The Bush administration is looking at ways to simplify the new Medicare prescription drug benefit, but initial proposals are unlikely to win over the program's critics.
In a 39-page draft memorandum to insurers, employers and others administering the drug benefit, the Centers for Medicare and Medicaid Services asked for advice on how to simplify the program in 2007.
The agency proposed limiting to two the drug plans a company can offer per region. Many insurers now offer three, and since there are often more than a dozen insurers per region, consumers often have more than 40 choices.
The agency also said it expects that an insurer's two plans must have meaningful differences to make comparisons easier.
The recommendations appear to be a direct response to concerns that some older and disabled people are confused by the vast array of options.
Ron Pollack, executive director of the activist group Families USA, said the plans can't generate enough enrollment to generate bargaining clout with drug manufacturers.
Slightly reducing the number of plans won't change that scenario, he said, nor will it make the program easier to understand.
"When you have such a huge number of companies providing this coverage and no effort to standardize benefits it creates chaos," Pollack said.
Rep. Pete Stark, D-Calif., a frequent critic of the program, gave the Medicare-Medicaid agency credit for seeking to simplify the plan, but he did so while also criticizing the administration.
"It is too bad this recognition comes 2 1/2 years after passage of the law, and two months into implementation," Stark said.
The administration said competition from insurers is lowering the cost of the program. In early February, it said premiums will average about $25 a month, as opposed to the $37 projected when the program was approved. It now estimates the program will cost about $678-billion over 10 years rather than about $730-billion estimated originally.
"We're seeing the cost of drugs come down in a rapid way because of an organized, competitive marketplace," Health and Human Services Secretary Mike Leavitt said earlier this month.
A spokesman for the Medicare-Medicaid agency, Gary Karr, said the draft memorandum should not be viewed as a sign the administration is backing away from the view that all the choices are a good thing for the elderly and disabled.
"It's simply asking for comment," Karr said. "Earlier, there were predictions we would not have enough plans. That's clearly not the case now. The question is will it still be of service to beneficiaries if you had fewer. Again, it's not a commitment."
About 42-million people are eligible to enroll in a private plan that is designed to subsidize some of their prescription drug expenses. Most of the larger insurers give beneficiaries more than one option.
For example, one company will offer a plan that charges consumers less, but the trade-off can be a more limited choice of drugs. Another plan will offer more drug coverage but the customer will have to pay higher premiums.
The range of plans available vary by region. In Alaska, there are 11 insurers offering 27 drug plans. In Pennsylvania, there are 23 insurers offering 52 plans.
Beneficiaries also can choose from more comprehensive medical coverage, called Medicare Advantage, which operates like an HMO. Most beneficiaries can choose from more than a dozen Medicare Advantage plans.