Health policy moves up priority list for Bush administration

February 1, 2006

For consumers to make . . . decisions, they need more information on the performance and prices of medical services and products.

The much-anticipated Medicare prescription drug program got off to a rocky start last month, and the political fallout might be considerable. Although millions of seniors had no trouble filling prescriptions, the media was filled with horror stories about elderly patients unable to obtain vital medicines. A lot of nasty calls to Washington came from pharmacists, who bore the brunt of the computer and information glitches: Some new plan enrollees were denied coverage and many low-income "dual eligibles" formerly covered by state Medicaid programs were hit with $250 deductibles. The pharmacists blasted insurers and the Centers for Medicare and Medicaid Services (CMS) for inadequate information systems and too-slow responses to problems.

The picture improved somewhat when Health and Human Services (HHS) Secretary Mike Leavitt was able to announce a big surge in individuals signing up for drug plans. CMS reported that 2.6 million more enrollees joined prescription drug plans (PDPs) as of mid-January, plus about 400,000 opted for Medicare Advantage drug plans (MA-PDs). This represented a significant increase from the 1 million seniors who joined drug plans in early December.

CONFUSION OVER DUALS

CMS also promised pharmacists that it was beefing up pharmacy help lines, improving computer systems and striving to solve incorrect copays and eligibility denials. In a teleconference early last month, pharmacists cited particular problems with some of the larger health plans offering Part D coverage on a national basis, as well as local and regional PDPs. Unexpected confusion over coverage of Part B vs. Part D drugs for seniors transitioning from some state Medicaid plans to stand-alone PDPs added to the coverage chaos.

WHO'S SIGNING UP?

Reimbursement for dual eligibles caused the most problems during the Part D rollout principally because they constitute the largest group of new members in the new drug plans. CMS announced last month that it had enrolled more than 14 million beneficiaries in the new drug program. This amount, however, includes almost 5 million Medicare Advantage plan members who rolled over into MA-PDs, plus 6.2 million dual eligibles that CMS assigned to Part D plans.

Of the 6 million duals, 600,000 who were already enrolled in state Medicaid managed care programs joined MA-PD plans. CMS automatically assigned the vast majority to PDPs, and several thousand of those opted to enroll in a different plan; those late changes, CMS officials maintain, is the main reason that some low-income seniors had problems filling prescriptions at pharmacies in January.

CMS Administrator Mark McClellan declared that the new enrollment numbers "substantially exceed our expections." CMS expects another 5 million seniors will join the program voluntarily by May, but reaching that goal remains a significant challenge.

PROMOTING CHOICE

The success of the Medicare prescription drug program is a critical concern for the Bush administration as health policy moves to the top of the list of prime public concerns heading into November Congressional elections. With employers seeking new ways to control healthcare costs in order to retain benefits, the White House continues to promote market-based initiatives to expand access to healthcare.

The Republican focus is to expand health savings accounts (HSAs) and other consumer-directed healthcare programs that make individuals more responsible for weighing costs and benefits in decisions on medical treatments. The GOP agenda also includes boosts in tax incentives for individuals to purchase health insurance, further malpractice reform and broader deductions for individual healthcare expenditures.

Not on the list is any initiative to reduce tax benefits to companies that provide employee health insurance. Last year a presidential tax advisory panel recommended such a reform, but the Bush administration is not eager to launch a major revolution in the nation's healthcare system.

Democrats, organized labor and consumer groups staunchly oppose moves to curb employer-based health coverage, as do insurers and MCOs; both sides regard tax exclusions for employer-provided healthcare as the most efficient way to provide broad healthcare coverage for Americans. The discussion this year, says Karen Ignagni, president of America's Health Insurance Plans (AHIP), "should be about ways to expand, not contract, coverage."