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Medicare drug program proposal draws fire

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The Centers for Medicare & Medicaid Services (CMS) is thinking about trying to simplify the product menu at an established, popular exchange program — the Medicare Part D prescription drug program.

Medicare enrollees can use the program to buy standardized, subsidized prescription drug plans through websites and other channels.

Managers of some of the new state-based Patient Protection and Affordable Care Act (PPACA) medical insurance exchanges have argued that letting carriers offer several different similar plans through an exchange confuses consumers.

Policymakers who believe that too much choice leads to problems want carriers to ensure that, if they offer multiple plans through a PPACA public exchange, each plan has “meaningful differences” from the other plans the carrier offers through the same exchange.

CMS officials have proposed imposing similar “meaningful differences” rules on Medicare Part D drug plans, to ensure that the different plans an issuer offers provide noticeably different out-of-pocket cost levels; to keep insurers from giving the illusion that a region’s market is more competitive than it really is; and to keep an insurer from using multiple plans to manipulate the Medicare plan quality rating system.

“Allowing a parent organization to effectively administer two or more [drug plan] sponsor contracts would allow it to potentially inflate the star ratings on one contract by excluding the poor performance under its other contract from the rating calculation,” officials said in a preamble to the proposed regulations.

Matt Eyles, an analyst at Avalere Health, has estimated that the proposal could eliminate about 39 percent of the plans that would otherwise be offered in 2016.

Many carriers offer a lower-priced, narrower plan along with a higher-priced, broader plan.

Combining the options would probably increase premiums for the enrollees now using the lower-priced plans, Eyles predicted.

Rep. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee, and Rep. Dave Camp, R-Mich., chairman of the House Ways and Means Committee, have joined with Sen. Orrin Hatch, R-Utah, to object to the proposed change, calling it an example of “bureaucratic overreach.”

“CMS’ rule means millions of seniors could face the same fate that too many Americans have experienced under the Affordable Care Act,” the lawmakers write. “If seniors like their health plan, they can’t keep it.”

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