Medicare Beneficiaries Face Potential Changes in Drug Benefit Market
Some experts believe that the number of Medicare prescription drug plans being offered likely will decline in future years, The Hill: The Hill reports. According to The Hill, experts supporting this theory reason that because a "handful of firms own the lion's share of the Part D market, other companies might be compelled to leave it behind" (Young, The Hill, 10/3)
The Bush administration on Friday said that private health insurers that market Medicare prescription drug plans in 2007 will offer more products, several of which will have lower premiums and more of which will provide coverage during the so-called "doughnut hole."
Seventeen health insurers will market nationwide Medicare prescription drug plans in 2007, compared with nine in 2006. In 2007, all states except Alaska and Hawaii will have more than 50 Medicare prescription drug plans available, and 23 states will have at least 55 plans available.
Most states in 2006 had about 40 Medicare prescription drug plans available (California Healthline, 10/2).
Robert Reischauer, president of the Urban Institute, said that in future years there is "going to be a handful of companies offering" national plans, rather than many companies offering regional plans.
According to The Hill, this trend might occur if regional insurers "that are unable to make gains against the big players ... choose to leave the market."
Mohit Ghose, a spokesperson for America's Health Insurance Plans, said, "It's a little too early to talk about plans being in or out of the program." Ghose said that market penetration and enrollment "does make a difference" but added that plans are committed to staying in the program.
Marilyn Moon, director of the health program at the American Institutes for Research, said, "The real proof in the pudding will be next year," when special protections to help guard against insurance company loses in the first two years of the drug benefit will no longer be in place (The Hill, 10/3).
Although Medicare beneficiaries who are satisfied with their current plans do not have to take any action if they do not wish to switch plans, "the drug benefit landscape is changing enough that even enrollees who are content may want to review how their plan stacks up against new offerings," the Wall Street Journal reports.
One change is the increase in plans that are offering coverage during the doughnut hole, the provision of the drug benefit under which beneficiaries are responsible for 100% of prescription drug costs between $2,250 and $5,100. Fifteen percent of plans included coverage during the doughnut hole in 2006, while 29% will provide the coverage next year. Plans with doughnut hole coverage typically charge higher premiums than other plans, and that coverage usually only applies to generics.
Another change in the 2007 market is that beneficiaries will have access to improved online tools -- including enhanced Medicare Web sites, mymedicare.gov and medicare.gov -- that allow them to compare out-of-pocket costs and benefits for different plans.
A recent survey of 3,400 beneficiaries by J.D. Power & Associates finds that only 20% definitely plan to stay with their current plans. The market for 2007 also includes about two million U.S. residents who will turn 65 next year and about four million beneficiaries who did not enroll in 2006 (Zhang/Fuhrmans, Wall Street Journal, 10/3).