MEDICARE DRUG PLANS HIKE PRICES AFTER CONSUMERS ARE LOCKED-IN

With Medicare’s open enrollment period opening on Nov. 15, senior citizens reconsidering their Medicare drug program choice should consider which companies tend to raise the prices on drugs after you enroll. Consumers Union’s latest sampling of Medicare prescription drug plans for 2007 again finds that most insurers hike the cost of their drugs during the year – in one extreme case by 28 percent.

The data calls for major changes in the law to protect seniors against bait and switch-type practices as the open enrollment season approaches, according to the publisher of Consumer Reports. “It makes no sense to ask a senior to carefully shop around in October and sign up for a drug plan, when the plan just turns around a few months later and dramatically hikes the cost of the medicines,” said Bill Vaughan, senior health policy analyst for Consumers Union. “Medicare expects seniors to lock into a drug plan for 12 months, but it doesn’t require the drug plan to lock in their prices for that same time. How is that logical?” Vaughan added.

Since December 2005, Consumers Union has used the Medicare.gov Web site to track Medicare Part D plan costs for five widely used drugs offered by companies in five zip codes in New York, Florida, Texas, Illinois and California. The tracking has found that most drug plans consistently hike costs during the year seniors are locked into a plan. The latest period tracked – from February to September 2007 – found that 95 percent of the plans offered in the sampled areas raised their drug costs. A quarter of the plans raised prices by 5 percent or more, with a $140 average state increase during the seven-month period. Only 15 of the 289 plans in the sampled areas lowered their prices. In the New York area, the Rx 1 drug plan dropped from being the third-lowest cost plan sampled in February 2007, to the 14th lowest-cost in September. In Texas, Blue Medicare Rx Standard went from the lowest-cost plan in February, to the eighth-lowest cost in September.

Vaughan also said the cost increases in Part D plans 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.

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 by significant amounts. CU also has asked Medicare to allow beneficiaries who select a plan based on the Web site information, and have proof of that listing, be allowed to change plans anytime during the following year when the plan has increased drug costs by more than 5 percent.

-Adapted from: http://www.seniorjournal.com/NEWS/MedicareDrugCards/2007/7-10-02-SenCitShouldCheck.htm sited in ElderLaw News from ElderLawAnswers October 2007, e-mail 10/16/07.

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