Medicare Releases Plans to Aid Controversial Coverage Gaps
Medicare
Cape Cod Times
Paul Crocetti
Boston University Washington News Service
October 4, 2006
WASHINGTON, Oct. 4 —The coverage gap in Medicare has become a hot topic this year, as millions of seniors have found that they have to pay the full cost for prescription drugs once their total costs reach a certain point. But there is some help on the horizon, with Medicare announcing that insurance companies are now offering many new plans, including 15 in Massachusetts, that will cover some of the cost of drugs during the coverage gap.
“There’s never been this number of plans that offered this coverage through the coverage gap,” said Roseanne Pawelec, a spokeswoman for the Boston office of the Centers for Medicare and Medicaid Services. Open enrollment on these private plans, which include Aetna and UnitedHealth, begins Nov. 15 and lasts six weeks.
As part of the Medicare Modernization Act of 2003, drug coverage was added to Medicare. Persons who opt for the coverage must choose a prescription plan from the dozens that are available in their state. Most of the plans require that when annual drug costs reach $2,250, the recipients must pay 100 percent of the charges until total costs reach $5,100. This gap in coverage has been nicknamed the doughnut hole. Between $250 and $2,250, the typical plan pays 75 percent of the cost, and for costs above $5,100 it pays 95 percent.
Medicare’s Web site, www.medicare.gov, lists the new plan offerings and offers help in choosing a plan.
The 15 plans that offer coverage through the gap have, on average, higher premiums per month than the 36 plans that have the doughnut hole. For the 15 plans, 13 of which cover only generic drugs through the gap, the average monthly premium is approximately $49. The average monthly premium for the other 36 plans is approximately $28.
This release of new plans comes amid a flurry of reports on the coverage gap. But there are conflicting figures of exactly how many seniors are affected.
The Congressional Budget Office estimates that, on average, one-third of enrollees enter the gap every year.
A recent nationwide study of Medicare drug plan beneficiaries by Price Waterhouse Coopers found that 8 percent are expected to have drug costs that exceed $2,250 a year, according to Pawelec.
Regardless of statistics, some groups are working to alleviate the coverage gap problem.
In trying to bring the issue to light, Sen. Edward Kennedy (D-Mass.) joined Sen. Robert Menendez (D-N.J.) last week to introduce legislation that would track how many Medicare recipients fall into the gap.
“Millions of seniors will be denied the medicines they need because the law includes a gaping hole in the coverage, and the Bush Administration won’t even tell Congress and the American people how many seniors are at risk,” Kennedy said in a press release. “Our bill requires the administration to level with the American people on how many seniors are losing coverage for the drugs they need to protect their health.”
The Honest Medicare Act of 2006, the bill Kennedy and Menendez introduced, would require the secretary of Health and Human Services to provide a monthly report on how many seniors fall into the coverage gap and how much they pay once inside.
“Some people are not going to pay more, they’re just going to stop taking medicine,” said Susan Regan, a researcher at Massachusetts General Hospital who recently worked on a study comparing various drug plans.
“To me it seems so stupid to have a plan that functions like that,” she said.
The hospital study analyzed a group of about 500 people on the AARP plan, all with the same disease. In this study, 27 percent of the patients fell into the doughnut hole.
Now, with the new plan offerings, Pawelec urges seniors to sit down with their health care providers and evaluate their current plans.
“They should examine the plans,” Pawelec said, “and determine if it makes sense to switch coverage.”
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