Medicare’s low-income Rx plans cut to 2 in Arizona
by The Arizona Republic on Oct. 14, 2008, under Body, Family, LocalPrescription drug options will be dramatically reduced for thousands of elderly Arizonans next year as Medicare scales back the number of plans available to low-income seniors.
Medicare said two private drug plans will qualify next year for its program. That is down from the seven plans now available to more than 150,000 eligible Arizonans.
The change means thousands of low-income seniors can expect new plans that may include a different mix of prescription drugs and benefits.
The reduced choice is a result of insurance companies either opting out of providing Medicare coverage because it is not profitable enough, or submitting a bid that was rejected by the program.
The two available plans for 2009 are United Healthcare’s SierraRx Basic and Health Net’s Orange Option 1. The five eliminated from Medicare’s roster of Arizona drug plans next year are Humana’s PDP Standard, Sierra Rx, WellCare Classic and two UniCare plans.
Arizona seniors using the canceled drug plans will be automatically enrolled in either of the two remaining plans. They also have the option of enrolling in the more comprehensive Medicare Advantage plans, but they would have to pay for those. Analysts said many seniors living on fixed incomes may not be able to afford the premiums.
The lack of choice worries seniors, who fear that a limited selection of prescription drugs offered within the two available plans may not cover all their medications.
Advocates said recipients should closely check out what the plans offer to ensure they meet their prescription requirements. Enrollment for next year begins Nov. 15.
Anybody who moves to a new plan will have a 90-day transition period that allows them to get prescriptions from their old plans. Medicare also offers an appeals process for recipients to show they must have a certain drug for a medical condition.
Health Net and United Healthcare expect to mail out details of their drug plans, or formularies, to new and existing members over the coming weeks.
Health Net members will see co-payment increases of 5 to 40 cents.
Health Net spokeswoman Lori Rieger said members should find the right drug for their health condition, but neither drug plan could immediately say which drugs will be added or eliminated.
The plan changes stem from private insurance companies opting out of Medicare’s low-income drug plans or failing to meet Medicare’s financial thresholds of providing coverage for $16.22 per member per month. Some companies have found that serving the niche of low-income seniors is not profitable enough.
David Sayen, Medicare’s regional administrator in San Francisco, said the federal agency evaluated all drug plans based on a weighted average of all bids. Medicare accepted the plans that came in under the state’s average premium plan of $16.22 per month. Higher bids were rejected.
The average bids vary from state to state.
Arizona’s low-income seniors have fewer drug plan choices than every other state except Nevada, which will have one drug plan for low-income seniors next year, according to an analysis by Washington, D.C.-based consultant Avalere Health.
“We have seen this trend happen nationwide, but it is particularly acute in Arizona and Nevada,” said Bonnie Washington, vice president of Avalere Health.
Some insurers, such as Humana, opted to leave the business of low-income drug plans altogether, Washington said.
The insurer said it expected to lose all of its 308,000 drug plan members because its bid was not accepted by Medicare.
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Drug-subsidy cuts
Just two drug plans will be fully subsidized for low-income Arizona seniors next year, down from seven this year.
2008 plans
• Health Net Orange Option 1
• Humana PDP Standard
• Sierra Rx
• Sierra Rx Basic
• Medicare Rx Rewards Value
• Medicare Rx Rewards Standard
• WellCare Classic
2009 Plans
• Health Net Orange Option 1
• SierraRx Basic
