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Seniors miss best deal on drug plans

3/10/2009 © Florida Health News

How good are Medicare beneficiaries at shopping for the best deal in insurance coverage, given a large array of choices?
Not very, according to a study that has significant implications for Florida because of the staggering number of choices here.

Florida had more drug plans last year than all but two other states and more Medicare Advantage health plans than all but one, according to State Health Facts. It came in third in the number of “special-needs plans,” aimed at coverage for low-income or disabled beneficiaries.

For 2009 coverage, a Medicare Web site shows, Florida Medicare beneficiaries who wanted drug coverage had to choose from among 54 plans, each with its own formulary, deductible, co-pay, premium, and so on. Enrollment for drug plans ended Dec. 31.

Florida also has 253 Medicare managed-care plans this year, although not all are available in any one county. Miami-Dade has 62 health plans and 24 special-needs plans, more than other counties, but even sparsely populated rural areas have plenty of choices. Enrollment in the health plans continues through March 31.

In the study of the effects of so much choice, MIT economist Jonathan Gruber looked at 55,000 seniors who had at least one claim after enrolling in a drug plan in its first year, 2006. The study, sponsored by the Kaiser Family Foundation, used pharmacy claims and premium and cost-sharing information.

It found only 6 percent chose the lowest-cost plan in their area; only 10 percent chose one of the five least expensive plans.

The 94 percent of enrollees who missed getting the lowest-cost plan would have saved an average of $520 apiece had they found it, the author calculated.