For some seniors with Medicare, drug bills will dropThe federal health care overhaul passed last spring will begin to erase the "doughnut hole" gap in Medicare coverage that has required beneficiaries to shoulder sizable costs.
By: Warren Wolfe, Star Tribune (Minneapolis) / (MCT)
Out-of-pocket prescription drug costs will drop sharply next year for thousands of Minnesotans who carry Medicare drug insurance -- especially those with the highest expenses.
That's because the federal health care overhaul passed last spring will begin to erase the "doughnut hole" gap in Medicare coverage that has required beneficiaries to shoulder sizable costs.
Most affected will be the 125,000 or so Minnesotans with the highest drug expenses -- about a quarter of the 510,000 beneficiaries with Medicare Part D -- who traditionally hit that $3,610 gap in coverage and begin paying the full cost for drugs.
Starting next year, a federal subsidy will allow those who hit the gap to pay 50 percent of the cost of medications, for brand-name drugs covered by their policy, and 93 percent of the cost for the much cheaper generic drugs. This year, those who hit the gap simply received checks for $250. The new federal law aims to eliminate the doughnut hole by 2020, leaving beneficiaries to pay about 25 percent of overall costs.
"For some people, the change will represent a significant savings," said Jean Wood, executive director of the Minnesota Board on Aging. Her agency operates the Minnesota Senior LinkAge Line -- 1-800-333-2433 -- to help Minnesotans figure out which drug plans offer the best coverage.
Under the 2011 changes, for instance, a Minnesotan buying six commonly prescribed drugs will pay $2,145 under the cheapest plan for those drugs, First Health Premier. That's down from $2,973 this year, a 28 percent savings.
(The six are generics lisinopril, metformin and furosemide, and brand-name drugs Lipitor, Lexapro and Nexium.)
But costs vary widely among the 72 competing plans available next year to Minnesotans. For those six drugs, the most expensive plan in 2011, EnvisionRxPlus Gold, will cost $4,562, primarily because it charges full price for two of the three brand-name drugs.
Advocates say that during open enrollment, which starts Nov. 15, all beneficiaries should compare their 2011 coverage with that of competitors. That's because most plans will change their mix of premiums, deductibles and formularies of covered drugs.
But at least 44,000 Minnesotans will have to find new plans next year because their old ones are ending, Medicare officials estimate. Advocates say those policyholders should pay close attention because their insurance companies will recommend other plans that may not fit their needs. Those beneficiaries should have been notified of the proposed change by Oct. 31.
The only way to compare all the plans is to use Medicare's online tool at www.medicare.gov. That is the tool used by the LinkAge Line and Medicare staff when callers seek help.
Changes for 2011
Since the Part D program began in 2006, Medicare has approved three types of plans. Next year there will be 72 plans, down from 89 this year.
Prescriptions only: There will be 33 plans covering drugs only, down from 46 this year. Average premiums will be about $57, up 14 percent from $50 this year. About 288,000 Minnesotans have such a plan.
Medicare Advantage: These plans combine medical care and drug coverage. There will be 24 plans, down from 26 this year. The average drug premium will be about $44, up 13 percent from $39 this year. Consumers pay a separate premium for the health portion of these plans. About 222,000 Minnesotans are enrolled in those plans.
Special needs plans: These speciality plans combine health and drug coverage for about 37,000 Minnesotans with disabilities or those who qualify for both Medicare and Medicaid. There will be 15 such plans, down from 17 this year.
In addition, about 130,000 low-income Minnesotans are getting help paying prescription bills. Those with the full subsidy pay no premium or deductible and drugs cost $2.50 for generics and $6.50 for brand-name drugs. The LinkAge Line helps qualified people get the low-income subsidy as well as enroll in drug plans.
The volume of calls to that help line already is ahead of previous years as more beneficiaries start making comparisons, Wood said.
"People have more questions," she said. "Every year it's kind of complex. This year it may be even more so."
Distributed by McClatchy-Tribune Information Services.