MEDICARE WATCH, a biweekly electronic newsletter of the Medicare Rights CenterVol. 9, No. 8: April 11, 2006 Contents: 1. FAST FACT Wholesale prices for 193 brand–name and 75 generic medicines popular with older Americans increased by 6 percent in 2005. The five drugs with the largest wholesale increases included one sleeping aid, Ambien, up 19.5 percent; Lantus, an insulin for diabetics, up 14.9 percent; and three respiratory drugs: Combivent, which rose 22.1 percent, Flovent, up 19.3 percent, and Atrovent inhaler, up 18.6 percent ("AARP: Drug Prices Shot Past Inflation," USA TODAY , April 10, 2006). 2. CMS BOWS TO INDUSTRY INTERESTS The final guidance for Part D plans in 2007 shows the Centers for Medicare & Medicaid Services (CMS) bowing to insurance industry demands and scrapping its earlier proposal to address consumer confusion by reducing the maximum number of plans insurers can offer in a Part D region from three to two. The final guidance allows plans to offer three plans next year, with the requirement that at least one of the plans must provide coverage in the doughnut hole, a coverage gap extending from $2,400 in total spending on Part D drugs to $5,451 in 2007. "In general, we expect that more than two bids from a sponsoring organization would not provide meaningful variation, unless one of the bids is an enhanced alternative plan that provides coverage in the coverage gap," CMS states in its final call letter to drug plans. This year, there are 1,439 stand–alone prescription drug plans with 10 plans offering national coverage. 13 percent of the plans offer coverage of generic drugs in the doughnut hole. Two percent of stand–alone prescription drug plans offer both brand–name and generic coverage in the doughnut hole. CMS did buck pressure from insurance groups to discard the current requirement that "all or substantially all" drugs in six classes (antidepressant, antipsychotic, anticonvulsant, anticancer, immunosuppressant, and HIV/AIDS) be covered. "[T]he requirement of coverage of all drugs in the six categories continues to limit plans' ability to provide the best value [lower prices] for beneficiaries," said a representative from America's Health Insurance Plans (AHIP). Next year, CMS will continue to require "all or substantially all" drugs in the six classes be covered, and that one drug in each of the Formulary Key Drug Types identified by the US Pharmacopoeia guidelines must be covered. This requirement, however, has not restricted the plans from imposing difficult utilization management tools on the drugs in the six designated categories. 3. 2007 PART D COST-SHARING ANNOUNCED The Centers for Medicare & Medicaid Services (CMS) announced the cost-sharing under the standard Part D benefit for next year. For 2007, catastrophic coverage will kick in after $5,451.25 of total drug spending by the drug plan and person with Medicare. The out–of–pocket threshold on drug expenditures before reaching catastrophic coverage will be $3,850, up from 3,600. The deductible is increasing from $250 to $265, and the initial coverage limit is increasing from $2,250 to $2,400. People reaching catastrophic coverage will have copayments of $2.15 for generics and $5.35 for brand–name drugs. People qualifying for Extra Help paying for their Part D costs will see their copayments go from $1/$3 for those receiving the full benefit and $2/$5 for those receiving the partial subsidy to $1/$3.10 and $2.15/$5.35, respectively. These changes will go into effect on January 1, 2007. 4. PART D TRANSITION ENDS EASIER THAN EXPECTED The close of some Part D plans' extended transitional coverage on March 31 gave rise to fewer complaints than consumer groups anticipated, a result softened by some major Part D plans choosing to phase in their formulary restrictions and voluntarily extend temporary transitional coverage. In February, because of significant problems for new Part D enrollees accessing medicines, the Centers for Medicare & Medicaid Services (CMS) mandated a 90–day transitional coverage period for new Part D enrollees taking off-formulary or restricted drugs. WellPoint is ending its transition coverage through the end of April, after which it will gradually phase in its utilization management tools by different drug classes. WellPoint offers Part D plans directly as well as through affiliates, such as UniCare and 14 Blue Cross and Blue Shield plans. UnitedHealthcare is staggering the introduction of prior authorization and step therapy requirements. It operates four national plans including the plan branded by AARP. PacifiCare, which has merged with UnitedHealthcare, has also adopted a similar approach but is extending transitional coverage until June for enrollees on off-formulary drugs. On the other hand, Humana reinstituted its utilization management tools effective April 1, but offers a 60–day transition period, effective from the date of an enrollee's Part D coverage. According to Inside CMS , a trade newsletter, CMS administrator Mark McClellan said that "well under half" of people with Medicare who were obtaining medicines under the temporary transitional coverage are still taking medicines not covered by their plans. These people may run into problems accessing their medicines at the pharmacy as plans end their transitional coverage in the weeks ahead. 5. CASE FLASH: NO RECORD OF EXTRA HELP Ms. K has Extra Help, a federal program that helps eligible people pay for most of the costs of Medicare prescription drug coverage, but her Medicare private drug plan was charging her what members without Extra Help had to pay. She could not afford to get her prescriptions refilled. Ms. K was having trouble contacting her Medicare private drug plan because she is deaf, and her plan's TTY numbers were always busy. Ms. K called her local State Health Insurance Assistance Program (SHIP) hotline for help. A SHIP counselor called her pharmacist, who said that Ms. K's drug plan had no record of her Extra Help status. The counselor told Ms. K to show her pharmacist the letter she had received from Social Security telling her that she had received Extra Help. The counselor then told Ms. K's pharmacist to call Ms. K's Medicare private drug plan and inform the plan that Ms. K had shown him proof that she has Extra Help. Ms. K's pharmacist was able to speak to a plan representative, and her drug plan updated its records. Now Ms. K can afford to get the drugs she needs. To read more cases by subject, go to "Interesting Cases" on our web site at * * * * * To sign up for Medicare Rights Center newsletters, please visit our online
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e-mail to Medicare Rights Center Web site: http://www.medicarerights.org/ Medicare Watch is MRC's fortnightly newsletter, reprinted at AbilityMaine by permission. Each edition contains the latest Medicare policy developments, case stories from our hotline and action steps that to ensure that older adults and people with disabilities get good, affordable health care. The Medicare Rights Center (MRC) is the largest independent source of Medicare information and assistance in the United States. Founded in 1989, MRC helps older adults and people with disabilities get good, affordable health care. |