Medicare to offer more options

WASHINGTON — Medicare beneficiaries will have access to more options for prescription-drug coverage in 2007, with many insurers offering better value and a larger number of medications, the Bush administration said Friday. But the potential for confusion also may increase along with the choices.

The administration said beneficiaries satisfied with their current drug coverage would not have to do anything when the six-week open enrollment begins Nov. 15. Consumer advocates, however, said beneficiaries should carefully review the options because prices have changed, often by significant amounts.

Insurers can begin marketing their 2007 options today.

Many experts had predicted a shakeout in the market for drug coverage, which is offered through dozens of private insurers subsidized by the government. But it did not occur.

In most states, Medicare beneficiaries had a choice of slightly more than 40 free-standing drug plans this year. In 2007, every state but Alaska and Hawaii will have more than 50 drug plans, and 23 states will have 55 or more.

The number of national drug plans offering coverage in every state will rise to 17 next year, from nine this year.

To support the assertion that drug plans will offer better value, Medicare officials said the average premium for drug coverage next year would be $24 a month. That is the same as this year and 40 percent less than first estimated for 2007.

Information

Medicare Web site:

www.medicare.gov

Statewide Health Insurance Benefits Advisors : 800-562-6900

Medicare administration:

800-MEDICARE (800-633-4227)

But, the officials said, the average number of drugs covered by insurers would increase by 13 percent, to 4,390 next year.

Monthly premiums in 2007 will range from a low of $9.50, under a drug plan offered by the HIP Insurance Company of New York, to a high of more than $110 under plans offered by Sierra Health Services in New Jersey and some other states.

Francis Olsen, senior vice president of HIP Insurance in New York, said his company was charging $40.70 a month for "virtually the same coverage" that would cost $9.50 a month next year. Clearly, he said, "it will be a better bargain for beneficiaries."

Humana has the lowest premium this year: $1.87 a month in a seven-state region that includes Iowa, Minnesota and North and South Dakota.

The number of drug plans available in 2006 and 2007 far exceeds what members of Congress expected when they created the program three years ago.

The existence of so many plans provides some evidence to support the theory that the federal government can stimulate fierce competition among private insurers — regulated and subsidized by the government — to help control health costs for beneficiaries and taxpayers.

"As a result of robust competition and smart choices by seniors, plans are adding drugs, removing options that were not popular, and providing more options with enhanced coverage," said Dr. Mark McClellan, administrator of the Centers for Medicare and Medicaid Services.

Congress defined a standard benefit, which includes a significant gap in coverage, also known as a doughnut hole. Medicare officials encouraged insurers to help close the gap in 2007, and many companies responded.

For premiums ranging typically from $40 to $50 a month, beneficiaries can enroll in plans that provide extra benefits, including coverage in the gap for generic and sometimes for brand-name drugs.