Few Medicare Plans In 2008 Will Offer Brand-Name Insurance Coverage

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Few Medicare plans in 2008will offer brand-name prescription drug coverage in the so-called"doughnut hole" gap because of cost, meaning that Medicarebeneficiaries will have fewer options when choosing a plan during the openenrollment period that ends Dec. 31, the San Francisco Chronicle reports. The doughnut hole gap in2008 begins when drug costs for an individual and his or her insurer reach$2,510 and ends when spending reaches $5,726. Only one plan, located in Florida, will providecoverage for brand-name prescription drugs in the gap in 2008.

According to the Chronicle, the lack of brand-name coverage in thecoverage gap "is a big change for beneficiaries who opted to spend morefor higher-level coverage that offered them some protection when theyreached" the doughnut hole. Brand-name coverage within the gap is availableto some individuals through Medicare Advantage plans, but "that meansgiving up traditional Medicare in exchange for a health plan managed by aprivate company," according to the Chronicle.

Debbie Smith, regional president for senior products in the western region for Humana, saidthat the company stopped offering brand-name coverage because it iscost-prohibitive, adding, "We have to take the experience of theutilization and factor that in. It is about balancing a premium and the benefitfor the member" (Colliver, San Francisco Chronicle, 12/9).

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Open Enrollment PeriodHeightens Insurance Fraud

In related news, the WallStreet Journal reports that during the open enrollment period, regulatorsare "warning that an increasing number of unscrupulous insurance agents... view it as open season for preying on older adults." Illegalactivities of insurance salespeople include "violating federal regulationsagainst door-to-door selling of coverage and the forging of signatures,"according to the Journal. Mary Jo Hudson, director of the Ohio Department of Insurance, said that the complexity ofMedicare and the vulnerability of the elderly to high-pressure sales tactics"is very bad news" for beneficiaries.

Critics say that the unscrupulous sales practices are driven by"commission structures that favor promoting one plan over another no matterwhat the needs of an applicant" and also note that insurance companies "hold contests to push their products thatpromise salespeople prizes like trips to Las Vegas," according to the Journal(Lauricella, Wall Street Journal, 12/9).

Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.

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