Numbers High for People Seeking Information on Drug Benefit

CMS officials recently said that a high volume of calls to the Medicare toll-free phone line and visits to its Web site demonstrate that many beneficiaries who were enrolled in the drug benefit in 2006 were evaluating their 2007 options, although most decided not to change plans, The Hill reports.

From Oct. 15, 2006, through Dec. 27, 2006, the Medicare phone line received five million calls, and its "Plan Finder" Web site received 30 million page views, CMS said.

It is not yet clear how many beneficiaries signed up for plans, according to a CMS spokesperson.

Kirsten Sloan, national coordinator for health issues at AARP, said, "I think you'll find that most Medicare beneficiaries did shop around."

However, Robert Hayes, president of the Medicare Rights Center, said, "Most people seemed unable to bear a whole new examination this year." Hayes added that some beneficiaries might not learn of changes to their plans until it is too late to switch (The Hill, 1/3).

Monthly premiums for Humana's lowest priced Medicare prescription drug plan will increase an average of 60% nationwide, the Boston Globe reports. Monthly premiums for the plan will increase 466% in seven midwestern and western states, although the premiums will decrease in three states.

The plan, called Humana Standard, had more than two million members nationwide in 2006.

According to the Globe, some advocates and analysts maintain that the insurer "kept its prices low in 2006 to gain market share."

Steve Findlay, a health care analyst at Consumers Union, said, "That's not an acceptable inflationary increase in prices," adding, "That's sucker them in and you just start raising the prices."

Humana spokesperson Chris Curran last week said the premium increase is the result of the formula used by CMS to determine the subsidy the government pays private insurers who sponsor Medicare drug plans.

However, Paul Spitalnik, a CMS actuary, last week said, "If a plan wanted to have a lower-priced competitive product, they needed to have a lower bid than they did for 2006 plans" (Krasner, Boston Globe, 12/31/06).

Humana said that much of the increase in premiums was the result of Medicare's formula for subsidies under the drug benefit, according to the Globe.

Humana spokesperson Tom Noland this week said that the insurer's 2007 premiums "ended up being higher than what we bid." He added, "The fact is that the premium prices that eventually appear on the government Web site are actually set by the government, and not by the individual health benefits companies."

Boston Mayor Thomas Menino on Tuesday called for an investigation into Humana's pricing, calling the premiums a "bait-and-switch" tactic.

In addition, Sen. Edward Kennedy (D-Mass.), incoming chair of the Senate Health, Education, Labor and Pensions Committee, in a letter to acting CMS Administrator Leslie Norwalk said, "It is unconscionable that insurance companies should be allowed to raise their rates by 100%, 200% or even 400% after luring seniors into the program with artificially low rates" (Krasner, Boston Globe, 1/3).

NPR's "Morning Edition" on Tuesday included an interview with David Wessel, deputy Washington, D.C., bureau chief at the Wall Street Journal, on the first year of the Medicare prescription drug benefit (Montagne, "Morning Edition," NPR, 1/2). Audio of the segment is available online.