Medicare and Medigap Exceed Expectations with Seniors
"Most seniors now have prescription drug coverage that allows them to buy drugs at a reasonable cost," according to a nonprofit research RAND Corporation study. About 90 percent of seniors had drug coverage that was at least as good as the standard Part D benefit, and Medicare recipients could choose from more than 50 different Part D plans in most states in 2008. That shows there is competition among the private companies that provide the coverage.
Researchers estimate that during its first year (2006), Medicare Part D produced a 16 percent drop in out-of-pocket spending for seniors' prescriptions, and a 7 percent increase in seniors filling their prescriptions. In addition, these savings were concentrated among people with disabilities and low incomes.
Although some seniors still need more education about the benefits that are available for them, the program has worked well for the majority of seniors, according to a report published in the American Journal of Managed Care.
Comparing the Benefits of Seniors' Prescription Plans
RAND researchers looked at administrative records to understand seniors' participation in the Medicare Part D program. That included how seniors' access to medications has been affected, seniors' use of prescription drugs, and their financial risk.
The researchers also compared the ten largest Part D plans that were available in 2006 to seven of the non-Medicare drug plans that were cited as examples of low-cost, generous pharmacy benefits.
They found that the number of covered drugs in the 10 largest Medicare Part D plans compared favorably with the coverage provided by other prescription drug plans that insure seniors, such as those offered by the California Public Employees Retirement System, Kaiser Permanente, and the Veterans Administration.
Among the 300 prescription drugs that were most often used by seniors, about half of these drugs were covered by the lowest co-payment tiers provided by the ten largest Medicare Part D plans. However, the number of drugs that were not covered varied from four to 41 among the largest Part D plans. In contrast, Kaiser Permanente excluded 75 frequently needed medications, and the Veterans Administration excluded 84 of the most commonly needed medication for seniors.
More Education about Prescription Benefits Still Needed
Although the program exceeded initial expectations, a substantial number of seniors are relatively uninformed about the benefits of enrolling in Medicare, and the advantages that Medicare Supplement Plans (also called Medigap Plans) and Medicare Advantage Plans can offer them.
The annual spending caps included in some plans left too many seniors without prescription coverage for part of the year. More recent studies have suggested that as many as three million seniors reached the gap in Medicare Part D coverage in 2007. There is also concern that an estimated 20 percent of seniors stopping taking their medications when their coverage lapsed.
In June of 2010, plans with the advantage of lower monthly premiums are being added to the existing Medicare Supplement Plans. It's in seniors' interest to evaluate all the available plans, and to choose the one that best fits their situation. Their best bet may be to talk with independent insurance agents who have expertise with a variety of plans from different companies. Many such agents provide free consultations to answer seniors' questions and help them compare the available plans.
About the Author
By Wiley Long - President, http://www.MedigapAdvisors.com - The nation's leading independent agency specializing in Medicare Supplemental Insurance. Our professional MediGap advisors look forward to the opportunity to help you get the best insurance for your healthcare needs.
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