Choices Shrink in Drug Plan, Study Says
One of the first independent studies of the Medicare prescription benefit has concluded that many low-income California seniors now have access to a narrower range of drugs than when the state covered their medications, according to a report being released today.
The new federal program contains pitfalls for middle-class beneficiaries as well, the report said, because of wide differences in the number of drugs the private Medicare prescription plans cover. For example, among 10 plans the study analyzed, only two covered all of the top 100 medications taken by Medicare patients. Another two covered 99 of the drugs; one plan covered 71.
And higher monthly premiums did not necessarily mean access to a greater number or variety of prescription drugs.
Medicare administrator Mark McClellan took issue with the report’s conclusions Monday, saying that many of the medications that plans do not cover have generic equivalents that cost much less and are paid for by the plans.
“The concern I would have is implying that because not every cholesterol drug is covered, that the plans aren’t providing access to needed drugs,” he said. “If that is the conclusion people draw, that is a misleading conclusion.”
The report, among the first assessments based on government data rather than anecdotal evidence, comes as California is experiencing significant problems with the transition of low-income seniors and disabled people from the state Medi-Cal program to the Medicare drug plan. An emergency program instituted by the state as a backstop continues to pay for about 10,000 prescriptions each weekday.
Although focused on the California experience, the report’s findings could have national implications, as federal and state lawmakers grapple with ways to work out problems with the new benefit.
“This is true across the country -- this is not a California phenomenon,” said Jonathan Blum, a vice president of Avalere Health, a Washington, D.C., consulting firm that conducted the study for the California HealthCare Foundation. Its findings will be presented today at a joint hearing of the California Assembly’s health and aging committees.
On Jan. 1, when the Medicare benefit took effect, nearly 1 million elderly low-income Californians were automatically transferred into it from Medi-Cal, the state’s version of Medicaid. The former Medi-Cal beneficiaries were assigned at random to one of several private plans, with no consideration of the drugs they were taking.
There were big differences in coverage among the plans, which have wide latitude in choosing the drugs they will pay for. Of those plans accepting Medi-Cal beneficiaries, the most inclusive covered 3,360 medications, while the most restrictive covered 626, the report found.
The Food and Drug Administration has approved about 8,000 medications, virtually all covered by Medi-Cal. The Medicare plans are required to offer at least two choices in every major class of drugs.
Focusing the analysis on four classes of medications -- drugs used to treat psychosis, AIDS, high blood pressure and high cholesterol -- the study found disparities.
“Many ... beneficiaries, even if they are properly enrolled in a drug plan, have coverage that is inferior to their coverage under Medi-Cal for the four classes analyzed,” the report said.
It also found that co-payments, although modest, are higher than what low-income seniors paid under Medi-Cal.
Among the drugs used to treat schizophrenia and other serious mental illness, Medi-Cal covered 20 medications, according to the study. Of the Medicare plans, one covered 15 of the drugs, while the most inclusive covered 21. The median was 18 medications.
Among AIDS drugs, the plans covered the same median number, 23, as Medi-Cal had.
There was a wider difference in coverage for drugs used to treat high blood pressure and high cholesterol. Medi-Cal covered 12 blood pressure drugs; the number covered by the plans ranged from five to 12, with a median of eight.
Similarly, Medi-Cal covered 14 cholesterol-lowering drugs, while the number covered by the Medicare plans ranged from seven to 20, with a median of 10.
Medications for severe mental illness and AIDS are in a specially protected category, under which Medicare requires the private plans to cover most or all available medications. Those special protections appear to be working, the report found.
But it questioned the policy of randomly assigning low-income beneficiaries to plans in which some of their drugs might not be covered.
“Especially to the extent that [beneficiaries] lose access to drugs that reduce other, higher-cost medical services, the state of California would face higher costs when Medi-Cal pays for the more expensive care,” the report said.
Some California pharmacists say that all of the participants in the new drug plans are likely to face more coverage problems next month, after a 90-day transition period expires. Special medical authorization then will be needed to get drugs not on a plan’s approved list.
“When April 1 rolls around, there are going to be more frequent incidents of patients having to confront these types of things,” said John Cronin, owner of Community Pharmacy of Escondido. “Right now when we transmit [such] a claim, we get a message saying they’ll cover it this time, but they’re not filling it after April 1. We are basically sending that information to the physicians.”
Before signing up for a drug plan, the report recommended, seniors should check not only whether the medications they currently take are covered, but also how many of the top 100 Medicare drugs are included. That way, they can have greater assurance of comprehensive coverage if they require new medicines.