Editorial: CMS’ NEW PART D PLAN REASSIGNMENT POLICY

One of the most persistent problems in Medicare’s Part D prescription drug benefit is the instability in the coverage provided to low-income people with Medicare, most of whom had drug coverage through Medicaid prior to 2006.

In January 2008, for example, 1.19 million low-income people with Medicare were assigned to a new drug plan because the plan they had in 2007 now had a premium that was too high to qualify for a full subsidy under the Extra Help program. The Centers for Medicare & Medicaid Services (CMS) picked the new plan at random—without checking whether it covered the drugs taken by the enrollee—from among the plans with premiums low enough to qualify for zero-premium coverage. As a result, many of those switched found their medicines were not covered when they went to the pharmacy this winter.

The consequence of these denials is often confusion and panic. People think their drug coverage is no longer working. They stop taking their heart or diabetes medicines, or they scrape together the money to pay for it themselves—for a while. For people who already have a hard time choosing among the bewildering array of Part D plans, the appeals system is not a realistic option, even in those rare cases when they learn of their appeal rights. Advocates, like those at the Medicare Rights Center, can help, but most people never see an advocate.

Recognizing the disruptions to care caused by these annual reassignments, CMS this week announced that it would calculate the premium subsidy with a new formula that raises the maximum subsidy and minimizes the number of Part D enrollees who will face reassignment.

But CMS noted that, if the new policy were in effect last year slightly more people would have been reassigned than were reshuffled under the current policy.

How is that an improvement?

It’s not. But to explain why CMS adopted this approach properly requires a highly technical explanation.

The short answer is: instability is built in to the privatized structure of the Part D benefit. Plans lowball premiums to capture market share and to qualify for a full premium subsidy and then raise their rates in subsequent years or restrict drug coverage to keep costs low.

What all people with Medicare need is a stable, Medicare-administered alternative to the private drug plans offered by insurance companies.

-Adapted from: “A Better Option”, Asclepios Your Weekly Medicare Consumer Advocacy Update, April 3, 2008 • Volume 8, Issue 14, Medicare Rights Center

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