Signaling the start of a race among private insurers to sign up millions of older Americans, federal officials announced yesterday which companies had been approved to offer new Medicare drug coverage.
The announcement is the first round of what promises to be a large-scale campaign to get older Americans to sign up for the voluntary plans, which begin Jan. 1. Mailings will begin next month, with enrollment opening in November.
In Maryland, seniors will have a choice of 18 private prescription plans next year, a range of options comparable to those in most other states, federal officials said. There will also be four Medicare managed-care plans. Details -- including how much they will cost and just what benefits will be provided -- will be rolled out over the next few weeks.
The array of choices will result in "our beneficiaries having the power to choose a plan that works for them," Dr. Mark McClellan, administrator of the federal Centers for Medicare and Medicaid Services (CMS), said yesterday. And, he said, the vigorous competition among plans was keeping premiums down and resulting in richer benefit offerings.
The average premium for the drug plans, $32 a month, is about 15 percent below what had been predicted, McClellan said, and some plans are including benefits beyond the minimum level required by Medicare.
But Robert Hayes, president of the New York-based Medicare Rights Center, said the maze of choices would be too bewildering for many of the elderly.
"The number and complexity of these plans are paralyzing for people on Medicare," Hayes said.
Consequently, he said, groups like his would "try to hook up a gazillion volunteers with a gazillion people who need help and train the volunteers to be Internet-savvy."
McClellan said his agency would offer round-the-clock help at 1-800-MEDICARE, and would have a variety of Web-based information tools running by next month, when the details of the plans are known.
Hayes said it was important to offer "education and counseling by neutral parties" as an alternative to aggressive marketing by the insurers, who he said were anxious to lock in market share by signing up people in the first year of the new benefit. "It will be one of the fiercest competitive markets we've seen in a long time," he said.
Local offices on aging and other advocacy groups have been gearing up as well.
"We're all doing everything that we can to make sure as many beneficiaries as possible know about this benefit," said Kelly Coates-Carter, a spokeswoman for AARP Maryland. Her group, she said, would be holding meetings, often in conjunction with local government counselors, in churches, schools and senior centers "from Cambridge to Hagerstown." She said AARP also plans advertising, brochures and "feet on the street" to deliver fliers.
While seniors can't choose plans until more details are available, she said, they can now begin to review their current coverage, make a list of prescriptions they take regularly and talk with their doctor about likely future needs.
Medicare, which has covered hospital and doctor bills since it was created 40 years ago, has not previously paid for prescription drugs. Congress chose, in the 2003 Medicare Modernization Act, to offer the new benefit through private insurers. Seniors who want the coverage can choose one of the plans and will generally pay a monthly premium.
Some plans will have premiums under $20 a month, McClellan said yesterday. Those with richer benefits will charge more.
Each plan also has a different list of medications that it will cover, although Medicare rules require at least two offerings in each major category of drugs, such as two blood pressure medicines and two anti-depressants.
Each will also have a different network of participating pharmacies, although McClellan said CMS had made sure that each network was adequate before approving the plan.
Eric Cormier, general manager for Medicare for Aetna's Mid-Atlantic region, said his company, and many other insurers, would offer three levels of prescription coverage, letting consumers choose among different trade-offs among premiums and out-of-pocket costs.
PacifiCare Health Systems Inc., a California insurer that will sell Medicare drug coverage in all 50 states, said it would be offering plans with premiums as low as $19.02 a month and as high as $54.51, depending on benefits and the region of the country.
Low-income seniors qualify for what CMS calls "extra help." They won't have to pay premiums and won't face a deductible.
Hayes, of the Medicare Rights Center, said low-income seniors and those with lots of disposable income would do well to sign up for one of the drug plans. The toughest choices, he said, will be for seniors with incomes of about $14,000 to $28,000, who will have to balance the monthly premiums against expected prescription needs.
Despite early fears that the new benefit might prompt the loss of retiree benefits, McClellan said, most employer and union retiree prescription plans won't be changing; the federal government will subsidize those retiree plans as long as the coverage is at least as good as the new Medicare benefit.
Seniors can also get prescription coverage as part of Medicare Advantage plans -- full managed-care health insurance. Medicare Advantage plans have been around for years under a variety of names, but are expanding as the new Medicare law increased their reimbursements.
Those plans limit the choice of doctors and hospitals, but as a trade-off can offer additional benefits. For example, David Weinstein, president of Elder Health Mid-Atlantic Inc., a Baltimore-based Medicare HMO, said his plan offers transportation to medical appointments as a benefit option.
Some Medicare Advantage plans, including Aetna and Elder Health in Maryland, offer a no-premium option, but also offer more benefits for additional monthly costs.
Marsha Gold, a senior fellow at Mathematica Policy Research who studies Medicaid managed care plans, said that Maryland had a number of such plans in the 1990s, but many shut down when Medicare lowered many reimbursement levels, and that may make consumers wary.
"In Baltimore and Maryland, where there have been drop-outs [by plans], people will be skittish," she said. "But these plans will be attractive to people worried about out-of-pocket costs."
Insurance informationTerms of coverage
Below are the terms of coverage under the basic private Medicare drug insurance plan. Various plans will offer other options, at various premiums, such as no deductible or coverage of the so-called doughnut hole.
Insurers offering free-standing Medicare drug plans in Maryland - pharmacy coverage separate from any other health insurance.
These are the Medicare Advantage plans available in Maryland. All offer coverage for their network of physicians and hospitals, plus prescription benefits.