$$ wasted on random Medicare Part D assigning

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Wednesday, July 25, 2007

Medicare Should Stop Randomly Assigning Low-Income Seniors to Costly Drug Plans with Poor Coverage, CU Says

Random assignment wastes millions; ‘smart selection’ improves benefits for poor

(Washington, DC) – Medicare’s practice of randomly assigning low-income beneficiaries to expensive Part D prescription drug plans is wasting millions in taxpayer dollars, says Consumers Union, which supports efforts being considered today in a House committee to intelligently place seniors in low-cost, comprehensive plans that meet their needs.
“Medicare randomly assigns 6 million low-income Americans to prescription drug insurance plans without checking to make sure those plans are the best value, or if they even cover the most commonly used drugs,” said Bill Vaughan, senior policy analyst with Consumers Union, publisher of Consumer Reports.
“If Medicare expects seniors to shop around for the best prescription drug plans, why can’t it do the same for low-income beneficiaries, many of whom are severely ill or disabled?” Vaughan added.
The House Energy and Commerce Committee Wednesday is considering a measure in the State Children’s Health Insurance Plan reauthorization bill to replace random assignment of low-income Part D beneficiaries with ‘intelligent’ assignment to plans that cover needed drugs and are lower-cost.
A sampling of eight zip codes this week by Consumers Union found that about one-fourth of drug plans eligible to be automatically assigned low-income beneficiaries failed to cover a package of six commonly used drugs by seniors. Also, the sample found that each zip code’s most expensive random enrollment plan required a co-pay of $2,800 a year – a daunting amount for a low-income senior or person with disabilities.
Costs also varied in the sample. On average, there was a $346 difference between the most expensive and least expensive annual cost for the package of six commonly used drugs among the random-assignment plans. (Actonel for osteoporosis, Aricept for mild dementia, Celebrex for arthritis, furosesmide for hypertension, Lexapro for depression, and Lipitor for high cholesterol).
“With common-sense assignment of low-income folks to inexpensive, comprehensive drug plans, taxpayers, Medicare and its most vulnerable beneficiaries will benefit,” Vaughan said.
Under the House proposal, if a low-income individual did not voluntarily choose their own plan, they would be assigned to a plan that covers the most commonly prescribed drugs and the six classes of drugs deemed sensitive by CMS (such as HIV and mental health); has an above average pharmacy network; scores high in CMS quality indicators; and is among the lowest-cost plans offering the package of commonly prescribed drugs.
Consumers Union has been monitoring monthly price changes in the Medicare Part D Prescription Drug Plans since December 2005 in five major states for five commonly used prescription drugs. As part of that work, research found that many Medicare low-income subsidy beneficiaries are being assigned (1) to plans which cost the taxpayer millions more than lower-cost comparable plans, and (2) to plans with serious deficiencies in their drug coverage.
“It defies common sense to believe that a low-income senior who is scraping by can afford nearly $3,000 in co-payments for their needed prescription drugs,” Vaughan said. “The current system is simply hurting the low-income and the taxpayer.”
Contact: Bill Vaughan, 202-462-6262
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