Recent Developments In Medicare Rx Benefit

Armen Hareyan's picture

Medicare Rx Benefit

Several newspapers recently reported on developments related to the Medicare prescription drug benefit. Summaries appear below.

  • Low-income benefit: Speakers on Monday at a Capitol Hill forum sponsored by the Alliance for Health Reformdiscussed problems with enrollment and access to medications forlow-income Medicare drug plan beneficiaries and those withdisabilities, CQ HealthBeat reports. According to Stuart Guterman, director of the Commonwealth Fund's Program on Medicare's Future,48% of people with incomes up to 150% of the federal poverty level areunaware that they are eligible for the low-income benefit, and adisproportionate number of them are black or Hispanic or at the lowestend of the income scale. Laura Summer, a researcher at GeorgetownUniversity's Health Policy Institute,said two million low-income beneficiaries will be switchedautomatically to a new plan in 2008 that might not cover medicationsthey take, adding that such beneficiaries might have to forgo takingneeded medications while they work through the appeals process. AARPPolicy Director John Rother called for changes in the way Medicarepremium "benchmarks" are calculated to allow low-income beneficiariesto remain in the same plans from year to year. He also called onlawmakers to include asset test changes in Medicare legislation thatwill be considered later this year (Reichard, CQ HealthBeat, 11/5).
  • Overpayments: WellPoint, UnitedHealth Group, Humanaand other insurers that offer Medicare drug plans should have returnedabout $4.4 billion in 2006 overpayments faster, according to a reportreleased on Tuesday by HHS Inspector General Daniel Levinson, Bloomberg/Indianapolis Star reports. According to the report, CMS"has no mechanism in place to identify situations in which prospectivepayments differ significantly from sponsors' actual costs or to adjustprospective payments accordingly to avoid large discrepancies at theend of the year." House Ways and Means Health SubcommitteeChair Pete Stark (D-Calif.), who is leading efforts to reduce theprogram's reliance on private insurers, said the insurers that owerefunds are getting "multibillion-dollar, zero-interest loans fromMedicare." In a written response, acting CMS Administrator Kerry Weemssaid the overpayments are the result of drugs costing less thananticipated, and future estimated payments likely will be more accurate(Bloomberg/Indianapolis Star, 11/8).
  • Premiumincreases: With the Medicare drug benefit open enrollment periodbeginning on Nov. 15, health advocates are warning that beneficiariescould be faced with premium increases and formularies that might notinclude drugs they need, according to the San Francisco Chronicle. The Chroniclereports that about 75% of beneficiaries nationwide will see premiumincreases if they keep their current drug plan. According to TriciaNeuman, a Kaiser Family Foundation vice president and director of the Foundation's Medicare Policy Project,"It may feel like the same old thing and not worth changing. But, infact, plans are changing and consumers may find themselves better offmaking a switch." In addition, millions of low-income beneficiaries andthose with disabilities who are dually eligible for Medicare andMedicaid could be switched automatically to new drug plans in 2008 that"may or may not cover their drugs," the Chronicle reports (Colliver, San Francisco Chronicle, 11/8).

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