September 23, 2005

Ten firms to offer Medicare drug plans nationally

By Lisa Richwine

WASHINGTON (Reuters) - Ten companies have won U.S.
government approval to offer Medicare prescription drug
benefits to seniors across the nation starting in January,
health officials said on Friday.

Several firms and organizations also will offer other
options regionally. Residents of states such as Alaska will
have at least 11 options, while up to 20 choices may be offered
in larger states such as New York, officials said.

The companies that received approval to offer plans
nationally were Aetna Inc., Cigna Corp., Memberhealth Inc.,
PacifiCare Health Systems Inc., Caremark Rx Inc., Wellpoint
Inc., UnitedHealth Group and Wellcare Health Plans Inc.

The Centers for Medicare and Medicaid Services (CMS) later
announced Medco Health Solutions Inc. and Coventry Health Care
Inc. also were cleared to offer a nationwide plan.

Every state except Alaska will have at least one plan with
monthly premiums below $20, CMS Administrator Mark McClellan
told reporters. The average will be about $32 per month.

"The drug plans are offering better benefits at lower
prices than independent experts had predicted because they are
competing to serve everyone in Medicare. Drug plans know
beneficiaries don't have to sign up. It's a voluntary benefit,"
McClellan said.

Investors liked the news. The S&P Managed Health Care group
gained 1.87 percent to close at 485.16.

Medicare is the federal health insurance program that
covers 42 million elderly and disabled Americans. Officials
expect about 28 million to 30 million Medicare beneficiaries to
sign up for the drug coverage, citing Wall Street estimates.

Drug plan sponsors can start advertising them October 1,
and patients can begin signing up November 15.

Robert Hayes of the Medicare Rights Center, a consumer
group, said the large number of plans could cause confusion for
elderly patients.

"Consumers will be routinely paralyzed by the blizzard of
choices," he said.

Plans with premiums of less than $20 "will generally
translate into higher out-of-pocket costs" in other forms, such
as large co-payments, Hayes said. "I have some concern the
promotional activities ... are not fully disclosing the range
of information consumers need."

Medicare will start mailing information about the benefits
early next month, officials said. Patients also can seek help
from a Medicare Web site or toll-free telephone number
beginning in mid-October.

Some conservatives have suggested delaying the drug
benefits, projected to cost taxpayers $724 billion over the
next decade, to help pay for the recovery from Hurricane
Katrina. The White House and House of Representatives Speaker
Dennis Hastert have rejected that idea, as did McClellan.

Seniors "have waited too long for coverage that is up to
date. They have waited too long for coverage that can help them
stay well, help keep their costs down and help keep Medicare
costs down. This benefit is going forward nationwide,"
McClellan said.