Charleston Post and Courier, 11/15).
  
  
• "Recipients Begin Enrollment in Drug Benefit Plan" (Charlotte Observer, 11/16).
  
  
• "Medicare Drug Plan Alternatives Can Offer Benefit of Lower Costs" (Japsen, Chicago Tribune, 11/16).
  
  
• "Vexing Rollout of Drug Plan; Seniors Face a Steep Learning Curve With Medicare Program" (Marks, Christian Science Monitor, 11/16).
  
  
• "Drug Plan's First Day Puzzling: Some Worry Seniors Won't Sign Up Because of Confusion" (O'Farrell, Cincinnati Enquirer, 11/16).
  
  
• "Medicare Recipients Begin Task of Prescription Plan Enrollment" (Stafford, Daily Oklahoman, 11/15).
  
  
• "Signups Begin for Medicare Drug Plan: Program for Seniors To Cut Costs, but Plan Can Be Confusing" (Cummings, Dayton Daily News, 11/15).
  
  
• "Mixed Reaction to Drug Plan: Some Perplexed; Others Say They Have Better Coverage" (Cummings, Dayton Daily News, 11/16).
  
  
• "Seniors Have New Choices in Medicare Drug Benefits" (Geggis, Daytona Beach News-Journal, 11/15).
  
  
• "Medicare Drug Benefits Open Up: Enrollment Programs Guide People Through the Wide Array of Available Options" (Sagario/Leys, Des Moines Register, 11/16).
  
  
• "Seniors Jam Day One of Drug Plan Signup" (Askari, Detroit Free Press, 11/16).
  
  
• "Picking the Right Drug Plan Requires Research: But Some Options Confuse Senior Citizens" (Tompor, Detroit Free Press, 11/16).
  
  
• "Hard Choices for Couples: Husbands, Wives May Have To Drop Parts of Coverage Under New Rules" (Tompor, Detroit Free Press, 11/17).
  
  
• "Medicare Drug Rollout Leaves Seniors Frazzled" (Terlep, Detroit News, 11/16).
  
  
• "Complex Menu for Seniors: Medicare Drug Plan Is a Lot To Absorb" (Condon, Hartford Courant, 11/17).
  
  
• "Medicare Drug Plan Puzzling to Many" (Gannett/Jackson Clarion-Ledger, 11/15).
  
  
• "Prescription for Confusion: Enrollment Starts Today With Array of Options" (Howington, Louisville Courier-Journal, 11/15).
  
  
• "Curing the Medicare Headache" (Hatcher, Miami Herald, 11/16).
  
  
• "Nationwide Medicare Rx Program Enrollment Begins Today" (Costa-Landers, Nevada Appeal, 11/15).
  
  
• "Seniors Puzzle Over New Drug Plan" (Cox, Orlando Sentinel, 11/17).
  
  
• "Medicare Queries Deluge Doctors: Many Seniors Want a Drug Plan Picked by Their Physicians, but Rules Bar Such Action" (Shelton, Orlando Sentinel, 11/18).
  
  
• "Medicare Drug Plan: Simple Concept, Complicated Execution" (Brown, Peoria Journal Star, 11/17).
  
  
• "New Drug Plan Opens to a Torrent of Callers" (Uhlman, Philadelphia Inquirer, 11/16).
  
  
• "Enrollment Opens for Drug Plan" (Huang, Portland Press Herald, 11/15).
  
  
• "Medicare Answers, Please: Counselors Try To Allay the Concern and Confusion of People Eligible for a New Federal Program To Provide Affordable Prescription Drug Coverage" (Levitz, Providence Journal, 11/16).
  
  
• "Savvy Consumer: Tips To Enroll in Medicare Drug Plan" (Sorkin, St. Louis Post-Dispatch, 11/18).
  
  
• "No Magic Pill for Seniors Available" (Nohlgren, St. Petersburg Times, 11/17).
  
  
• "Head-Scratching Over Benefit Starts" (Davis, San Antonio Express-News, 11/16).
  
  
• "America's Senior Citizens Are Under Pressure To Choose a Medicare Prescription Drug Plan That Few Can Decipher" (Ackerman, San Jose Mercury News, 11/16).
  
  
• "Sessions Ease Medicare Confusion: But Many Might Still Bypass Aid With Drug Costs" (Walker, Sioux Falls Argus Leader, 11/17).
  
  
• "Medicare Drug Plan Faces Enrollment Challenge: Benefit Needs Broad Appeal" (Appleby, USA Today, 11/18).
  
  
• "On Medicare? 67 New Options" (Neibauer, Washington Examiner, 11/15).
  
  
• "The Poor May Be Left Out in Medicare Drug Transition" (Lee, Washington Post, 11/18).
  
  
• "Benefits Signup a Headache to Seniors: Too Many Choices and Not Enough Information Frustrate Medicare Recipients Trying To Sign Up Tuesday for Prescription Drug Plans" (Atwater, Wichita Eagle, 11/17).
  
  
• "Be Careful Where You Get Medicare Tips: Agents at Drugstores May Not Have Your Best Interests in Mind" (Ratnayake, Wilmington News Journal, 11/15).