New Resources Examine Enrollment, Premiums and Gap Coverage in Medicare Drug Plans

As the next open-enrollment period approaches, the Kaiser Family Foundation has issued two new Medicare Part D Data Spotlights examining key changes and variations among the private Medicare drug plans available in 2008, as well as a new chartpack examining enrollment in Part D plans. More than 24 million seniors and disabled people receiving Medicare benefits are enrolled in private Medicare drug plans, including 17 million in stand-alone drug plans and 7 million in Medicare Advantage drug plans.

The first spotlight analyzes the premiums charged by the 1,824 stand-alone Medicare Part D plans that will be offered in markets across the country in 2008. Premiums charged for Part D plans range widely, from $9.80 per month to $107.50 per month. If all enrollees remain in their current plan in 2008, the average monthly premium would increase from $27.39 in 2007 to $31.99, a 17 percent increase, with nearly one in five of this year’s enrollees experiencing an annual increase of at least $120. Premium increases in the most popular stand-alone drug plans and shifts in the overall marketplace are also highlighted.

The second spotlight examines the coverage gap, or “doughnut hole,” in Medicare drug plans. Part D enrollees (other than those receiving low-income subsidies) will reach the coverage gap after they incur $2,510 in total drug costs in 2008. At that point, enrollees are required to pay 100 percent of drug costs until they qualify for catastrophic coverage. In 2008, more than a quarter of stand-alone Part D plans and half of Medicare Advantage plans will offer some type of gap coverage, mainly for generic drugs. Nationwide, only one stand-alone drug plan and 16 percent of all Medicare Advantage drug plans offer coverage for at least some brand-name drugs in the gap. Enrollment in plans with gap coverage and trends in the availability of gap coverage over time are also examined.

The third document, a chartpack, includes key information about Part D enrollment, by firm and by plan, in 2007. The charts show how a relatively small number of companies captured a large share of Part D enrollment in 2006, the first year of the drug benefit, and continued to lead in market share in 2007. In addition, it shows how most enrollees are in plans without gap coverage – with about 11.8 million people potentially at risk for reaching the benefit’s coverage gap and having to pay the full cost of their drugs.

From November 15 to December 31, Medicare beneficiaries will be able to enroll in a Medicare drug plan or change plans if they are already enrolled. Kaiser will provide additional resources and analysis, including data spotlights examining Part D plan formularies and cost-sharing requirements. Updated fact sheets providing an overview of the Medicare prescription drug benefit are available online and a state-by-state look at key features of the available 2008 stand-alone plans are now available.