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Regulators Parse New Rx Law

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NU Online News Service, Dec. 9, 2003, 5:49 p.m. EST, Anaheim, Calif. – The complexity of the new Medicare prescription drug law will make implementing it a challenge, according to regulators, insurers and consumer advocates who are here for the winter meeting of the National Association of Insurance Commissioners, Kansas City, Mo.[@@]

President Bush signed H.R. 1, the Medicare Prescription Drug, Improvement and Modernization Act of 2003, into law Monday.

Regulators at the NAIC winter meeting said the NAIC will have to update the Medicare Supplement Insurance Minimum Standards model regulation to reflect the MPDIMA changes.

The NAIC will have to develop two new plans that offer the new prescription benefits and clean up Medigap plans H, I and J to remove existing drug benefits, regulators said.

The NAIC also will be working with the Center for Medicare & Medicaid Services to develop notices to enrollees in current plans about changes to the plans and options available under the new prescription drug plans.

Finally, the NAIC will have to develop solvency standards for plans that received waivers from state licensing requirements. The NAIC will have to develop the solvency standards in conjunction with the secretary of the U.S. Department of Health and Human Services.

Because of the time that regulators will have to devote to changing the Medigap model, they plan to scale back work on revisions to a long term care model act, regulators said.

All meeting attendees interviewed agreed on the importance of educating consumers about the new prescription coverage benefits.

The new law is very complex and there is a concern that consumers understand their options, says Van Ellet, a representative for AARP, Washington.

Consumers should be aware of matters such as the penalties for late enrollment in Part D plans, according to Bonnie Burns, a representative for California Health Advocates, Scotts Valley, Calif.

Burns also talked about the need to tell consumers that they cannot insure the “donut” of prescription costs that lies between $2,250 and $5,100 in annual prescription costs.

Lawmakers included the donut as an incentive to persuade Medicare beneficiaries to hold down prescription spending.

Even if the NAIC modifies the Medigap model by September 2004, the Jan. 1, 2006, effective date for the federal prescription benefits program will challenge states that are trying to implement the revised Medigap model, Burns said.