Seniors in Medicare Part D on cost rollercoaster

Seniors in Medicare Part D on Cost Rollercoaster; Over Quarter of Sampled Plans Hike Drug Costs 5% or More

Consumers Union also finds nearly every sampled Medicare plan increased drug costs from January to February after seniors ‘locked-in’

(Washington, D.C.) – A new report from Consumers Union finds that it may be difficult – if not impossible – for Medicare beneficiaries to have confidence that their private Part D insurance plan will not change or increase prescription drug costs for the year they are locked into the plan.
Consumers Union found that 28 percent of the private insurance plans it tracked in five zip codes across the country increased their costs for a group of selected drugs by 5 percent or more in 2006. Some cost increases were dramatic – one Florida plan increased its costs for the selected drugs by nearly one-third, or $795, for the year.
Beneficiaries also might be in for a shock in 2007. During the one-month period from January to February 2007 – right after beneficiaries locked into a plan for the calendar year – 95 percent of the sampled plans increased their costs by some degree for the package of five widely used prescription drugs. Of those, 21 percent hiked costs by
5 percent or more in that one-month period.
“Seniors likely expected their Medicare drug insurance plan would have predictable costs, but our sample shows some dramatic increases,” said Bill Vaughan, senior policy analyst for Consumers Union, publisher of Consumer Reports. “What’s most disappointing is we found costs going up just one month after beneficiaries locked into a plan for 2007.”
“The whole point of having Medicare drug insurance is to protect against the unexpected, and we’re finding a lot of unexpected cost increases,” Vaughan added. “Each time drug costs go up under these plans, seniors are pushed that much closer to the brink of the doughnut hole coverage gap.”
Vaughan said the cost increases underscore the need for Congress to require drug price negotiation to get the best deal for seniors, as well as offer a consistently priced, Medicare-administered drug plan in addition to the private plans.
“Seniors and taxpayers deserve a Medicare drug insurance plan that has the best possible prices, and is consistent throughout the year,” Vaughan said.
For a copy of the full report, click here.
Since December 2005, Consumers Union has used the Web site to track plan costs for five widely used drugs offered by Part D insurance plans in five zip codes in New York, Florida, Texas, Illinois and California. The monitoring has found dramatic fluctuations in plans throughout the year.
More than three-fourths (78 percent) of the plans changed their costs for the selected drugs three or more times during 2006. Thirty percent of the plans changed their costs at least six out of the 12 months. For the one-month period of January to February 2007, only three of the surveyed plans listed the same cost.
Costs for some plans also jumped around wildly on the site. For example, in November 2006, the SilverScript Plus plan offered in California was priced at $2,859 annually for the sampled drugs. On Jan. 5, 2007, the same plan was listed at $5,418. Five days later, on Jan. 10, the price changed again, to $3,313.
CU supports a price-negotiated, Medicare-administered drug plan that will offer stable, consistent drug costs and coverage to seniors. In the meantime, Consumers Union is urging CMS to warn consumers that some plans increase prices significantly during the year, and said the agency should make public the names of plans that frequently change the cost of commonly used drugs.
Beneficiaries who select a plan based on the Web site information, and have proof of that listing, also should be able to change plans anytime during the following year when the plan has increased drug costs by more than 5 percent.
Since many beneficiaries likely do not review the cost details of their plan during the Open Enrollment season, plans which increase the cost of drugs by more than 5 percent from one year to the next should be required to notify enrollees who are taking those specific drugs.
“The Medicare drug cost information has to be accurate, timely and consistent so consumers can make informed decisions when picking a plan,” Vaughan said. “Once seniors pick a plan they are locked in for a year, so the information they base their decision on better be accurate.”