Insurers for medicare's prescription-drug benefit have been chosen

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WASHINGTON - The federal government on Friday named the private insurers that will cover millions of disabled and elderly people next year under Medicare's new prescription-drug benefit.

The firms, selected after an intensive assessment of their finances and their ability to provide the benefit, include a mix of large national companies, small regional outfits and several insurance-industry newcomers.

Nine will issue policies nationwide. Dozens of others will offer coverage only in individual states or to small groups of neighboring states.

Together, they'll provide what Congress decided that Medicare alone should not: voluntary prescription-drug coverage for the program's enrollees.

Slated to cost more than $720 billion over the next decade, the drug benefit is one of the most generous health offerings in U.S. history and the greatest expansion of Medicare services since the program began in 1965.

"Medicare is taking an historic step today toward coverage that will bring the best of modern medicine to our beneficiaries," Health and Human Services Secretary Michael Leavitt said.

The new benefit will push Medicare drug spending to a projected $70 billion next year and help drive total Medicare spending from roughly $332 billion this year to $425 billion in 2006, according to Medicare actuaries.

Medicare's free-market foray into the pricey world of prescription-drug coverage was a long time coming and still has many detractors and doubters. Instead of using the program's 43 million members as leverage to negotiate lower drug prices, the Republican-led Congress, backed by the Bush administration, opted to cover enrollees through the private insurance market.

Competition among the selected insurers is being counted on to keep prices down, and the concept appears to be working, Medicare Administrator Mark McClellan said Friday.

Every state except Alaska will have at least one plan with a monthly premium of less than $20, he said. All but six states - Arkansas, Delaware, Massachusetts, New Hampshire, South Carolina and Vermont - will offer coverage with no monthly premiums through Medicare managed-care plans known as "Medicare Advantage" plans. The competition among plans also has driven the average monthly premium down to $32 from $37.

Discounts on medications negotiated by insurers are expected to save 15 percent in 2006 and to peak at 25 percent in 2011, Medicare estimates.

Each of Medicare's 34 program regions will have at least 11 and as many as 20 organizations offering drug plans. Medicare Advantage plans offering drug coverage will be available in every state except Vermont and Arkansas. Thirty-seven states will offer coverage through new Medicare preferred-provider organization plans, in which a defined network of health providers offers enrollees discounted services.

The companies that will offer nationwide coverage plans are: Aetna Life Insurance Co. of Hartford, Conn.; Connecticut General Life Insurance Co., also of Hartford; MemberHealth Inc. of Solon, Ohio; PacifiCare Life & Health Insurance Co. of Laguna Hills, Calif.; SilverScript Insurance Co., a subsidiary of Caremark, Rx, Inc. of Nashville, Tenn.; Unicare, a Chicago-based subsidiary of Wellpoint Inc.; United HealthCare Insurance Co. of Minneapolis; WellCare Health Plans Inc. of Tampa, Fla.; and Medco Health Solutions Inc. of Franklin Lakes, N.J.

The premiums and co-payments will vary, but all plans must cover at least two drugs in each medication class. Details and features of the various plans will be available Oct. 1 when a national advertising campaign begins. Open enrollment in the plans begins Nov. 15 and the benefit takes effect Jan. 1. Those who enroll in plans after May 15, 2006, will be penalized by paying higher premiums.

Medicare will begin mailing 41 million handbooks this week to inform enrollees about the new benefit, how to enroll and whether they should. Those with employer- or union-sponsored drug coverage will receive letters from their plans explaining how the new benefit will affect their coverage.

For more information about the drug benefit, call 1-800-MEDICARE or visit the Medicare Web site at www.medicare.gov/medicarereform/drugbenefit.asp

For more information about the plan offerings in your state, visit www.cms.hhs.gov/map/map.asp

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