WASHINGTON -- Does Obama's new healthcare plan affect seniors on Medicare? A new analysis says it does. As part of the overhaul, Medicare is trying to try to make it simpler for consumers to pick drug coverage, but these efforts could actually force 3 million seniors to switch plans next year whether they like it or not, says an independent analysis. That risks undercutting President Barack Obama's promise that people can keep their health plans if they like them.
And it could be an unwelcome surprise for many seniors who hadn't intended to make a change during Medicare's open enrollment season this fall.
The analysis by Avalere Health, a leading private research firm, estimated that more than 3 million beneficiaries will see their prescription plan eliminated as part of a new effort by Medicare to winnow down duplicative coverage and offer consumers more meaningful choices.
Seniors would not lose coverage, but they could see changes in their premiums and copayments.
Medicare officials dismissed the Avalere estimate without offering their own number. "Anybody who is producing that kind of analysis is simply guessing," said Jonathan Blum, deputy administrator for Medicare.
But Bonnie Washington, a senior analyst with Avalere, said the company's analysis used Medicare's specifications.
For example, Medicare has already notified insurers they will no longer be able to offer more than one "basic" drug plan in any given location. Several major prescription plans, including CVS-Caremark and AARP, offered two basic options throughout the country this year, Washington said. Eliminating that particular form of duplication among the top plans would force 2.75 million beneficiaries to find new coverage, according to Avalere's estimate.
When other changes are taken into account, as many as 3.7 million Medicare recipients may have to switch, the analysis concluded. That amounts to about 20 percent of the 17.5 million enrolled in stand-alone drug plans.
Avalere serves industry and government clients with in-depth research on Medicare and Medicaid. The company's president was a health care budget analyst in the Clinton White House.
Former Medicare administrator Leslie Norwalk said the change might make things easier for people signing up for Medicare but harder for those already in the program.
"If you're in a plan that you like and you have to change it, it will be disruptive," said Norwalk, acting administrator under President George W. Bush. "It depends on how (Medicare) handles it to try to make it as seamless as possible."
Reducing the number of Medicare drug plans has long been a goal for consumer advocates. This year, nearly 1,600 plans offered a dizzying range of options, many of which were not significantly different.
But Medicare is going ahead with the consolidation in a hard-fought election year. Republicans have barraged seniors with charges that Obama and the Democrats raided the program to expand coverage for younger generations under the health care overhaul. Obama's promise that people can keep health plans they like was made in the context of that broader debate, but the president has repeatedly assured seniors their Medicare benefits are safe.
"Some opponents of the (health care) law may say that this is taking away choices, but we have heard from our members for years that the (drug coverage) options can be confusing," said Nora Super, AARP's top health care lobbyist. The seniors lobby supports the change. AARP's public policy branch is separate from its business side, which sponsors Medicare and other insurance plans.
Medicare official Blum said the agency is working with insurers to keep disruptions to a minimum. For example, seniors could be automatically reassigned to a comparable plan offered by their insurance company. Premiums may not necessarily be any higher, Medicare officials said.
"We are not reducing the number of (insurers). We are not reducing the number of quality plans," said Blum, adding that having fewer, more distinct choices will benefit seniors. "That puts beneficiaries in a stronger, rather than weaker position."
Besides eliminating duplicative basic coverage, insurers that offer more than one enhanced coverage plan will have to show they are clearly different.
Medicare is expected to release its list of drug plans for 2011 late next month. Instead of 40 or more choices in each state, seniors may have around 30 plans to pick from.