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Medicare May Shift 2 Million Drug Plans

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By KEVIN FREKING, The Associated Press

Published: November 4, 2007

WASHINGTON - Nearly 2 million low-income Medicare participants could be switched to different insurance plans for their prescription drug coverage next year.

Millions more will have to shop around if they want to avoid double-digit increases in their monthly premiums.

The reassignment of the poorest beneficiaries and the higher premiums for many others are just two reasons why seniors and the disabled may want to look into other plans as the Medicare drug benefit enters its third year.

The shopping season officially begins Nov. 15 - the first day of an open enrollment period that continues through Dec. 31.
Advocacy groups warn the benefit's 24.5 million participants to take nothing for granted, even if they're happy with their current coverage.

"Everybody needs to shop around every year," said Patricia Nemore, senior policy attorney at the Center for Medicare Advocacy. "Just because you like your plan this year doesn't mean that plan will work the same next year."

Under the drug benefit, Medicare subsidizes insurance plans that cover an enrollee's prescription drug buys. The government pays insurers extra for covering the very poor.

The plans adjust their coverage to reflect the changing marketplace. They change which drugs they will cover for safety and financial reasons. They also make adjustments to the monthly premiums they charge customers, trying to maximize demand for their product and profitability.

On average, Medicare Part D plans will charge a monthly premium of $28 in 2008, but the premiums vary widely in the nearly 1,800 plans across the country. The premiums range from $9.80 for a basic benefit to $107.50 for enhanced coverage.

About a quarter of the poorest beneficiaries don't pay any monthly premium. They still will be entitled to that extra benefit next year, but they will have to get their coverage though other plans meeting Medicare's requirements for offering coverage to low-income beneficiaries.
Medicare officials sent letters this past week to nearly 2 million people to inform them that they will be moved to a new plan.

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