After promoting the wide choices available to the elderly and disabled for Medicare drug coverage, the Bush administration is now considering limiting those options.
In a 39-page memorandum to insurers, employers and others administering the drug benefit, the Centers for Medicare and Medicaid Services asked for advice on how to simplify the program in 2007.
The agency proposed limiting to two the number of drug plans that a company can offer per region. Many insurers now offer three, and since there are often more than a dozen insurers per region, consumers often have more than 40 choices.
The agency also said it expects that the two plans must have meaningful differences to make comparisons easier.
Spokesman Gary Karr said Friday that the proposals do not indicate that the agency now agrees with critics who say the various options are paralyzing beneficiaries as they evaluate prescription drug coverage.
"It's simply asking for comment," Karr said. "Earlier, there were predictions we would not have enough plans. That's clearly not the case now. The question is will it still be of service to beneficiaries if you had fewer. Again, it's not a commitment."
Rep. Pete Stark, D-Calif., a frequent critic of the program, gave the agency credit for seeking to simplify the plan.
"It is too bad this recognition comes 2 1/2 years after passage of the law, and two months into implementation," Stark said.
About 42 million senior citizens and the disabled are eligible to enroll in a private plan that is designed to subsidize some of their prescription drug expenses. Most of the larger insurers give beneficiaries more than one option. For example, one company will offer a plan that charges consumers less, but the trade-off can be a more limited choice of drugs. Another plan will offer more drug coverage, but the customer will have to pay higher premiums.
The range of plans available vary by region. In Alaska, there are 11 insurers offering 27 drug plans. In Pennsylvania, there are 23 insurers offering 52 plans.
Beneficiaries also can choose from more comprehensive medical coverage, called Medicare Advantage, which operates like an HMO. Most beneficiaries around the country can choose from more than a dozen Medicare Advantage plans.
In a hearing last month, lawmakers on the Senate Finance Committee sparred on whether senior citizens are confronted with too many options. Sen. Orrin Hatch, R-Utah, said the competition drives down costs. Sen. Max Baucus, D-Mont., said people found the program so confusing they decided not to sign up.
Advocacy groups critical of the program said that limiting companies to two plans per region would not narrow choices enough. Nor would it ensure that the insurers had enough customers to give them enough clout when negotiating with drug manufacturers for lower prices, they said.
"Two lousy choices is no better than seven lousy choices," said Diane Archer of the Medicare Rights Center.