Bush seeks ways to simplify prescription drug program
1 solution may be to cut number of insurance plans
WASHINGTON -- The Bush administration is looking at ways to simplify the new Medicare prescription drug benefit, but initial proposals are unlikely to win over the program's critics.
In a 39-page draft memorandum to insurers, employers, and others administering the drug benefit, the Centers for Medicare and Medicaid Services asked for advice on how to simplify the program in 2007.
The agency proposed limiting to two the number of drug plans a company can offer per region. Many insurers now offer three, and since there are often more than a dozen insurers per region, consumers often have more than 40 choices. The agency also said it expects that an insurer's two plans must have meaningful differences to make comparisons easier.
The recommendations appear to be a direct response to concerns that some older and disabled people are confused by the vast array of options.
Ron Pollack, executive director of the activist group Families USA, said the plans can't generate enough enrollment to generate bargaining clout with drug manufacturers. Slightly reducing the number of plans won't change that outcome, he said, nor will it make the program easier to understand. ''When you have such a huge number of companies providing this coverage and no effort to standardize benefits it creates chaos," Pollack said.
The administration said competition from insurers is lowering the cost of the program. In early February, it said premiums will average about $25 a month, as opposed to the $37 projected when the program was approved. It now estimates the program will cost about $678 billion over 10 years rather than about $730 billion estimated originally.
A spokesman for the Medicare-Medicaid agency, Gary Karr, said the draft memorandum should not be viewed as a sign the administration is backing away from the view that all the choices are a good thing for the elderly and disabled.
About 42 million people are eligible to enroll in a private plan that is designed to subsidize some of their prescription drug expenses. Most of the larger insurers give beneficiaries more than one option.
The range of plans available vary by region. In Alaska, there are 11 insurers offering 27 drug plans. In Pennsylvania, there are 23 insurers offering 52 plans.
Some governors, meanwhile, are saying the drug benefit could erode states' finances if the Bush administration delays reimbursing states for stepping in during the program's troubled start.
The federal pledge is one of the main issues governors plan to raise with the president at a White House meeting tomorrow.
Under the new program, the federal government is relieving states of the cost of buying medicine for poor elderly people. In exchange, states will make monthly payments to Washington to help cover the cost of the benefit.
Many states were upset they had to make this payment at all; some are suing to stop it. On top of that expense, states have bought medicine for hundreds of thousands of poor people who were not enrolled correctly when the program began Jan. 1. These people might have gone without their drugs without the states' help.
The federal government cannot have it both ways, asking states to make their regular payment and cover the early glitches, said Maine Governor John Baldacci, a Democrat. So far, Maine has paid for 115,000 prescriptions that were supposed to be covered through the program.
''We've put out $5.9 million, and for a small state like Maine, that's a lot," Baldacci said in an interview while attending the National Governors Association's winter meeting. ''We can't be expected to pay back what we haven't saved. So we want partnerships developed. We're all tied in this together."