USA Today Examines Differences in Medicare Prescription Drug Plans

USA Today on Monday examined different plans offered by health insurers under the new Medicare prescription drug benefit (Appleby [1], USA Today, 12/12). According to USA Today, most health insurers decided to participate in the Medicare prescription drug benefit "despite the unknown terrain," but "whether they turn a profit depends on how well they've estimated their costs" and the number of beneficiaries who enroll in their plans (Appleby [2], USA Today, 12/12).

USA Today used data from the research firm Avalere Health to compare Medicare prescription drug plans offered by Medco Health Solutions, PacifiCare Health Systems, UnitedHealthcare, Cigna, SilverScript and UniCare, as well as plans offered by Humana in all but four states. According to USA Today, two of the three Medicare prescription drug plans offered by Humana have the lowest monthly premiums, and the third plan covers both generic and brand-name medications in the "doughnut hole" in coverage. The three plans offered by PacifiCare do not have annual deductibles, and one plan covers generic medications in the doughnut hole. A plan offered by UniCare that has higher monthly premiums covers more than twice as many medications as two other plans that have lower monthly premiums.

The plans offered by Cigna have higher monthly premiums, but they cover more medications and require copayments for only three prescription drug categories. Meanwhile, plans offered by UnitedHealth have lower monthly premiums and fewer prior-authorization requirements than those offered by other health insurers. One plan offered by Medco has benefits similar to the standard benefit required under Medicare but requires 75% copays for brand-name prescription drugs not included on the plan formulary (Appleby [1], USA Today, 12/12).

Here's the full article:

Boiling down plans for comparison

By Julie Appleby, USA TODAY

One insurer has the lowest premiums; another touts its zero-deductible plans. A third can capitalize on the brand recognition of a prominent senior group.

It isn't just Medicare members who hope to benefit from the government's new prescription drug plan: The more than 80 insurers offering the coverage are eyeing $60 billion in spending next year alone and up to 42 million potential customers.

"No one knows what to expect," says Rod Cavin, managing director of the Health Strategies Group, a consulting firm to the pharmaceutical industry. "(Insurers’) basic response is, ‘We're just putting our toe in the water to see what we get out of it this year.’ "

While nationwide the number of offerings and variations is dizzying, it is possible to draw conclusions about individual insurers' offerings.

Using data from Avalere Health, a private, for-profit research firm in Washington, D.C., USA TODAY looked at six of the 10 national plans -- Medco, PacifiCare, United, Cigna, SilverScript and UniCare -- and one plan offered in all but four states, Humana. It found:

• Two of the three Humana plans have the lowest monthly premiums. Such plans may appeal to seniors with low drug costs who want insurance coverage just in case their needs change. Its higher-priced, third plan breaks from most other insurers in covering both generic and brand-name drugs when Medicare beneficiaries hit the so-called coverage gap, the point where many policies require members to pay the full cost of drugs until a threshold is met.
• PacifiCare's three offerings all come without annual deductibles. One plan offers generic drugs in the coverage gap, appealing to customers who are willing to take generic rather than brand-name drugs.
• UniCare has a middle-market approach, being neither the most expensive nor the least. Its high-end plan includes more than twice as many drugs on its formulary -- a list of covered drugs -- than its two lower-premium offerings, a feature likely to appeal to those who don't like restrictions or switching drugs.
• Cigna's premiums are higher than the others in the analysis, but its formulary includes more drugs and has a co-payment system with only three categories. The categories, known as tiers, determine how much members pay at the pharmacy. Most of the other insurers have four or more tiers.
• United's premiums are on the lower end, and the firm's policies may attract customers based on name recognition, particularly as one of its offerings is marketed by the senior advocacy group AARP. It has fewer prior-authorization requirements on its drugs than the other insurers reviewed.
• Medco, a pharmacy benefit manager, offers one plan, with benefits similar to the standard benefit as defined by Medicare. While it charges $4 for generic and $17 for preferred brand-name drugs, it charges a co-payment of 75% of the cost of non-preferred brand-name drugs, the highest of the plans reviewed.

For complete chart, go to
http://www.usatoday.com/money/industries/insurance/2005-12-11-plans_x.htm