Take with some research
Americans planning to buy their drugs through Medicare’s prescription drug program -- Medicare Part D -- have until Dec. 31 to sign up for coverage during 2008. But they shouldn’t wait until the last moment.
Many plans will change for the coming year, increasing or in some cases decreasing by various amounts their premiums, deductibles or drug co-pays. Among the changes that Californians in particular can expect are:
* More coverage choices, especially among Medicare Advantage plans, which give beneficiaries medical care and prescription drugs but may limit choice of doctor and hospital.
* More plans providing generic drug coverage for the doughnut hole, the gap in coverage after beneficiaries and insurers jointly spend $2,510. From that point, beneficiaries have to pay the full cost of their medicines until their prescription drug spending reaches $3,216.25, after which the government pays 95% of their drug costs.
Consumers need to do some research to make sure they’re getting the least expensive plan for their needs, says Robert Hayes, head of the Medicare Rights Center in New York City.
In ZIP Codes in five states (New York, Illinois, California, Texas and Florida), the nonprofit Consumers Union compared January 2007 Medicare Part D Plan out-of-pocket prices for five common drugs and monthly premiums with those advertised for January 2008. At least 82% of plans in each state had increased their overall costs, and, of the total 247 plans, 39 plans, or 16%, had increased their costs 25% or more.
“A plan that was a bargain this year may be the exact opposite next year,” says Bill Vaughan, senior policy analyst for Consumers Union in Washington, D.C. “Beneficiaries have just a few weeks during open enrollment to avoid being stuck with a high-cost plan in 2008,” he says.
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To stay or change?
Drug coverage via Medicare was begun three years ago. It allows people 65 and over (and many younger people who have been receiving Social Security disability benefits) who don’t have other prescription drug coverage to sign up each year with a plan in their area that has been authorized by Medicare to provide drug (or drug and healthcare) coverage. The number of plans authorized for 2008 in California will increase from 200 in 2007 to 237, though not everyone is eligible for every plan. Some plans are limited to certain counties, for example.
People who had coverage this year and want to stick with the same plan don’t have to do anything to maintain that coverage, says Kerry Weems, administrator of the Centers for Medicare and Medicaid Services in Baltimore. But that could be a financially poor choice.
Nationally, people who stay in the same plan (if that’s an option -- each year, a few insurers end their Medicare drug coverage) will see premiums increase an average of 17%. People in California will be hit harder; those who stick with the same plan can expect premiums to soar 31% on average, according to research done for the California Healthcare Foundation.
But changing plans can have its pitfalls as well, which is why many beneficiaries should get assistance (see box), especially those who can’t easily navigate the Medicare website to compare costs.
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Many plans will raise co-payments
Although many plans have a relatively low monthly premium of $25 and often no deductible, drug co-pay costs have gone up in many plans, says Juliette Cubanski, a Medicare policy analyst for the Kaiser Family Foundation in Washington, D.C. Finding out those costs requires beneficiaries to input all of their drug information, which can be tedious, she says.
Generally speaking, plans have four co-pay categories, better known as tiers -- generic, preferred brand, non-preferred brand and specialty -- with each tier being slightly more expensive. For 2008, for example, Wellpoint will raise the monthly co-pay for preferred brand name drugs (including Lipitor and Plavix) from $29 per drug to $44.30, or an annual increase of $183.60 per drug in that tier, according to an analyst from the Kaiser Family Foundation.
And fair warning: Drug prices for Medicare beneficiaries are often much higher than for people who are covered through private health insurance. That’s because Medicare recipients use more medications than privately insured younger people, Weems says.
Low-income Californians especially could use some assistance choosing a plan this year, says Chris Perrone, senior program officer for the California Healthcare Foundation. The plans for about 100,000 low-income state residents who paid no premium out of their own pockets last year have now increased their premium, which may be higher than the limit set by Medicare for low-income subsidies. Low-income beneficiaries who stick with these plans will have to pay the difference, between $1.20 and $13.10 per month.
Those beneficiaries should have received a letter from their plan informing them of the change; if not, they should call their plan to check. An additional 500,000 beneficiaries will be reassigned automatically to plans with premiums that meet the cap, but beneficiaries will have to check whether the new plan covers the drugs they need, and switch out if they don’t.
At least one new feature is meant to ease the way for consumers: Medicare is offering ratings, ranked by 1 to 5 stars, of plan quality on such things as, for example, whether the operator on the phone disconnected callers and how long consumers had to wait on average.
The information shouldn’t be the No. 1 concern when searching out plans, but it shouldn’t be ignored either, says Deane Beebe, a spokesman for the Medicare Rights Center. After all, consumers may need to call the plan at some point during the year. For example, programs sometimes move a drug into a different tier during the course of the year, making it more expensive. People who have already been taking the drug are supposed to get the drug at the former, lower cost, however, and a call can straighten this out, Beebe says.
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Best to do some checking
Although plans should have written their customers about any changes for 2008, says Jeff Nelligan, a spokesman for the Centers for Medicare and Medicaid, it’s a good idea to check the Medicare website.
Nor should consumers assume they have the right plan already. Stuart Guterman, head of the Program on Medicare’s Future at the Commonwealth Fund, a policy group in Washington, D.C., suggests that plan participants list all the drugs they take and then use Medicare’s Plan Finder to total up the co-pays and compare the total costs -- including premiums and deductibles.
Don’t stop there -- take full advantage of available assistance, urges Kevin Prindiville, staff attorney at the National Senior Citizens Law Center in Oakland. Although the plan finder gives basic information, beneficiaries also need information from the plans themselves on such things as whether they limit the quantity of drugs they pay for, whether a drug will only be paid for after others have been tried and failed and whether they cover some drugs for only some, but not all, conditions.
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(BEGIN TEXT OF INFOBOX)
For help and information
* For starters, use Medicare’s new plan finder at www.medicare.gov. Click on “Medicare Prescription Drug Plans” and then click on “Find and Compare Plans” to determine what changes are in store. That’s the same site to use to analyze the plan offerings in your area.
Or call the agency at (800) MEDICARE (633-4227). Operators can assist callers in navigating the agency’s search engine for qualifying plans, or they can send written information on each plan.
* State-specific guidance is also available. Consumers can contact California’s Health Insurance Counseling and Advocacy Program at www.calmedicare.org/counseling/index.html or (800) 434-0222.
Other sources
Several organizations also offer phone operators or websites to help consumers figure out a plan’s specifics.
* The AARP Guide to Understanding Medicare Drug Coverage explains in clear terms the benefits provided by the programs. A downloadable checklist is useful for comparing costs among plans. Go to www.aarp.org/health/medicare.
* The National Alliance for Hispanic Health, an advocacy group, can answer questions about Medicare Part D benefits for Spanish-speaking beneficiaries. Unlike in past years, however, the group cannot enroll beneficiaries in specific plans. Call (866) 783-2645, Monday through Friday from 8 a.m. to 6 p.m. ET.
* Medicare Rights Center, an independent information source for all things Medicare, offers telephone counseling to answer questions about Medicare Part D. Call (800) 333-4114 Monday through Friday from 9 a.m. to 6 p.m. (EST). The group’s website, www.medicarerights.org /help.html, offers information on various drug plans and tips on comparing them.
Low-income help
* Californians whose incomes fall below roughly $20,000 per year for couples and about $15,000 for individuals may qualify for at least some assistance (income and assets are taken into account) to pay for Medicare drug coverage. Contact the Social Security Administration for more information at (800) 772-1213 or check www.calmedicare.org (the website of California Health Advocates, an advocacy group) for qualification information.
-- Francesca Lunzer Kritz
