What to expect in Medicare Rx: varying premiums, PDPs for duals.(In Medicine & Health Perspectives this week ...)

Publication: Medicine & Health

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Uncertainty surrounds many facets of Medicare's prescription drug benefit, as plan-sponsor hopefuls gear up to submit their applications March 23.

Drug-only insurance plans bearing partial risk for enrollees' prescription-drug costs are nearly unknown, and drug-cost and utilization information is scarce for Medicare beneficiaries. That leaves would-be sponsors with little information on which to base the bids they must submit by June 6.

But as the Centers for Medicare and Medicaid Services release more detailed guidelines and potential sponsors announce their intentions, the picture is becoming a little clearer. Among observers' predictions: Sponsors will design plans specially targeted to different beneficiary groups, such as dual eligibles, and enforcing rules intended to prohibit plans from discouraging enrollment by sicker beneficiaries will be a sticky wicket for CMS.

* Drug plans won't be one size fits all. Perhaps to the surprise of some, sponsors are developing drug plans to target different markets, said Health Strategies Consultancy President Dan Mendelson at a March 14 Kaiser Family Foundation briefing.

Rather than constructing formularies to attract the widest possible range of beneficiaries, plans "are appearing to segment the Medicare population," he said. When the details become known over the next few months, "I would expect to see a considerable level of variation" both between regions and between individual prescription drug plans "among formularies that are offered."

One big reason that such differences will emerge, said Georgetown University Research Professor Jack Hoadley: In order to participate in the drug benefit to the extent that they--and federal officials--hope, PDPs not only must meet CMS's requirements but also "are responsible to the market" for designing plans that will attract beneficiaries to sign...

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