Medicare Watch
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Welcome to MEDICARE WATCH, a biweekly electronic newsletter of the Medicare Rights Center
Vol. 11 , No. 20 : September 30, 2008
Contents:1. FAST FACT
2. MEDICARE IS LESS GENEROUS THAN LARGE EMPLOYER PLANS
3. AVERAGE PART D PREMIUMS RISE IN 2009
4. MEDICARE PRIVATE HEALTH PLAN ADVERTISEMENTS PROVIDE LITTLE INFORMATION
5. CASE FLASH: TIERING EXCEPTIONS IN A PART D PLAN
1. FAST FACT
A report released by Medco Health Solutions, a pharmacy benefits manager, showed that when prescription drugs are covered by insurance, two-thirds of prescriptions initially filled by people with Medicare are for brand-name drugs, but when people fall into the coverage gap they switch to generics. During the coverage gap, people with Medicare must pay the full cost of the drug. When people with Medicare enter catastrophic coverage they tend to switch back to brand-name drugs, with 59 percent of drugs filled during catastrophic coverage being brand-name. (“Seniors Not Quite Embracing Generic Drugs”, Medco Health Solutions, September 2008).
2. MEDICARE IS LESS GENEROUS THAN LARGE EMPLOYER PLANS
Original Medicare has less generous coverage, on average, than coverage provided to employees of large firms or the federal government, due to the lack of an out-of-pocket spending limit, the absence of dental coverage, and the coverage gap in the Part D drug benefit, according to a recent Kaiser Family Foundation analysis.
The report focused on people who are eligible for Medicare because of age, not disability. It compared utilization of health care for three groups of people: relatively healthy people, people with moderate health, and people who are in relatively poor health. The average benefit value of Medicare is $10,610 per year. The typical large employer PPO benefit value was $12,160, and the standard Federal Employees Health Benefits Program plan was worth $11,780. Both the large employer PPO and federal options include an out-of-pocket spending limit.
Medicare has higher cost-sharing than the comparison plans, meaning that Medicare pays a smaller share of the total health care costs on average than the typical large employer PPO or the FEHBP standard option. In 2007, Medicare paid 74 percent of costs associated with health care, while the large employer PPO paid 85 percent and the FEHBP standard plan covered 83 percent of total costs.
Even for people in good health with low health care costs, people with Medicare pay an average of 43 percent of their total health care costs, or about $1,120 annually. This is compared to an average of 36 percent for those in a large employer PPO and 35 percent for those with the FEHBP standard option. For people with moderate costs, Medicare lags behind the two other plans, and has more than double the out-of-pocket spending than the FEHBP standard option. The difference in out-of-pocket spending for people in Medicare with moderate costs could result from the high deductible for hospital stays or from entering the prescription drug option coverage gap.
3. AVERAGE PART D PREMIUMS RISE IN 2009
There will be significant increases in premium costs for Part D drug plans in 2009.
“[P]lans do change their offerings from year to year. Some beneficiaries may see significant premium increases or changes, such as reduced coverage in the gap, if they stay in the same prescription drug plan in 2009,” according to a press release from the Centers for Medicare & Medicaid Services. People with Medicare are encouraged to review how their plans are changing and what other options are available to them to determine which plan best meets their needs.
The average monthly premium in 2008 for Medicare prescription drug plans was $30. The average premium in 2009 will be $37, a 24 percent increase. Additionally, those enrolled in one of the ten largest drug plans could see average increases of more than 30 percent, according to Avalere Health’s calculations.
Specifically, two of the nation’s largest plans, both sponsored by Humana, are increasing premiums by over 60 percent in 2009. By January 2009, the premium for Humana’s standard drug plan, the second largest in the country, will have increased by 330 percent since it launched its “low-premium” plan in 2006.
In addition to increased premiums, most prescription drug plans still do not offer gap coverage. In 2009, 75 percent of PDPs offer no gap coverage and 56 percent of Medicare private health plans offer no gap coverage. The Kaiser Family Foundation estimates 3.4 million people with Medicare reached the coverage gap in 2007.
Open enrollment for 2009 prescription drug plans begins November 15 and ends December 31.
4. MEDICARE PRIVATE HEALTH PLAN ADVERTISEMENTS PROVIDE LITTLE INFORMATION
Medicare private health plan (also known as a “Medicare Advantage” plan) advertisements include relatively little substantive information about plans, and overlook people with Medicare who are in need of chronic care, according to a recent Kaiser Family Foundation report.
Among the most prominent topics of advertisements were extra benefits, such as vision, hearing, preventive care and dollar savings (for example, the low/no cost of plan premiums). Specifically, 71 percent of all Medicare Advantage plan advertisements promoted extra benefits and 56 percent of Medicare Advantage plan advertisements promoted the promise of no additional premium.
However, it appears that the majority of Medicare private health plan advertisements did not include important, basic information. For example, 58 percent of advertisements examined for the report did not include information about monthly premiums and plan types, specifically whether a plan is an HMO or PPO.
Additionally, while Medicare private plans seemed to reach out to ethnic and racial minorities in their advertisements, plans did not appear to reach out to those Medicare populations most in need of comprehensive coverage, such as the people with disabilities under 65 and seniors with chronic conditions. Less than one percent of advertisements mentioned people eligible for Medicare as a result of a disability, and no advertisements featured images of seniors who appeared sick or physically frail. Advertisements for Medicare Advantage plans outnumbered advertisements for stand-alone prescription drug plans three to one.
5. CASE FLASH: TIERING EXCEPTIONS IN A PART D PLAN
Ms. B is enrolled in Original Medicare Parts A and B and has prescription coverage through a stand-alone Medicare Part D prescription drug plan (PDP). Ms. B takes several medications, including one to control her blood pressure. She had tried a number of different blood pressure medications in the past, but only this particular drug stabilized her condition without serious side effects. Two months ago, Ms. B got a written notice from her plan telling her that next year this effective medication would no longer be a “Tier 2” drug (a less expensive or “preferred” brand-name drug). It would be moved to “Tier 3” of her plan’s formulary (list of covered drugs) and would be considered a “non-preferred” brand-name drug that would cost twice as much. The notice informed Ms. B that a different, preferred brand-name drug would be available at the Tier 2 cost.
Since Ms. B could neither take the plan’s suggested alternative, nor afford to pay twice as much for her medication, she began looking at options that would help her get assistance. She quickly discovered her income was too high for Medicaid, Extra Help and her State Pharmaceutical Assistance Program (SPAP).
Ms. B called the Medicare Rights Center and explained her situation. The hotline counselor told Ms. B that she had another option besides assistance programs. While plans are allowed to change prescription drug costs and restrictions from one year to the next, plan members have the right to ask their plan for an “exception” to certain rules. When you ask for a “tiering exception,” you write a formal request to your plan, asking the plan to move your medication to a lower-cost tier for you. As long as your medication is not in a “specialty tier” (generally the most expensive medications), you can request a tiering exception. The counselor advised Ms. B to ask her doctor to write a letter of support explaining why she needs to take this particular medication rather than the other brand-name medication that the plan would cover in Tier 2. Ms. B sent her tiering exception request to the plan along with the letter from her doctor. A few days later, she got a letter back from the plan, denying her request.
Ms. B called the Medicare Rights Center hotline again, and the hotline counselor told her about her right to continue to fight the plan’s decision. Ms. B could ask the plan to reconsider their denial by asking for a “redetermination”; she would just need to resubmit her written request and the letter from her doctor. If the plan turned her down again, she could appeal at a higher level. Ms. B ultimately sent in her request for redetermination and the plan again refused to grant the tiering exception. She then followed the counselor’s advice and appealed to the “Independent Review Entity” (IRE), a review body unaffiliated with the plan. The IRE eventually decided to grant Ms. B the tiering exception, so that Ms. B would be able to continue to get her medication at the lower cost next year.
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Medicare Part D Appeals Help for Advocates Is Here!
MRC’s new Medicare Part D Appeals: An advocate’s manual to navigating the Medicare private drug plan appeals process offers an easy-to-understand, comprehensive overview of the entire appeals process, including real-life case examples, a glossary of important appeals terms, a sample protocol for advocates, and links to important resources.
Register for a FREE copy of this great resource.
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Medicare Part D Monitoring Project
The Medicare Rights Center would like to hear about your experience, or that of someone you know, enrolled in a Medicare private drug plan. With information about what the issues are with Medicare Part D, we will be able to demand that those problems be fixed.
Submit your story at http://www.medicarerights.org/partdstories.html.
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The Medicare Rights Center is a national, not-for-profit consumer service organization that works to ensure access to affordable health care for older adults and people with disabilities through counseling and advocacy, educational programs and public policy initiatives.
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