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Should Part D Plans Be Standardized?

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Some members of Congress say the government could fix what ails the new Medicare prescription drug program by giving eligible consumers fewer choices.

Today, consumers are having trouble shopping for coverage because of the wide spectrum of plans, according to Sen. Max Baucus, D-Mont., the most senior Democrat on the Senate Finance Committee.

“Congress should learn the lesson of Medigap,” Baucus said at recent Finance Committee hearing on the recent Medicare drug plan startup problems. “We should standardize the drug plans.”

Baucus, who was referring to legislation that created 10 standard Medicare supplement insurance policies, said adopting a limited number of standard Medicare drug plans should help seniors make “apples to apples” comparisons of different plans.

Testifying at the hearing, Dr. Mark McClellan, the administrator of the Centers for Medicare and Medicaid Services, said he has been pleased to see the establishment of plans that go above and beyond the original intent of the Part D drug benefit program.

When beneficiaries signed up for drug coverage, “most people did not want the standard plan,” McClellan said.

In addition, competition has helped keep program costs down and reduced projected costs by $130 billion, McClellan said.

Sen. Orrin Hatch, R-Utah, defended the wide selection of drug plans.

“We’re all amazed by how many companies want to participate” in the Medicare drug program, Hatch said. The increased number of choices does make selecting a plan difficult he acknowledged, but has overall been a “wonderful thing,” given that members of the Senate once questioned whether any insurer would willingly offer any drug plans. Now, he noted, “some have worked better than what we designed in the bill.”

The committee met to discuss the problems that occurred when the program was launched in January. Many seniors who had signed up for the program found that their claims were denied or that pharmacies asked them for big co-payments when they tried to fill prescriptions. McClellan attributed the problems to a surge in last-minute program signups. In some states, the problem was so severe that state authorities were forced to intervene and, in some cases, pick up the tab for prescriptions.

Sen. Kent Conrad, D-N.D., called the startup of the program a “fiasco.”

“People are furious at your agency,” he told McClellan. “This has been botched and bungled every step of the way.”

Conrad criticized McClellan’s claims that customer service for the program has improved. He suggested that wait times on the CMS’ Medicare help phone number have fallen because fewer consumers are bothering to call.

“People say, ‘Calling CMS is worthless,’” Conrad reported.


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