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Low-Income Medicare Beneficiaries Will Have Fewer Part D Options in 2009

Contact: Lindsey Spindle, 202.207.1337, lspindle@avalerehealth.net

10.07.08

Washington, DC – Low-income Medicare beneficiaries will have fewer Part D drug plans to choose from in 2009, according to an independent analysis by Avalere Health.  Avalere found that 1.3 million low-income seniors will be automatically reassigned into new drug plans by the end of this year due to marketplace changes, showing a trend line of reassignment that has increased every year since the inception of the drug benefit program. 

Using its proprietary DataFrame® database tool, Avalere researchers compared 2008 and 2009 standalone prescription drug plans (PDPs) qualified to serve low-income beneficiaries, including dual eligibles (i.e., those eligible for both Medicare and Medicaid) in all 50 states.  Six states – Arizona, Florida, Hawaii, Maine, Nevada, and New Hampshire – will each have five or fewer PDPs available to automatically enroll low-income residents in 2009.  Nevada will have only one auto-enrollment PDP, thus leaving low-income residents in that state with no PDP choice, unless they move to a Medicare Advantage plan.  Arizona has the second fewest options with two plans available for low-income residents.  Wisconsin will have 16 auto-enrollment PDPs, unchanged from 2008 and higher than any other state. 

The analysis revealed that, nationwide, there will be a total of 308 PDPs qualified to serve low-income Medicare beneficiaries in 2009, almost 200 fewer than in 2008.  These almost-200 plans covered approximately 1.3 million individuals who will now need to be reassigned.  That number is up from 1.2 million individuals who CMS reassigned in 2008 and 250,000 individuals in 2007.

Humana continued its withdrawal from the low-income market, this year exceeding the benchmark in all states.  United Healthcare, however, expanded its presence in the market after losing nearly 600,000 low-income beneficiaries last year.  Of the top 10 PDPs as ranked by August 2008 enrollment, only one – United Healthcare’s AARP MedicareRx Saver – will see an increase in the number of states in which it is eligible for auto-enrollment.

“Pursuit of the dual eligibles is now a matter of business strategy for insurers – with some expanding and some diminishing their service to low-income beneficiaries in 2009,” said Bonnie Washington, vice president of Avalere Health.  “The fundamental question for Medicare is whether low-income beneficiaries ending up in plans that do not fully meet their medical needs – especially given the fact that their choices are limited in many states.” said Washington.

Avalere continues to analyze Medicare drug benefit data.  It uses its proprietary DataFrame® database to track trends in drug pricing, plan strategy and structure, and the beneficiary experience.  For more information on DataFrame® and Avalere’s analytic capabilities, contact Lindsey Spindle, lspindle@avalerehealth.net.

Avalere Health is an advisory services company whose core purpose is to create innovative solutions to complex healthcare problems. Based in Washington DC, the firm delivers research, analysis, insight, and strategy for leaders in healthcare business and policy. Avalere's experts span 125 staff drawn from the federal government (e.g., CMS, OMB, CBO, and the Congress), Fortune 500 healthcare companies, top consultancies, and nonprofits. The firm offers deep substance in areas ranging from healthcare coverage and financing to the changing role of evidence in healthcare decision-making. Its focus on strategy is supported by a rigorous, in-house analytic research group that uses public and private data to generate quantitative insight. Through events, publications, and interactive programs, Avalere also translates real-time healthcare developments into actionable information.

Learn more at www.avalerehealth.net.

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