Drug Benefit Increases Earnings for Insurers, Pharmaceutical Firms
Two newspapers on Friday featured stories on the Medicare drug benefit. Summaries appear below.
San Francisco Chronicle: The Medicare drug benefit has "been a boon for pharmaceutical companies and has swelled the membership ranks of health insurers. But it's uncertain whether this success will last," the Chronicle reports. GlaxoSmithKline's second quarter net income this year increased by 14%, while Merck, Schering Plough, Wyeth, Roche and Pfizer have all had increased sales because of the drug benefit. The finances of health insurers UnitedHealth Group, Humana and WellPoint also were boosted by the new plan. According to the Chronicle, "[e]xperts caution that the Medicare effect could fade," particularly if Congress institutes price controls on drug manufacturers (Colliver, San Francisco Chronicle, 8/4).
- St. Paul Pioneer Press: Some beneficiaries are receiving bills for their drug plan premiums, even though they asked for the premiums to be deducted from their Social Security checks, the Pioneer Press reports. Blue Cross and Blue Shield of Minnesota estimates that about 90,000 people across seven Midwest states could be affected by the billing error. CMS and Social Security officials during a teleconference Thursday said they are working to correct the problem and have told health insurers to maintain coverage for those people with overdue premium payments. Humana has offered to let 35,000 people switch from the automatic deduction plan to monthly billing, and Blue Cross is contacting those individuals with overdue premium payments and offering them six months to catch up, company spokesperson Monika Strom said. Medicare spokesperson Peter Ashkenaz said that most beneficiaries are experiencing no problems with the drug benefit, adding that people with automatic deduction issues will not be disenrolled (Olson, St. Paul Pioneer Press, 8/4).