Washington Choices, choices. That's what senior citizens and the disabled will face in the coming months as they select a private plan to cover a portion of their prescription drug costs under Medicare.
The Bush administration announced Friday that nine insurers have been approved nationwide to provide prescription drug coverage through the new Medicare benefit that kicks in Jan. 1.
In addition, several other companies have been approved to provide coverage on a regional basis. As a result, beneficiaries will have at least 11 prescription drug plans to choose from, and in larger states, such as New York and Texas, beneficiaries can choose from among 20 plans.
The options are even greater when considering that beneficiaries also could opt to get their drug coverage through Medicare Advantage Plans, which operate like a health maintenance organization, and offer more comprehensive coverage than just a drug benefit.
Federal officials said the array of options is good news for beneficiaries.
"The competition between these organizations has resulted in lower costs than expected," said Dr. Mark McClellan, administrator for the Centers for Medicare and Medicaid Services. "Forty-nine states will have a drug plan with a premium below $20."
There is no single Medicare drug plan. Instead, private insurers will offer an array of coverage options. Customers will pay some of the costs through premiums and co-pays. The government also subsidizes some of the costs. The tab for the federal government for the program's first 10 years is now estimated at $720 billion.
"It's really clear the drug benefit has attracted many, many businesses from throughout the country," said Tricia Neuman, vice president of the Kaiser Family Foundation, which conducts health care research. "What's less clear and really important is what they're offering and how seniors will respond to the opportunity to enroll."
The program was designed to help most Medicare recipients save money. However, each person's situation will vary, depending on factors, such as health and drug usage.
Companies can begin marketing their plans on Oct. 1. Enrollment begins Nov. 15.
McClellan said that his agency would try, beginning in mid-October, to help Medicare beneficiaries select the plan that best fits their needs.
Medicare provides health benefits to nearly 42 million elderly and disabled Americans. The new drug benefit is voluntary.
In the wake of Katrina and the hundreds of billions of dollars it will take to help residents of the Gulf Coast recover, some lawmakers have called for delaying enactment of the new benefit.
McClellan rejected that argument.
"They have waited too long for coverage that is up to date," he said. "They have waited too long for coverage that can help them stay well and help keep their costs down, and help keep Medicare's costs down, so this benefit is going forward nationwide."
Some lawmakers on Capitol Hill are concerned that senior citizens will be faced with too many options for prescription drug coverage. They support legislation that would delay penalties for late enrollment by giving beneficiaries until Dec. 31, 2006, to select a plan. They also want to give seniors the right to switch providers one time at any point in 2006.
"Seniors and people with disabilities will be extremely confused as they try to figure out their options with regard to private Medicare drug plans," said Rep. Pete Stark, D-Calif. "If the administration and Republicans in Congress want this law to work for beneficiaries, they'll join us to quickly enact these sensible consumer protections."
McClellan said the administration realizes that the new benefit can be confusing. It is developing a Web site and telephone bank that will help people determine the plans that best fit their needs. Some people will want basic coverage at the minimum price, but others will be willing to pay more for a more comprehensive benefit, and CMS will help them find the one that benefits them the most, he said.
The companies approved to offer stand-alone drug coverage nationwide are: Aetna Life Insurance Company, Connecticut General Life Insurance Company, Medco, Memberhealth Inc., Pacificare Life and Health Insurance Company, Silverscript Insurance Company, Unicare, UnitedHealth Group Inc., and Wellcare Health Plans.