More Medicare Confusion in 2007?

Average premiums for Medicare’s prescription drug insurance program for seniors will remain roughly the same next year. However, in some states, seniors will face an even bigger array of plans than this year, the government said Friday.

While private insurers already offering the Medicare “Part D” prescription benefit are expected to offer fewer plan choices in 2007, the number of companies has increased from 9 to 17, Bush administration health officials said.

Therefore, seniors switching or joining plans in many states will still face a wider range of plans than last year. Critics have consistently called the wide range of plan choices confusing for seniors.

Perhaps better news is that average monthly premiums are expected to be $24 next year, about the same as beneficiaries are now paying.

However, plan premiums and deductibles vary widely based on the amount of coverage seniors choose.

Premiums for the lowest-cost plans in seven Midwestern states will go up more than five-fold, according to consumer group Families USA.

Few Expected to Switch Plans

Approximately 250,000 Americans are expected to become eligible for Medicare for the first time in 2007. And seniors already enrolled in Part D will be able to switch plans beginning Nov. 15.

“Seniors who are satisfied with their current coverage will not have to take any action,” said Health and Human Services Secretary Michael Leavitt. “We expect most of them will not want to change.”

But those who do – as well as those signing up for Medicare in 2007 -- may face a complicated decision. In North Carolina, for example, the number of plans will go from 38 this year to 51 next year.

Florida beneficiaries will choose from 58 plans with premiums ranging from $10.20 to $83.70 per month.

“The incredible confusion that persisted in the past year about the Medicare drug program is about to get worse. There will be more plans to choose from -- and those plans will continue to be different from one another,” Ron Pollack, executive director of Families USA, said in a statement.

Medicare’s basic plan pays 75 percent of seniors’ drug costs up to $2,250 after a $265 deductible. Coverage then stops completely until drug costs reach $5,100, after which Medicare pays 95 percent of all costs.

But out-of-pocket costs, coverage limits, and the range of covered drugs vary between plans.

The nation’s lowest premium for a basic plan will be $9.50, charged by the Health Insurance Company of New York for a plan with a $265 deductible, according to Medicare officials.

Outgoing Medicare Administrator Mark McClellan, MD, said some low-income seniors will be forced to switch plans in order to stay in a subsidized plan with low out-of-pocket costs. He said the change should affect less than 5 percent of low-income beneficiaries.

“We are notifying these beneficiaries early,” McClellan said.

By Todd Zwillich, reviewed by Louise Chang, MD

SOURCES: Centers for Medicare & Medicaid Services: “2007 Drug Plan Options.” Michael Leavitt, secretary, Department of Health and Human Services. Mark McClellan, MD, administrator, Centers for Medicare & Medicaid Services. Ron Pollack, executive director, Families USA.