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Medicare recipients will soon be swamped with options for privatized prescription drug coverage

September 28, 2005
By: Leslie Yingling
State Capital Bureau

JEFFERSON CITY - More than 800,000 Missourians who are over 65 or disabled will soon be faced with a multitide of options for privatized prescription drug coverage under Medicare.

The Bush administration last week approved 10 insurers to provide nationwide coverage under Medicare Part D, the federal insurance program's first-ever prescription drug coverage program. Some companies also will administer state and regional plans.

Unlike the state-federal Medicaid program that provides coverage for the lower income, Medicare is funded completely by the federal government and covers all of the nation's elderly, regardless of income.

In Missouri, 15 companies have been approved to offer plans with the Medicare prescription drug benefit.

But it could be even more complex for Missourians since those 15 providers could offer more than one insurance plan with the Medicare drug benefit, said Julie Brookhart a spokesperson for Kansas City regional office of the federal agency that runs Medicare.

Details about individual plans will be available starting Oct. 1, when companies can begin marketing their programs with enrollment starting two weeks later.

All drug coverage under Medicare Part D will be provided by private insurance companies and will include deductibles and copayments. Medicare recipients will be able to choose among a range of stand-alone plans, which provide only prescription drug coverage, or Medicare Advantage Prescription Drug plans, which offer managed care arrangements in addition to Medicare HMOs.

Medicare administrators say competition among the approved insurers will keep costs low.

Critics, however, say the government, rather than the private insurance market, should have the power to negotiate drug prices on behalf of the 41 million elderly and disabled Americans on Medicare.

In Missouri, a non-profit organization, CLAIM, handles enrollment for the program.

Those eligible for Medicare include people over age 65, and eligible disabled individuals who have Social Security disability insurance, said CLAIM manager Carol Beahan.

People on both Medicare and Medicaid automatically will be enrolled if they don't choose a prescription drug plan, and will qualify for extra help that could pay for most or all of their drug coverage, she said.

This could aid Medicaid recipients who faced higher spend-downs after cuts to the state health care program took effect Sept. 1. "It is going to be a significant benefit for alot of those individuals because many will still qualify for the extra assistance," Beahan said.

Under Medicare's prescription drug plan, individuals will pay the first $250 of drug costs out of pocket.

Medicare wil pay 75 percent of the next $2,250 in drug costs, but beneficiaries are responsible for paying the next $2,850. After enrollees have spent $3,600 of their own money on prescription drugs, deductibles and copayments, a "catastrophic" benefit kicks in and Medicare will pay 95 percent of drug costs.

Individuals elligible for extra assistance because of limited income and assets will get more help.

Beginning Oct. 13, the specifics of all Medicare prescription drug plans will be posted online at http://www.medicare.org, Beahan said. A search tool will allow users to find plans based on the medications they need, and their preferred pharmacies, said Tracey Borgmeyer, CLAIM program trainer.

Beahan said the search tool will help trim down coverage options. "There will be many plans to choose from, but it doesn't mean that all of those plans would best meet individual needs," she said.

"The search tool is to help give them their best options," Brookhart said. "People are going to look at cost, coverage, and convenience."

Deciding which plan to purchase could seem complicated, because there are so many options, Beahan said, but they won't cover the same drugs. All plans must cover at least two drugs in each class, but they will have different preferred drug lists, or formularies. "It's important to pick a plan that includes most of your medications," she said.

"We've seen already that choice is a good thing," Brookhart said regarding those who may be overwhelmed by the number of options. "The competition between companies is helping to keep costs low while adding coverage beyond the standard, required Medicare coverage."

Beahan said there's no sure way to know yet what exact costs will be, but expects Part D coverage to be the cheapest prescription drug plan for Medicare beneficiaries who do not have prescription drug care.

"Insurers are going to use their buying power from enrollment to negotiate drug prices to get better rates from drug companies," Beahan said. "They had the opportunity with these plans to eliminate or significantly reduce deductibles, and many have," she said.

Borgmeyer said that for someone on Medicare, with no prescription drug care and at least $200 monthly drug costs, Part D will mean savings of at least $1,000 per year.

In Missouri, 15 companies will provide prescription drug-only coverage, including Humana Insurance, which will will offer at least one stand-alone plan with premiums under $20. Five of the eight insurers offering Medicare Advantage plans in Missouri will offer plans with no additional premium for drugs.

However, those companies could increase overall premiums without categorizing them as drug premiums, Borgmeyer said.

Insurers can begin their marketing campaigns Saturday, and can advertise by television, radio, billboards and direct mail, but cannot go door to door. They must honor the national do-not-call registry, as well as requests to not call again.

Insurance companies providing coverage under Part D are prohibited from enrolling Medicare beneficiaries or asking for personal information over the phone.

Anyone concerned about the legitimacy of a plan or advertisement can call CLAIM to check it out, Beahan said.

"We want people to enroll because you never know when you'll have an increase in prescription drug needs," Beahan said. "We don't know what tomorrow will bring, so we want people to be prepared with insurance."

Most people with Medicare should receive a Part D handbook in the mail this week, Brookhart said. Those who have drug coverage through their employer or union will receive letters explaining how the new Medicare plan will affect their coverage.

More information and enrollment help is available through CLAIM's helpline, 1-800-390-3330. Live operators are avalilable 24 hours every day at the National Medicare Hotline, 1-800-633-4227.