Wednesday, September 29, 2010

Medigap Plans Improving

WASHINGTON – Seniors with high drug costs will soon have more options to help them cope with Medicare's prescription coveragegap.

Reversing a steady decline, the number of prescription plans covering at least some brand-name drugs in the "doughnut hole" coverage gap will triple next year, from 35 to 106. That's according to an analysis of Medicare data to be released Wednesday by Avalere Health, a private research firm.

At least two plans covering some brand-name drugs in the gap will be available in every region of the country.

The enhanced coverage carries a higher monthly premium. And the plans offer only a limited range of medications in the gap, most often drugs to treat chronic illnesses.

Nonetheless, some seniors may be willing to pay more for greater peace of mind. Some of the most widely used medications, including Lipitor for high cholesterol, are not available as generics.

"The coverage of generics in the gap has been fairly stable, but there has been very little coverage of brand-name drugs," said Bonnie Washington, an Avalere researcher who worked on the study. "This is the first year we have really seen it come back."

The coverage expansion is partly the result of prodding by Medicare officials to get private insurers to offer more robust plans, Washington said.

Medicare's drug coverage gap is a cost-control idea that has never been popular.

In 2011, the gap will start after Medicare beneficiaries and their insurance plan have spent $2,840 on medications.

After that, seniors are responsible for roughly the next $3,600. That's the "doughnut hole."

Once total spending reaches about $6,440, Medicare's catastrophic coverage kicks in and beneficiaries pay only a small amount.

President Barack Obama's new health care law closes the gap by 2020 through a series of discounts. Next year, seniors get 50 percent off brand-name drugs in the gap and a smaller break on generics.

But Medicare will continue to count the full retail price of medications in computing the coverage gap. So that means seniors will pay a lot less to get through the doughnut hole.

About 4 million people now face the gap largely on their own.

The Avalere study also found benefits will improve for low-income people whose premiums and co-payments are covered by taxpayers. For the first time since the drug benefit was offered in 2006, 9 million low-income beneficiaries will have a bigger number of plans to pick from. For those who want to stick with their current plan, coverage will be more stable.

Medicare's open enrollment begins Nov. 15 and consumer advocates say the more than 17 million seniors enrolled in private prescription plans should take a particularly close look at their benefits for next year. Millions face double-digit premium hikes unless they shop for a cheaper plan.

Premiums will go up an average of 10 percent among the top plans that have signed up some 70 percent of seniors, according to an earlier Avalere analysis.



Avalere Health:

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