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Health Care Reform:

Health Insurance & Affordable Care Act

Three Key Changes Proposed For Medicare Part D


--Limits in Number of Plans Offered: CMS is proposing to allow insurers to offer no more than two prescription drug plans – one basic plan and one enhanced – in the same service area. The health law’s ongoing closing of the Part D “doughnut hole,” the gap in coverage where seniors pay the full cost of coverage before the plan’s catastrophic cap kicks in, “has reduced the need for plans offering enhanced benefits,” according to CMS. The agency says that each region of the country now has nearly three dozen plans and reducing that would help give beneficiaries more clarity about the differences among plans.

Critics counter that having more plans on the market boosts competition, increases plan innovation and keeps prices low. An analysis from Avalere Health found that the proposal would require that 39 percent of all enhanced plans be eliminated by 2016. “Interfering in a well-functioning market system simply to reduce choices – not to eliminate poor choices, is not good policy,” Douglas Holtz-Eakin, president of the conservative American Action Forum, told the congressional panel. Holtz-Eakin was head of the Congressional Budget Office when Congress passed the drug benefit in 2003.

Some seniors’ groups hailed the proposal, saying the current number of choices often stops them from considering their options to find a better deal each year. Separately, a Kaiser Family Foundation study found that from 2006 through 2010 only 13 percent of beneficiaries switched drug plans during each annual enrollment period despite changes in premiums, cost sharing and coverage. (KHN is an editorially independent program of the foundation).

--Expansion of Preferred Pharmacy Networks: The government is proposing to give all pharmacies the ability to be in a health plan’s “preferred pharmacy network” if they agree to offer beneficiaries the same price that is available through pharmacies that have negotiated preferred cost sharing with the insurer.

Critics of the plan say the change will lead to higher prices because Part D plans won’t be able to get the same price concessions from drug makers and pharmacies, and that CMS has no power under the drug law to demand such a change. But community pharmacists, and lawmakers in both parties representing rural districts, are praising the CMS proposal, saying it will offer seniors more convenience.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

Fri, Feb 28 2014

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