UnitedHealth Group on Tuesday said that 2007 enrollment in its Medicare prescription drug plans would not be negatively affected by delays in informing some enrolled beneficiaries of changes to its plans, CQ HealthBeat reports. About 4% of the 4.5 million Medicare beneficiaries enrolled in UnitedHealth's prescription drug plans in 2006 did not receive timely information about benefit and cost changes for the 2007 plan year, UnitedHealth spokesperson Dominick Washington said (Reichard, CQ HealthBeat, 1/2). Federal officials had told UnitedHealth and other private insurers that sponsor Medicare drug plans that they had to send "annual notice of change" documents to beneficiaries by Oct. 31, 2006. CMS announced last week that UnitedHealth, one of the largest sponsors of Medicare drug plans, and possibly other insurers did not send the documents on time. A total of about 250,000 beneficiaries were affected and will have until Feb. 15 to make changes to their drug plans, according to acting CMS Deputy Administrator Herb Kuhn (Kaiser Daily Health Policy Report, 1/2). Kuhn said CMS officials are considering whether they will assess penalties on insurers that did not meet the deadline. Washington said UnitedHealth projects that its 2006 enrollment of about 4.5 million beneficiaries will increase by 500,000 to 750,000 in 2007. He said the delays in mailing the notice of change information resulted from a "combination of factors," including the "sheer volume" of documents the insurer needed to send (CQ HealthBeat, 1/2). Incoming Senate Finance Committee Chair Max Baucus (D-Mont.) in a statement said, "It is unacceptable that a number of drug plans failed to uphold their fundamental responsibility to give this notice to Medicare beneficiaries." He added, "We need to make sure that folks are getting all of the information that they need to make decisions during the open enrollment period." Baucus said that he plans to pursue changes that would make the drug benefit "more consistent and simpler for seniors to use" (Young, The Hill, 1/3).

Humana
In other Medicare news, the Boston Globe recently examined how monthly premiums for Humana's lowest priced Medicare prescription drug plan will increase an average of 60% nationwide. Monthly premiums for the plan -- Humana Standard, which had 2006 nationwide enrollment of more than two million -- will increase 466% in seven Midwestern and Western states, although the premiums will decrease in three states. According to the Globe, some advocates and analysts maintain that the insurer "kept its prices low in 2006 to gain market share." David Shove, an analyst at Prudential Equity Group, said, "You have to state the obvious. You sell something cheaply and get a lot of customers, and then you raise the price to improve profitability." Steve Findlay, a health care analyst at Consumers Union, said, "That's not an acceptable inflationary increase in prices," adding, "That's sucker them in and you just start raising the prices." Humana spokesperson Chris Curran last week said the premium increase is the result of the formula used by CMS to determine the subsidy the government pays private insurers who sponsor Medicare drug plans. However, Paul Spitalnik, a CMS actuary, last week said, "If a plan wanted to have a lower-priced competitive product, they needed to have a lower bid than they did for 2006 plans" (Krasner, Boston Globe, 12/31/06). Humana said that much of the increase in premiums was the result of Medicare's formula for subsidies under the drug benefit, according to the Globe. Humana spokesperson Tom Noland this week said that the insurer's 2007 premiums "ended up being higher than what we bid." He added, "The fact is that the premium prices that eventually appear on the government Web site are actually set by the government, and not by the individual health benefits companies." Boston Mayor Thomas Menino on Tuesday called for an investigation into Humana's pricing, calling the premiums a "bait-and-switch" tactic. In addition, Sen. Edward Kennedy (D-Mass.), incoming chair of the Senate Health, Education, Labor and Pensions Committee, in a letter to acting CMS Administrator Leslie Norwalk said, "It is unconscionable that insurance companies should be allowed to raise their rates by 100%, 200% or even 400% after luring seniors into the program with artificially low rates" (Krasner, Boston Globe, 1/3).

2007 Enrollment
In related news, CMS officials recently said that a high volume of calls to the Medicare toll-free phone line and visits to its Web site demonstrate that many beneficiaries who were enrolled in the drug benefit in 2006 were evaluating their 2007 options, although most decided not to change plans, The Hill reports. From Oct. 15, 2006, through Dec. 27, 2006, the Medicare phone line received five million calls and its "Plan Finder" Web site received 30 million page views, CMS said. It is not yet clear how many beneficiaries signed up for plans, according to a CMS spokesperson. Kirsten Sloan, national coordinator for health issues at AARP, said, "I think you'll find that most Medicare beneficiaries did shop around." However, Robert Hayes, president of the Medicare Rights Center, said, "Most people seemed unable to bear a whole new examination this year." Hayes added that some beneficiaries might not learn of changes to their plans until it is too late to switch (The Hill, 1/3).

Broadcast Coverage
NPR's "Morning Edition" on Tuesday included an interview with David Wessel, deputy Washington, D.C., bureau chief at the Wall Street Journal, on the first year of the Medicare prescription drug benefit (Montagne, "Morning Edition," NPR, 1/2).

Audio of the segment is available online.