NCPA - National Center for Policy Analysis

The Big Medicare Switch

August 27, 2010

A plan by Medicare to try to make it simpler for consumers to pick drug coverage could force 3 million seniors to switch plans next year whether they like it or not, says an independent analysis.  That risks undercutting President Barack Obama's promise that people can keep their health plans if they like them.  And it could be an unwelcome surprise for many seniors who hadn't intended to make a change during Medicare's open enrollment season this fall. 

  • The analysis by Avalere Health, a leading private research firm, estimated that more than 3 million beneficiaries will see their prescription plan eliminated as part of a new effort by Medicare to winnow down duplicative coverage and offer consumers more meaningful choices.
  • Seniors would not lose coverage, but they could see changes in their premiums and copayments. 

Medicare officials dismissed the Avalere estimate without offering their own number.  "Anybody who is producing that kind of analysis is simply guessing," says Jonathan Blum, deputy administrator for Medicare. 

But Bonnie Washington, a senior analyst with Avalere, says the company's analysis used Medicare's specifications. 

For example: 

  • Medicare has already notified insurers they will no longer be able to offer more than one "basic" drug plan in any given location.
  • Several major prescription plans, including CVS-Caremark and AARP, offered two basic options throughout the country this year.
  • Eliminating that particular form of duplication among the top plans would force 2.75 million beneficiaries to find new coverage, according to Avalere's estimate. 

When other changes are taken into account, as many as 3.7 million Medicare recipients may have to switch, the analysis concluded.  That amounts to about 20 percent of the 17.5 million enrolled in stand-alone drug plans. 

Source: Ricardo Alonso-Zaldivar, "New Medicare rule means more than 3M seniors may have to switch drug plans next year," Associated Press/Chicago Tribune, August 25, 2010. 

For text:

http://www.chicagotribune.com/business/sns-ap-us-medicare-drug-plans,0,1000698.story  

 

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