Thursday, November 8, 2007 (SF Chronicle)
Medicare drug plans are changing - and costing more
Victoria Colliver, Chronicle Staff Writer


Medicare beneficiaries who fail to examine next year's changes to
their
prescription drug plans may find the price of their pills tougher to
swallow come Jan. 1.
Enrollment begins Nov. 15 for the new crop of drug plans, and health
advocates warn that people are likely to see increases in their monthly
premiums - and no guarantees that drugs covered under their plan this
year
will be covered in 2008. Among the changes:
-- Monthly premiums for drug plans paired with traditional Medicare
will
increase in California by an average of 24 percent.
-- Nationwide, about 75 percent of enrollees in drug plans face
premium
hikes if they stay in the same plan next year.
-- Millions of low-income and disabled people covered by both
Medicare and
Medicaid - about 500,000 of whom live in California - automatically
will
be switched to new plans that may or may not cover their drugs.
"It may feel like the same old thing and not worth changing. But, in
fact,
plans are changing, and consumers may find themselves better off making
a
switch," said Tricia Neuman, vice president of the Kaiser Family
Foundation.
Since the federal government added prescription drug coverage to its
Medicare benefits in 2006, about 24 million of America's 43 million
seniors have taken advantage of the new option. The program, known as
Medicare Part D, is administered by private companies that are approved
by
the federal government to sell drug plans.
Medicare is available to people 65 and older and those who qualify
because
of disability or income level.
There are two main ways to get drug coverage under Medicare. One is
to be
covered by traditional Medicare and buy a separate Part D drug plan for
an
additional monthly fee. But a growing number of plans combine health
and
prescription coverage under one roof, which means medical and drug
services are handled by a private company.
Under this free-market approach, more than 1,800 plans are available
nationwide. In California, seniors have their choice of 56 stand-alone
plans, all of which are available statewide.
An additional 180 Medicare health plans, which can come in the form
of a
health maintenance organization, or HMO, are sold throughout the state,
but where those plans are offered varies by county. In addition, there
are
newer forms of Medicare benefits known as private fee-for-service
plans,
some of which have come under fire from consumer groups and the federal
government for marketing abuses.
This dizzying array of options offers beneficiaries both choice and
confusion. But Medicare officials say more choice means competition.
"There are a lot of choices because the market is robust," said Jeff
Nelligan, spokesman for the Centers for Medicare and Medicaid Services.
"Why go into a supermarket and only confine yourself to the first two
aisles? More choices mean more value."
According to Medicare officials, the average monthly premium for
Part D
coverage in 2008 will be $25, up from $22 this year.
This is far lower than the $41 monthly premium predicted by the
federal
government at the beginning of the program. But consumer and health
advocates say the numbers are misleading because they include both the
stand-alone plans and the Medicare health plans, also known as Medicare
Advantage, which are more highly subsidized by the government and are
eligible for rebates not available to standard Part D plans. Some
Medicare
Advantage plans have no premiums.
Californians who stay in the same stand-alone prescription drug plan
will
experience an average 31 percent premium increase next year, said Chris
Perrone, senior program officer for the California HealthCare
Foundation.
Advocates found the average cost of a stand-alone plan in California
for
2008 will increase by 24 percent.
The cheapest plan available this year in California will go up 96
percent.
People who choose that plan, WellCare's Classic plan at $9.70, will
find
themselves paying $19 a month if they stay the course in 2008. Next
year,
First Health Part D Secure offers the state's lowest cost plan at
$14.30 a
month.
"Every single beneficiary is exposed to instability and
unpredictability,"
said Kevin Prindiville, an attorney with the National Senior Citizens
Law
Center in Oakland. "Everyone should be looking at their plan changes
and
making sure the plan they enrolled in is really the best plan for
them."
Prindiville's group is most concerned with the 1.2 million poor and
disabled Californians who are covered by both Medicare and Medicaid, a
joint state and federal program for the indigent known here as
Medi-Cal.
About 600,000 of these dually eligible residents are enrolled in
plans
that didn't have a monthly premium in 2007, but now cost too much to be
offered to these recipients in 2008.
The bulk of these beneficiaries automatically will be switched to
new
plans, but those who are not will face higher premiums. Prindiville
said
there's no guarantee that their new plans will cover the drugs needed
by
this vulnerable population, which tends to be the sickest and poorest
in
the state.
Health advocates also are concerned about the low number of plans
offering
brand-name as opposed to just generic drug coverage through the
infamous
"doughnut hole," a coverage gap built into the program to reduce the
cost
of the benefit.
If consumers hit the hole, they are responsible for 100 percent of
their
drug costs until - or unless - they spend themselves out of the hole.
Next
year, plans pay 75 percent of drug costs until a beneficiary's total
drug
tab hits $2,510. After that point, seniors must pay all drug costs
until
their out-of-pocket spending hits $4,050 and comprehensive coverage
resumes.
Despite their differences, both advocates and Medicare officials
agree
that consumers need to be aware of the changing Medicare marketplace.
"Every year, we talk about having your annual checkup for your
health.
Every year, through this open enrollment period, you should have an
annual
prescription drug checkup," said Dr. Charlotte Yeh, acting director of
Medicare's San Francisco regional office.

You'd better shop around
Open enrollment to choose a new Medicare prescription drug benefit
is Nov.
15-Dec. 31. Those who want to switch plans should do so by early
December
to ensure their benefits start smoothly Jan. 1. Many senior centers
offer
counseling services. Other resources:
-- Medicare.gov offers the most comprehensive online tools to help
consumers pick a plan. The same information will be available at (800)
633-4227.
-- The Health Insurance Counseling and Advocacy Program offers free
individual counseling. Call (800) 434-0222 to be directed to HICAP in
your
county, or go to calmedicare.org.
-- The Medicare Rights Center provides Medicare Part D information
at
medicarerights.org.
-- Benefitscheckup.org is maintained by the National Council on
Aging and
supported by major drugstores, insurers and pharmaceutical companies.
-- AARP does not offer individual counseling but does help with
general
information about Part D. Visit aarp.org or call (888) 687-2277.
Source:
Chronicle research

E-mail Victoria Colliver at vcolliver@sfchronicle.com.
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Copyright 2007 SF Chronicle