Few Medicare Plans In 2008 Will Offer Brand-Name Insurance Coverage

Few Medicare plans in 2008 will offer brand-name prescription drug coverage in the so-called "doughnut hole" gap because of cost, meaning that Medicare beneficiaries will have fewer options when choosing a plan during the open enrollment period that ends Dec. 31, the San Francisco Chronicle reports. The doughnut hole gap in 2008 begins when drug costs for an individual and his or her insurer reach $2,510 and ends when spending reaches $5,726. Only one plan, located in Florida, will provide coverage for brand-name prescription drugs in the gap in 2008.

According to the Chronicle, the lack of brand-name coverage in the coverage gap "is a big change for beneficiaries who opted to spend more for higher-level coverage that offered them some protection when they reached" the doughnut hole. Brand-name coverage within the gap is available to some individuals through Medicare Advantage plans, but "that means giving up traditional Medicare in exchange for a health plan managed by a private company," according to the Chronicle.

Debbie Smith, regional president for senior products in the western region for Humana, said that the company stopped offering brand-name coverage because it is cost-prohibitive, adding, "We have to take the experience of the utilization and factor that in. It is about balancing a premium and the benefit for the member" (Colliver, San Francisco Chronicle, 12/9).

Open Enrollment Period Heightens Insurance Fraud

In related news, the Wall Street Journal reports that during the open enrollment period, regulators are "warning that an increasing number of unscrupulous insurance agents ... view it as open season for preying on older adults." Illegal activities of insurance salespeople include "violating federal regulations against door-to-door selling of coverage and the forging of signatures," according to the Journal. Mary Jo Hudson, director of the Ohio Department of Insurance, said that the complexity of Medicare and the vulnerability of the elderly to high-pressure sales tactics "is very bad news" for beneficiaries.

Critics say that the unscrupulous sales practices are driven by "commission structures that favor promoting one plan over another no matter what the needs of an applicant" and also note that insurance companies "hold contests to push their products that promise salespeople prizes like trips to Las Vegas,"