Getting Ready for the Medicare Drug Benefit in 2007

CMS Announces Drug Plan Offerings the New Plan Year Beginning on January 1, 2007

October 11, 2006 – The Centers for Medicare and Medicaid Services (CMS) announced new prescription drug plan offerings for 2007, initiating an open season process that will continue until the new plan year begins on January 1.

For 2007, there will be as many as 50 to 60 drug plan choices in most states, on average 10 to 15 more than were available in 2006. In most states, average monthly premiums will be below what they were in 2006, with the average national premium falling to $24 per month – down substantially from the standard monthly premium of $37 that was set forth by Congress in 2003.

In addition to lower than predicted prices, some plans are planning to offer enhanced benefits in 2007, including elimination of cost sharing for generic medications.

Two national plans – United-AARP and Wellpoint – will be offering coverage of benzodiazepines (medications commonly prescribed for acute mania in bipolar disorder and anxiety disorders) that were excluded in 2006. This coverage is only being offered in so-called “enhanced” plans that require a supplemental premium, i.e. coverage beyond a basic drug plan.

The process for selecting a Medicare prescription drug plan (PDP) mirrors the process that has existing for more than 25 years for the Federal Employees Health Benefits program – an “Open Season” in the fall during which participants select from a menu of plan options, with coverage going into effect on January 1.
Beginning on November 15, and running through December 31, Medicare beneficiaries will be able to enroll in a plan for 2007. CMS is requiring every drug plan to have enrollment and coverage effective by January 1 for anyone who enrolls by December 8 – in other words, an enrollment decision by December 8 can guarantee seamless coverage available during the first week of January.

It is important to note that most beneficiaries who want to stay with the coverage they had for 2006 will not have to re-enroll for 2007 (there are some key exceptions for certain low-income dual eligible beneficiaries, see below). Others may want to change coverage as a result of changes in coverage policy, cost sharing or removal of a drug from a formulary for 2007.

How To Find the Medicare Drug Plans Available in Your State

CMS has already posted charts for plans available in each state with monthly premiums, deductibles, gaps in coverage and whether or not plans are available to dual eligibles and other low-income beneficiaries. Click here to view this chart.