3 Million May Need Medicare Switch

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More than 3 million seniors may have to change their Medicare prescription drug plan as soon as October, according to a report from private research firm Avalere.

The report states that fewer plans will be offered in 2011, as Medicare officials attempt to eliminate confusion caused by too many existing alternatives.  

Avalere, which has conducted studies on Medicare before, says its analysis was based off of new Medicare specifications. For example, earlier this year, Medicare notified insurers that they would only allowed to offer one “basic” plan in a given location. This means that certain insurers, such as AARP and CVS Caremark, will have to eliminate one of their basic options, a stipulation that will force 2.75 million beneficiaries to find new coverage. About 17.5 million seniors are currently enrolled in the Medicare program.

Under the Medicare Prescription Drug, Improvement and Modernization Act, Medicare recipients choose a stand-alone Prescription Drug Plan or Medicare Advantage plan with prescription drug coverage each year from October to December. These programs are approved and regulated by the Medicare program, but have been designed and administered by private health insurance companies.

Currently, seniors choose from 40 or more plans, depending on their home state. Avalere estimates that downsizing will require beneficiaries to chose from about 30 plans come this October. According to the report, downsizing will not cost seniors coverage, but could result in changes to their premiums and/or co-pays. There will, however, be many low-cost options still available under the restructuring.  

Despite this assertion, Medicare officials were quick to dismiss the estimates.

Tony Salters, a spokesperson for the Centers for Medicare and Medicaid Services, told Walletpop that these numbers were premature since the government has yet to detail what types of changes will be made in 2011.

While these changes may be a hassle for seniors who have to switch, many organizations believe that downsizing will ultimately benefit Medicare recipients, who are bogged down by too many choices.

"Some opponents of the [health care] law may say that this is taking away choices, but we have heard from our members for years that the [drug coverage] options can be confusing," Nora Super, AARP's top health care lobbyist told the Associated Press.

Medicare policies, it seems, are constantly changing. Earlier this month, federal health officials announced that premiums would rise universally by about $1 in 2011, while the cost of brand name and generic drugs would decrease by 50% and 7%, respectively.

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