Blue Cross and UnitedHealthcare offer Medicare beneficiaries Part D drug coverage rolled into a complete health insurance plan.

12:43 PM EST on Sunday, November 27, 2005

BY FELICE J. FREYER
Journal Medical Writer

Among all the bewildering choices for Medicare drug coverage, there are two plans that may prove especially popular among Rhode Islanders: BlueCHiP for Medicare, from Blue Cross & Blue Shield of Rhode Island; and Medicare Complete, from UnitedHealthcare of New England.

Officially known as Medicare Advantage plans, these are HMOs that provide everything that Medicare covers, and may add benefits beyond that -- sometimes, with no premium.

Medicare Advantage plans are different and separate from the standalone Part D drug plans, but several include drug coverage that is as good or better than a Part D plan. (People who choose Medicare Advantage with drug coverage can later, if they wish, switch to a standalone Part D plan without penalty.)

Currently, BlueCHiP and UnitedHealthcare enroll 33 percent of Medicare beneficiaries in Rhode Island, the highest percentage of Medicare HMO enrollment in the nation.

The insurers expect to keep these customers (17,900 for UnitedHealthcare; 40,000 for Blue CHiP) during the switchover to Part D, and hope to win over a few new ones in the process. They offer an option that many people find convenient and cost-effective, and the federal government has enhanced payments to these plans to encourage their growth.

"This Medicare Advantage world is going to become more attractive," said Jim Gallagher, Blue Cross' director of individual sales. "It's one plan, one card, and you have everything in it."

Medicare Advantage plans get a set amount of money per enrollee from the federal government, and then manage all health-care for that patient.

Managing sometimes means denying care that a patient wants, but the plan doesn't think is medically necessary. Sometimes, it means ensuring that needed care is not overlooked. Additionally, these plans control costs by limiting their networks of providers.

The introduction of Part D has brought about some changes that are important to understand, whether you are currently enrolled in these Medicare Advantage plans or are considering them.

A few key points:

* BlueCHiP and UnitedHealthcare are each offering a choice of plans -- those with drug coverage or those without drug coverage.

* If you want to enroll in BlueCHiP for Medicare or UnitedHealthcare's Medicare Complete, you cannot also enroll in a separate Part D plan.

* So if you want Medicare drug coverage, and you also want one of those HMO plans, you must choose the one with drug coverage.

In the case of BlueCHiP, the advent of Part D means that 9,900 subscribers who used to get unlimited coverage for generic drugs will now have to pay a premium, as well as higher copayments at the pharmacy counter.

These BlueCHiP subscribers, who were enrolled in the Standard plan, are one group that faces higher drug costs as a result of Medicare Part D. For most other Medicare beneficiaries who use prescription drugs, the program will result in savings.

BlueCHiP was forced to change because the federal government will no longer allow a Medicare Advantage plan to offer generic-only drug coverage. A plan can offer either no drug coverage, or the full array of drugs required under Medicare Part D.

The BlueCHiP Standard plan still has no premium. But now, it has no drug coverage. It can be a good option for those who have drug coverage through the Department of Veterans Affairs; a high-quality employer-sponsored plan; or other coverage that is at least as good as Part D coverage.

But you can't use BlueCHiP Standard along with a separate, standalone Part D plan.

BlueCHiP Standard customers who need drug coverage can enroll in BlueCHiP Standard with Part D. This plan has a $36 monthly premium. Its prescription copay has increased from $7 for generic drugs to $10; copays are higher for brand-name drugs.

Blue Cross & Blue Shield offers two other plans that also include the drug benefit: BlueCHiP Plus, with a $79-a-month premium; and BlueCHiP Preferred, which costs $154 a month.

BlueCHiP Preferred includes something new: an out-of-network medical option. If you use providers out of the network, you pay the first $250 out of pocket. After that, you pay 20 percent of costs, with a $3,000 maximum. With BlueCHiP Preferred, the drug, hospital and nursing-home copays, and the out-of-pocket maximum, are all lower than for the other BlueCHiP plans.

UnitedHealthcare is offering two Medicare plans, both without premiums: Medicare Complete Rx, which includes Part D drug coverage; and Medicare Complete, with no drug coverage.

"We are the only zero-premium Medicare Advantage plan in Rhode Island that incorporates a prescription-drug benefit," says Brandon Lau, United's executive director for Medicare programs. "We've been offering a zero-premium plan since late 1996. . . . When other plans have gone to premiums, UnitedHealthcare has not."

In choosing an HMO, these are among the key issues to consider. They're all interrelated, and all require your attention:

* The premium. This is your monthly charge , but not your only cost. You pay the premium whether or not you use any health care. The lower the premium, the higher the other outof-pocket costs, so you need to weigh the trade-offs.

The BlueCHiP Standard plan has no premium, but it doesn't have drug coverage. UnitedHealthcare offers a zero-premium plan that does include drugs, but some of the out-of-pocket costs are higher.

* The copays. These are the payments made at the time you get a service: the money you pay the pharmacist when you pick up a prescription, or the doctor after an office visit. These fees can be hefty -- $250 or more per day for hospital stays, for example.

* The out-of-pocket maximum. This is the limit on how much you will have to pay for certain medical services (it doesn't apply to drugs). Once you've spent this maximum within a calendar year, you're fully covered for those services for the rest of the year.

Most people don't reach the maximum -- but you should be aware of it, because if a medical disaster strikes, you could end up paying that much.

For example, BlueCHiP Standard and BlueCHiP Standard with Part D have a $2,500 out-of-pocket maximum, which applies to inpatient hospital days, inpatient mental-health care and nursing-home days. It also has a $265-a-day copay on inpatient hospital care. You'll be paying that copay for up to 10 days; if you need more hospital days in the same year, you won't pay anything.

In contrast, UnitedHealthcare's Medicare Complete Rx has a $4,200 out-of-pocket maximum. With a daily hospital copay of $265, you'd have to spend 17 days in the hospital during one year before you'd have full hospital coverage. But this plan has no premium -- an example of the trade-offs you have to make.

* The network. HMOs control their costs by contracting with limited networks or providers -- winning discounts from them in exchange for the promise of a higher volume of customers. If you join an HMO, it will pay for care only for the doctors, pharmacies, laboratories and others in its network.

UnitedHealthcare and BlueCHiP both say they have large networks encompassing most providers. Both do have contracts with all the hospitals in the state. But check the provider list to make sure that the providers you prefer are included, and find out what happens if you need care out of state.

Also, though the doctor networks tend to be broad, your choices may be more limited for durable medical equipment and laboratory services.

* The drug coverage. If you're choosing a plan that has prescription-drug coverage, you need to vet that aspect just as you would a Part D plan -- looking at which drugs are covered, which pharmacies are allowed, how much the copays are, and whether there's coverage after you've spent $2,250 (the so-called coverage gap or "doughnut hole"). The good news is, you won't have deductibles with Medicare Advantage plans.

* Access to specialists. BlueCHiP requires a referral from your primary-care doctor before you can see a specialist. UnitedHealthcare does not require a referral.

* The extras. What does the plan offer that isn't part of traditional Medicare? Does the plan cover hearing aids, vision care, dental care or fitness programs?

MEDICARE D RESOURCE: Browse Journal coverage on the changes in Medicare D, including Neil Downing's MoneyLine columns, at:

http://projo.com/extra/2005/medicare/