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From Health Law Daily, September 25, 2014

Part D plan switch may leave high costs and donut hole behind

By Bryant Storm, JD

Only five percent of Medicare beneficiaries are enrolled in the Medicare prescription drug plan (PDP) that provides him or her with the lowest total out-of-pocket costs, according to a recent study by eHealth®. The study, which pulled data from 22,000 users of the eHealthMedicare.com and PlanPrescriber.com online Medicare plan comparison tools, found that while 42 percent of Medicare beneficiaries were projected to hit the Medicare prescription drug coverage cap, also known as the donut hole, in 2014, that number could be dropped as low 19 percent if those same users switched to the lowest out-of-pocket cost plan available to them. An eHealth report summarizing the study’s findings suggests that, in light of the findings of the study, Medicare beneficiaries should reevaluate their PDP choice when Medicare’s annual election period opens between October 15, and December 7, 2014.

Study. The user data was used to make over 17,000 stand-alone PDPs comparisons and over 5,000 comparisons of Medicare Advantage Prescription Drug plans (MA PDPs). The study’s comparisons evaluated existing user plans with other available plans in a beneficiary’s area. The comparison was made by cross referencing information like a user’s known prescription drug costs, monthly premiums, co-pays, co-insurance, and deductibles. For the purposes of comparing prices, the study assumed that prescription drug needs did not change for the beneficiaries in question.

Findings. Regarding MA PDPs, only 11 percent of users were enrolled in the lowest cost plan in terms of out-of-pocket cost. The study also determined that, on average, switching to the lowest cost plan would have saved Medicare beneficiaries with MA PDPs $218 annually. Stand-alone PDP beneficiaries fared even worse with only 3 percent enrolled in the lowest cost plan. Additionally, stand-alone PDP beneficiaries would have realized a projected annual savings of $961 if they had switched to the lowest out-of-pocket cost plan.

Reasons for change. The summary of the study evaluated some of the reasons that PDPs change in order to explain why a beneficiary may want to reevaluate a prior plan selection. The study suggests that formularies, premiums, deductibles, coinsurance amounts, co-payments, and drug tiers that assign costs to certain drugs all can change dramatically from year to year. As a result, eHealth suggests that the lowest cost plan for a beneficiary one year may not be the lowest cost plan the following year.

Popular drugs. The study also looked at search data from the 22,000 users and determined that the most common drugs Medicare beneficiaries search for are generic versions of popular brand name drugs. Some of the most popular generics sought by beneficiaries were those used to treat gastroesophageal reflux disease, high blood pressure, high cholesterol, coronary artery disease, type II diabetes, and hypertension.

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