Average Monthly Premiums Will Increase By 87% In 2007 For Medicare Prescription
Drug Plans Providing 'Meaningful Coverage' In Doughnut Hole, Familie
06 Nov 2006
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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Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free
service of The Henry J. Kaiser Family Foundation . © 2005 Advisory Board Company
and Kaiser Family Foundation. All rights reserved.
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