Private health insurers that market Medicare prescription drug plans in 2007 will offer more plans, several of which will have lower premiums and more of which will provide coverage during the so-called "doughnut hole," Bush administration officials said on Friday, the New York Times reports.
Health insurers on Sunday began to market 2007 Medicare prescription drug plans, and the six-week open enrollment period for the 2007 plan year begins on Nov. 15. In 2007, all states except Alaska and Hawaii will have more than 50 Medicare prescription drug plans available, and 23 states will have at least 55 plans available. Most states in 2006 had 40 Medicare prescription drug plans available (Pear, New York Times, 10/1). Seventeen health insurers will market nationwide Medicare prescription drug plans in 2007, compared with nine in 2006, administration officials said (Zhang/Fuhrmans, Wall Street Journal, 9/30). Almost none of the health insurers that marketed Medicare prescription drug plans in 2006 will end participation in the program in 2007 (Lopes, Washington Times, 9/30).
Premiums
The Medicare prescription drug plans in 2007 will have an average monthly premium of $24, the same as in 2006, which is 40% less than first estimated for 2007 (New York Times, 10/1). Medicare beneficiaries who are satisfied with their current prescription drug plans will not have to take action to remain in their plans in 2007, administration officials said. However, Medicare beneficiaries who do not switch prescription drug plans might experience changes in their plan premiums, copayments or formularies (Wall Street Journal, 9/30). CMS Administrator Mark McClellan said that 83% of Medicare beneficiaries currently enrolled in prescription drug plans will have the ability to switch to a lower-priced plan in 2007 (Washington Times, 9/30). In 2007, the lowest-priced Medicare prescription drug plan will have a monthly premium of about $10, compared with about $2 in 2006, according to administration officials (Wall Street Journal, 9/30). The highest-priced Medicare prescription drug plan in 2007 will have a monthly premium of more than $110 (New York Times, 10/1). According to the Wall Street Journal, many of the "more expensive plans in 2006 have come down in price to compete with the low-cost options" that proved popular with Medicare beneficiaries. Aetna in 2007 will reduce monthly premiums for Medicare prescription drug plans by 5% to 13%, and Cigna will reduce monthly premiums by 10% to 30%. Humana, which had the second-highest Medicare prescription drug plan enrollment in 2006 -- will increase monthly premiums for some plans in 2007, but plans marketed by the company will remain the lowest-priced in 38 states (Wall Street Journal, 9/30). Medicare prescription drug plans will have a median monthly premium of $33.40 in 2007, compared with $36.01 in 2006, according to Avalere Health (Salganik, Baltimore Sun, 9/30).
Coverage
Medicare prescription drug plans in 2007 will cover an average of 4,390 medications, an increase of 13% from 2006 (New York Times, 10/1). In addition, fewer Medicare prescription drugs plans will use prior authorization requirements or other utilization techniques, CQ HealthBeat reports (Carey, CQ HealthBeat, 9/29). In most states, about 15 or 16 Medicare prescription drug plans will offer coverage during the doughnut hole, in most cases only for generic medications, according to Avalere (Wall Street Journal, 9/30). Under the doughnut hole, Medicare beneficiaries are responsible for 100% of annual prescription drug costs between $2,250 and $5,100. Medicare covers 95% of annual prescription drug costs that exceed $5,100 (Kaiser Daily Health Policy Report, 9/25). CMS will release more detailed information on Medicare prescription drug plan formularies and copays in mid-October (Baltimore Sun, 9/30). According to the Times, the "existence of so many plans provides some evidence to support the theory that the federal government can stimulate fierce competition among private insurers -- regulated and subsidized by the government -- to help control health costs for beneficiaries and taxpayers" (New York Times, 10/1).
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