Fewer Medicare Plans Expected in 2007
Market forces have helped lower prescription drug prices and will reduce the number of plans offered under the Medicare prescription drug benefit next year, HHS Secretary Mike Leavitt told insurance executives on Tuesday at a meeting sponsored by America's Health Insurance Plans, CQ HealthBeat reports.
"The market has very clearly driven the prices down," Leavitt said, adding, "We believe that the market will also simplify this program."
Calling the initial version of the drug benefit "Medicare Part D 1.0," Leavitt told executives that "Part D 2.0" would reflect the "need for simplification and standardization" in the program.
CMS Administrator Mark McClellan said that "some plans are definitely proving to be more popular than others" and that there is "some consolidation." He added, "I suspect we are going to see some more of that, particularly from plans that haven't generated a large level of enrollment."
However, CMS might "not be leaving it entirely up to market forces to reduce plan offerings," CQ HealthBeat reports (Reichard, CQ HealthBeat, 3/7). In late February, CMS sent a memo to insurers requesting feedback on a proposal to limit insurers with Medicare drug plans to offering one "basic" benefit plan and one "enhanced" benefit plan in each region.
For this year's coverage, insurers were allowed to sponsor up to three plans per region (California Healthline, 2/27).
In the meeting Tuesday, Leavitt cited elimination of "separate applications ... for every plan" as an example of the program's future simplification.
Leavitt said that drug plans' customer service is improving but has "a ways to go yet." He said he is concerned about the number of beneficiaries who have yet to receive a plan number. He added that "plans need to do a better job of responding to inquires by beneficiaries and pharmacists" and that plans need to pay pharmacists faster, particularly those in rural areas.
Leavitt said, "I am also concerned that there are too many people who are getting answering machines during business hours asking them to call back at a different time."
Leavitt and McClellan said CMS is increasing monitoring of plans' call centers and their speed at processing enrollment applications.
CMS is designing performance measures to track those functions and will release the data to the public, McClellan said.
McClellan said he expects participation in Medicare Advantage plans to be "very strong" in 2007, with payment rates "stable." McClellan also encouraged insurers to offer medical savings accounts, suggesting that CMS might consider changes to some features of MSAs that have been unpopular with insurers.
Rep. Henry Waxman (D-Calif.), who also spoke at the meeting, said AHIP members should avoid HSAs because they would "fracture" the risk pool for the Medicare population.
"You are part of the health care system, and if you care about it, you need to oppose these tax policies," Waxman said, adding, "You have incredible connections with this administration. What are you going to do with it?" (CQ HealthBeat, 3/7).
In an interview with the Associated Press, McClellan said "at this point" he opposes proposals to extend the May 15 deadline for enrolling in the drug benefit. "Many people tend to wait until close to the deadline to make a decision," he said.
McClellan also reiterated that there likely will be a decreased number of plans being offered. He said the decrease will be "dictated by the market, [and] by what consumers want," but he added, "Nobody should be looking in detail through 40 different choices, so the question is, how can you quickly help people go from 40 to the four or five most useful to them" (Freking, AP/Long Island Newsday, 3/8).
In related news, the San Francisco Chronicle on Wednesday examined the debate over whether the drug benefit "is offering genuine discounts for medication" (Colliver, San Francisco Chronicle, 3/8).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.