Average Monthly Premiums Will Increase By 87% In 2007 For Medicare Prescription Drug Plans Providing 'Meaningful Coverage' In Doughnut Hole, Familie

Main Category: Medicare / Medicaid / SCHIP
Article Date: 06 Nov 2006 - 2:00 PDT

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Average monthly premiums in 2007 for Medicare prescription drug plans that offer "meaningful" coverage during the so-called "doughnut hole" coverage gap will increase by 87.4% to $103.20, compared with $55.08 in 2006, according to a report released Wednesday by Families USA, CQ HealthBeat reports. Plans analyzed for the report were considered to have meaningful coverage during the doughnut hole if they paid for the 25 drugs most commonly prescribed to seniors in 2004 in a pharmaceutical assistance program in Pennsylvania (Carey, CQ HealthBeat, 11/1). Under the 2006 doughnut hole provision of the standard prescription drug benefit, beneficiaries are responsible for 100% of prescription drug costs between $2,250 and $5,100. For 2007, beneficiaries will be responsible for 100% of prescription drug costs between $2,400 and $5,451.25 (Kaiser Daily Health Policy Report, 10/16). According to the report, 18 of the 25 most commonly prescribed drugs do not have generic equivalents and therefore are not covered during the doughnut hole under most Medicare drug plans, which for 2007 typically cover only generics within the gap (CQ HealthBeat, 11/1). In 13 states, no insurer will offer Medicare prescription drug plans that include meaningful coverage during the coverage gap -- an increase from four states in 2006, the report found Washington Post reports (Lee, Washington Post, 11/2). Nationwide, 38 of the 2,844 available plans for the 2007 plan year will offer meaningful coverage, compared with 55 of 2,182 plans offered for the 2006 plan year, according to the report (Sorkin, St. Louis Post-Dispatch, 11/2).

Additional Findings
The report also found that the number of beneficiaries who do not have access to meaningful coverage will increase from 375,000 this year to 6.6 million in 2007. That finding is based on the number of beneficiaries with prescription drug coverage as of June 2006. It does not include beneficiaries who qualify for a low-income subsidy that covers drug costs during the doughnut hole or beneficiaries known as dual eligibles -- those enrolled in both Medicare and Medicaid -- whose prescription drug coverage was transferred to Medicare under the drug benefit (CQ HealthBeat, 11/1). For plans that offer any doughnut hole coverage, average monthly premiums will decrease from $48.40 this year to $47.40 next year, according to the report (Washington Post, 11/2).

Comments
Families USA Executive Director Ron Pollack said, "Drug plan coverage in the doughnut hole will be much scarcer in 2007, and, in those states where such coverage continues to be available, it will be far more expensive. This coverage gap never made sense, and now it is getting worse for seniors who take multiple prescription drugs" (CQ HealthBeat, 11/1). Pollack added, "What [CMS is] saying is many of these plans are cheaper and that's indeed true, but they don't cover the top drugs taken by seniors" (Layton, Bergen Record, 11/2). Acting CMS Administrator Leslie Norwalk in a statement said that "all Medicare beneficiaries in all 50 states have the option of an affordable drug plan" that offers partial or complete coverage in the doughnut hole and that beneficiaries in most states "are seeing no change in the number of plans offering coverage of brand-name drugs in the gap" (CQ HealthBeat, 11/1). Norwalk said the report "presents a distorted and incomplete picture" because it "focuses on a very limited number of drugs used by beneficiaries and does not acknowledge the significant additional savings possible through the use of lower-cost generics and therapeutic substitutes."

Legislators' Comments
Senate Finance Committee Chair Chuck Grassley (R-Iowa) said eliminating the doughnut hole would cost more than $400 billion over 10 years. He added, "The Medicare prescription drug program may not be perfect, but beneficiaries now can get affordable prescription drug coverage, and they can choose a plan, including a plan with gap coverage, that best meets their needs." According to the Post, although Democrats have criticized the doughnut hole, "party leaders say they will not be able to get rid of it right away even if they regain control of the House in next week's elections." House Minority Leader Nancy Pelosi (D-Calif.) has said that Democrats would authorize CMS to negotiate prescription drug prices with pharmaceutical companies and use the savings to reduce the doughnut hole. "We can and we must make the Medicare prescription drug plan fairer and more cost-effective," Pelosi said (Washington Post, 11/2).

The report is available online. Note: You will need Adobe Acrobat Reader to view the report.

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