Last Chance to Switch Part D Plans for 2009--December 2008

Lauren Green, Associate Editor
Published Online: Thursday, December 11, 2008
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As another open enrollment season for the Medicare Part D prescription drug benefit comes to a close on December 31, senior citizen groups and others are worried about the impact of premium increases and confusing plan descriptions.
The National Senior Citizens Law Center and 11 other advocacy groups have written to the Centers for Medicare & Medicaid Services (CMS) expressing concern over a practice known as reference-based pricing, whereby beneficiaries must pay both a copay and an additional penalty for the difference between the full price of the drug and its generic equivalent for certain drugs on at least 3 Part D plan sponsors’ formularies. Because the actual charge a beneficiary may face for 1 of these penalty drugs is not available on the plan Web sites or in their formularies, beneficiaries will be unable to determine the true out-of-pocket costs associated with a given plan.
The groups are asking CMS to require plans to stop the marketing of plans that include this penalty immediately; they say if plans are allowed to continue with this benefit structure, the Plan Finder and plan Web sites “must clearly and prominently describe the penalty” and “include in plan comparison data the true cost of each drug to the beneficiary.” They also are advocating for a special enrollment period for beneficiaries who enrolled in plans with penalties without adequate advance information.
A recent study of Part D premiums in 2009, conducted by researchers for the Kaiser Family Foundation, found that the average monthly premium will increase by 25% in 2009, and that more than 9 in 10 enrollees face higher premiums in 2009 unless they switch to a lower-premium plan. Nationwide Part D monthly premiums range from $10.30 to $136.80.
House Ways and Means Subcommittee Chairman Pete Stark (D, CA) and House Energy and Commerce Health Subcommittee Chairman Frank Pallone (D, NJ) both have expressed concern over Part D premium increases. “Seniors in the Part D program have seen premium increases 6 times higher than employer-sponsored plans,” noted Rep Stark. “Plans entice seniors with low premiums in the first year, only to jack them up in subsequent years,” he continued.
“As seniors prepare to choose a drug plan for the upcoming year,” noted Rep Pallone, “they should check the fine print.”
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