First Steps

Asclepios-Your Weekly Medicare Consumer Advocacy Update-Medicare Rights Center
December 11, 2008 • Volume 8, Issue 49

The Government Accountability Office has discovered that in 2006 insurance companies pocketed as profits $1.3 billion in Medicare subsidies that should have paid for extra benefits for enrollees in Medicare private health plans.

President-elect Barack Obama has already promised to cut wasteful spending on these so-called Medicare Advantage plans. The Obama administration should also make sure that the subsidies given these plans pay for a decent set of benefits. In particular, all plans should provide a comprehensive out-of-pocket limit on medical services, a vital financial protection for enrollees who need high-cost care.

Requiring a decent minimum benefit standard for Medicare Advantage plans is just one of ten administrative steps the designated Secretary of Health and Human Services Tom Daschle and his health care team should enact. In a memorandum to the Obama transition team released today, the Medicare Rights Center recommends that the new administration:

• Require Medicare Advantage plans that serve people with low incomes or chronic illnesses to provide adequate care coordination.
• Allow state insurance departments a greater role in preventing and punishing abusive marketing by Medicare Advantage plans.
• Prevent pharmacy benefit managers from inflating the price of drugs under the Part D prescription drug benefit.
• Stabilize Part D drug coverage for low-income people with Medicare.
• Ensure that low-income people with Medicare are enrolled in drug plans that best meet their needs.
• Allow prescription drug plans to cover uses of drugs that are supported by clinical evidence in peer-reviewed medical journals.
• Strengthen consumers’ ability to appeal when coverage of medically necessary medicines is denied by Part D drug plans.
• Require Part D drug plans to automatically reimburse low-income enrollees for excess premiums and copayments paid.
• Collect data from Part D plans to ensure appeals and transition policies prevent disruptions to drug regimens.

The new Obama administration has the legal authority to enact all these measures administratively, without legislation from Congress. These are vital first steps to ensuring that people with Medicare receive the care they need from these private plans and that taxpayers get their money’s worth.