Medicare Compliance & Reimbursement

Industry News:

Medicare Drug Plans Slated for Double-Digit Hikes in 2011

At least seven of the top 10 National plans will charge higher premiums.

Millions of seniors are facing significant hikes in their Medicare prescription premiums next year, making shopping for cheaper coverage a necessity.

New analysis of government data finds that premiums will go up an average of 10 percent among the top plans that have signed up some 70 percent of seniors, according to Avalere Health, a private research firm that crunched the numbers. (http://www.avalerehealth.net)

Seniors will see some of the biggest changes since the Medicare prescription benefit became available in 2006, Avalere confirms. At present, more than 17 million are enrolled in private drug plans that Medicare offers.

"People are just going to have to get on top of this and shop around," said Dan Mendelson, president of Avalere, which does research for industry and government. "Beneficiaries are really going to have to reassess their plans for next year."

"Doughnut Hole" Drug Discount is Silver Lining

On the positive side, benefits will improve with a new 50-percent discount on brand-name drugs for those who land in the program's coverage gap, the dreaded "doughnut hole." It's a major step toward phasing out the gap by 2020, required under the new healthcare law. Seniors don't have to take any action to qualify for the discount.

But Medicare's requirement that insurers winnow down duplicative plans is causing confusion it says on the post on http://www.avalerehealth.net.

Plans Shut Down in Market Clean Up

Avalere says next year more than 3 million seniors will see their plans discontinued. Though Medicare is saying all but 300,000 will be seamlessly switched to another plan offered by the same insurer, Avalere data suggests it may not be that simple.

Medicare "is really reshaping the market," Mendelson said. "There are a lot of plans that are shutting down."

Among them, the second-largest, the AARP MedicareRx Saver plan, with more than 1.5 million members nationally, is being discontinued in 2011, according to Medicare data analyzed by Avalere.

Seniors in the AARP Saver plan are expected to be switched to AARP MedicareRx Preferred, the leading national plan with nearly 2.8 million members. Both are offered by United Healthcare.

Avalere says the switch will raise premiums by close to 15 percent on average for seniors in the Saver plan. They now pay an average of less than $31 a month, and would be paying nearly $35 if they decide to stay in the Preferred plan next year.

And there's another downside: Seniors who are already in the AARP Preferred plan this year and decide to stay will see their premiums fall 11 percent on average. Instead of an average of $39 a month, they'll pay under $35.

It says on the post that when contacted, a spokesman for United Healthcare declined to comment on the analysis.

How The Premium Increases

The highest percentage increase in premiums -- nearly 43 percent -- will be for the First Health Part D Premier Plus plan, offered by Coventry Health Care, the Avalere study found. And average monthly premiums will rise from under $64 to nearly $91.

According to Margaret Nowak, who worked on the study for Avalere, the jump is due partly to Medicare's restructuring and partly to the plan offering better coverage in the doughnut hole, including some brand-name drugs. Only about one-third of plans will offer coverage in the gap next year, mainly for generics.

Another option that will see a significant increase is the Humana Enhanced plan, which offers some coverage in the gap. Premiums will rise by about 8 percent on average, to nearly $45.

"We tried to keep consumers' premiums as close as possible to last year's," said Humana spokesman Tom Noland.

Seven of the top 10 national plans will charge higher premiums next year, the study found.

(Editor's note: Read the enyire Sun Herald article here: http://www.sunherald.com/2010/09/25/2505372/double-digit-hikes-for-some-medicare.html.)