Open Enrollment Begins for Medicare Drug Benefit

The open enrollment period begins Wednesday for the 2007 Medicare prescription drug benefit, the New York Times reports. During the open enrollment period, which ends Dec. 31, beneficiaries can switch plans or sign up for a plan for the first time.

According to the Times, many beneficiaries might want to change plans "because prices have changed, with some of the most popular plans charging much higher premiums for 2007." The average monthly premium for the standard drug benefit for 2007 will be $24, about the same as in 2006, although "many plans provide additional benefits for an extra premium," the Times reports.

The average monthly premium for stand-alone drug plans will increase 10% for 2007, while the average monthly premiums for drug coverage through Medicare managed care plans will decrease 35%, the Times reports. The majority of plans include a gap in coverage during the so-called "doughnut hole," although some cover generic drugs during the gap and a few also cover brand-name medications, according to the Times.

Deane Beebe of the Medicare Rights Center said, "Beneficiaries tell us this was a helpful benefit for six or eight months, until they fell into the coverage gap." She added, "In 11 states, we cannot find any free-standing drug plan that provides coverage for brand-name drugs in the gap."

However, HHS Secretary Mike Leavitt said, "The program is working. People are happy." Several recent surveys have found that about three-quarters of beneficiaries enrolled in the drug benefit are satisfied with their coverage (Pear, New York Times, 11/15).

The provision of the 2003 Medicare law that prohibits the federal government from negotiating with pharmaceutical companies is the legislation's "most conspicuous example of overreach" on the part of the drug industry lobby, Alan Murray, a Wall Street Journal columnist, writes in an opinion piece. "As a result," he writes, proposals to allow the government to negotiate prices have "become Democratic dogma."

However, that "doesn't make it a good idea," according to Murray. He says, "With a market share of about 46%, the government would set drug prices, not negotiate them, and then establish 'formularies' telling seniors which drugs they could use and which ones they couldn't. Would that make seniors feel better off? I doubt it."

Murray continues, "One reason the industry is in such a mess is because its leaders have spent too much time trying to get Washington to solve their problems, and too little time fixing a broken business model." According to Murray, the drug industry's "challenge ... is to balance the legitimate desire for lower prices against the equally legitimate desire for new drugs, which cost large sums of money to develop."

Although the "marketplace doesn't always get that balance right, ... there's no reason to think government bureaucrats would do it better," Murray writes. Murray concludes, "The pharmaceutical industry's bad bedside manner has earned it a lot of enemies. But its lifesaving and life-enhancing products should make it many more friends" (Murray, Wall Street Journal, 11/15).