Fewer Medicare Drug Plans Offer ‘Doughnut Hole’ Coverage in 2008
Few Medicare plans in 2008 will offer brand-name prescription drug coverage in the so-called "doughnut hole" gap because of cost, meaning that Medicare beneficiaries will have fewer options when choosing a plan during the open enrollment period that ends Dec. 31, the San Francisco Chronicle reports.
The doughnut hole gap in 2008 begins when drug costs for an individual and his or her insurer reach $2,510 and ends when spending reaches $5,726. Only one plan, located in Florida, will provide coverage for brand-name prescription drugs in the gap in 2008.
According to the Chronicle, the lack of brand-name coverage in the coverage gap "is a big change for beneficiaries who opted to spend more for higher-level coverage that offered them some protection when they reached" the doughnut hole.
Brand-name coverage within the gap is available to some individuals through Medicare Advantage plans, but "that means giving up traditional Medicare in exchange for a health plan managed by a private company," according to the Chronicle.
Despite the nationwide decline in the number of plans offering coverage for brand-name drugs in the doughnut hole, California beneficiaries will have more choices of plans that include benefits for generic medications in the doughnut hole. Fifteen plans will offer such coverage in 2008 in California, up from 13 in 2007.
For example, Humana stopped offering gap coverage in California in 2006 but has reworked its benefits for drug coverage within the doughnut hole. In 2008, it will offer "Enhanced" and "Complete" Medicare prescription drug plans that provide coverage for generic treatments and no deductibles. Monthly premiums for "Enhanced" plans will be $26.40, while "Complete" plans will be available for $102.70 monthly and feature lower copays.
Debbie Smith, regional president for senior products in the western region for Humana, said that the company stopped offering brand-name coverage because it is cost-prohibitive. "It is about balancing a premium and the benefit for the member," she said (Colliver, San Francisco Chronicle, 12/9).
In related news, the Wall Street Journal reports that regulators during the open enrollment period are "warning that an increasing number of unscrupulous insurance agents ... view it as open season for preying on older adults." Illegal activities of insurance salespeople include "violating federal regulations against door-to-door selling of coverage and the forging of signatures," according to the Journal. Mary Jo Hudson, director of the Ohio Department of Insurance, said that the complexity of Medicare and the vulnerability of the elderly to high-pressure sales tactics "is very bad news" for beneficiaries.
Critics say that the unscrupulous sales practices are driven by "commission structures that favor promoting one plan over another no matter what the needs of an applicant" and also note that insurance companies "hold contests to push their products that promise salespeople prizes like trips to Las Vegas," according to the Journal (Lauricella, Wall Street Journal, 12/9).