Medicare Releases Data on 2007 Drug Plan Options

Armen Hareyan's picture

Medicare Prescription Drug Plan 2007

Seniors who are satisfied with their current Medicare prescription drug coverage will not have to take any action when the Medicare Open Enrollment period begins November 15th, but those who wish to make a change will find new options with lower costs and more comprehensive coverage available for 2007. They will also find new tools from Medicare to help them make a choice. Surveys consistently show over 80 percent of Medicare beneficiaries are satisfied with their current coverage and drug plans. As a result of the Medicare prescription drug benefit, more than 38 million seniors and people with disabilities now have some form of drug coverage.

The monthly premium beneficiaries will pay in 2007 will average $24 if they stay in their current plan - about the same as in 2006. While some people will see an increase in their current plan premiums, they have the option to switch plans. Nationally, 83 percent of beneficiaries will have access to plans with premiums lower than they are paying this year, and beneficiaries will also have access to plans with premiums of less than $20 a month.

Beneficiaries will have more plan options that offer enhanced coverage, including zero deductibles and coverage in the gap for both generics and preferred brand name drugs. Plans are adding drugs to their formularies. Nationwide the average number of drugs included on a plan formulary will increase by approximately 13 percent, and plans will also use utilization management tools at a lower rate.


"The Medicare prescription drug benefit, passed by Congress and signed into law by the President, is saving seniors an average of $1,200 a year, and it just keeps getting better," HHS Secretary Mike Leavitt said. "In 2007, there will be more plans with coverage in the gap, more drugs covered, and more help from Medicare in choosing the plan that's best for you."

During the 2007 bidding process, strong competitive pressure resulted in bids (costs of coverage) that average 10 percent less than in 2006. According to guidance from the Centers for Medicare & Medicaid Services (CMS), each drug plan or health plan needed to show meaningful variation in their plan choices, including only two basic coverage options per region. CMS also encouraged plans to offer a third option only if it included enhanced benefits, such as providing coverage in the coverage gap ("donut hole") or covering excluded drugs.

"With next year's drug coverage, we want to build on the high level of beneficiary satisfaction in 2006 by strengthening the drug benefit in key ways," said CMS Administrator Mark B. McClellan. M.D., Ph.D. "As a result of robust competition and smart choices by seniors, plans are adding drugs, removing options that were not popular, and providing more options with enhanced coverage."

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