CMS Project Limits Plan Reassignments
For Low-Income People With Medicare

The Centers for Medicare & Medicaid Services (CMS) announced a demonstration project that will limit disruptions in drug coverage, and increase the number of Part D plans available to low-income people with Medicare in 2010. The new project will ensure that a greater number of individuals who receive a Low Income Subsidy (LIS) to help cover their drug costs will have more plan options and will not need to switch plans as a result of rising Part D premiums.

Specifically, low-income people with Medicare in all regions will have a choice of at least four drug plans in 2010. Over the past several years, consumer groups voiced concerns over the dwindling number of zero-premium plans available to low-income people with Medicare. For example, in 2009, Nevada offered only one zero-premium Part D plan and Arizona offered only two.

In addition, an estimated one million people with LIS will be able to keep their current zero-premium plan. In 2009, CMS needed to automatically reassign 1.3 million low-income people with Medicare to plans that qualified for full premium subsidies. CMS expects that there will be only 800,000 low-income people who will be reassigned in 2010—less than half the number that would have had to be reassigned without CMS’s actions.

To offer coverage to LIS individuals, plans must set premiums below an annual benchmark established by CMS. In 2010, CMS will base the low-income premium subsidy benchmark for drug coverage on the average of actual bids submitted by stand-alone drug plans and Medicare Advantage (MA) plans that offer prescription benefits. Unlike in past years, this calculation will no longer include the impact of subsidies to MA plans, which artificially lowered the benchmark. Since the benchmark is higher in 2010, more plans with zero premiums will meet the threshold, thereby giving low-income people with Medicare more plans from which to choose.

-From MEDICARE WATCH, a biweekly electronic newsletter of the Medicare Rights Center, Vol. 12 , No. 17: August 25, 2009.

 

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