1. Ramón Castellblanch, PhD Senior Action Network California Alliance of Retired Americans Joint Informational Hearing Medicare Prescription Drug Coverage February 1, 2006

2. Basic Problem With Part D Is Private Insurers Medicare is back to heavily depending on the managed care industry. Medicare is back to heavily depending on the managed care industry. A part of how some insurers profit is by not paying claims. A part of how some insurers profit is by not paying claims. Just as they did under Medicare Plus Choice, some MA-PD plans are likely to take advantage of Medicare to try making profits. Just as they did under Medicare Plus Choice, some MA-PD plans are likely to take advantage of Medicare to try making profits.

3. Current Part D Problems Are Typical of Private Insurers Dual eligibles often couldn’t get 30-day supplies of the medicines they had been taking Dual eligibles often couldn’t get 30-day supplies of the medicines they had been taking Dual eligibles were overcharged for drugs Dual eligibles were overcharged for drugs MA-PD Plan phone lines were often overwhelmed MA-PD Plan phone lines were often overwhelmed Eligibility was often difficult to establish Eligibility was often difficult to establish Pharmacies often had a difficult time working with plans Pharmacies often had a difficult time working with plans

4. Problems Can Be Expected To Persist It is likely that some MA-PD plan prior authorization processes will not be properly run. It is likely that some MA-PD plan prior authorization processes will not be properly run. Some beneficiaries will not utilize them. Some beneficiaries will not utilize them. Some beneficiaries and administrators will be overloaded trying to implement these processes. Some beneficiaries and administrators will be overloaded trying to implement these processes. Some MA-PD plans may not conduct the prior authorization process in good faith. Some MA-PD plans may not conduct the prior authorization process in good faith.

5. Seniors Who Are Not Dual Eligibles May Also Face Problems They may mistakenly choose MA-PD plans that do not cover their drugs or may choose MA-PD plans that later discontinue coverage for their drugs. They may mistakenly choose MA-PD plans that do not cover their drugs or may choose MA-PD plans that later discontinue coverage for their drugs. They may mistakenly choose MA-PD plans that do not use pharmacies that they can reach. They may mistakenly choose MA-PD plans that do not use pharmacies that they can reach. They may be subject to deceptive advertising soliciting enrollment. They may be subject to deceptive advertising soliciting enrollment.

6. California Needs An On-going Part D Relief Program It could be built on the program providing certain drugs not covered by Part D It could be built on the program providing certain drugs not covered by Part D We should consider seeking SPAP status for the program. We should consider seeking SPAP status for the program. Were SPAP granted, the state could get Medi-Cal prices for drugs in this program. Were SPAP granted, the state could get Medi-Cal prices for drugs in this program. It could get Medi-Cal prices for drugs for which our Part D relief program is not reimbursed. It could get Medi-Cal prices for drugs for which our Part D relief program is not reimbursed.

7. To Maximize Effectiveness of a Part D Relief Program The program should be retroactive to January 1. The program should be retroactive to January 1. The state should publicize its program to beneficiaries, pharmacies, and others providing back-up to the Part D program. The state should publicize its program to beneficiaries, pharmacies, and others providing back-up to the Part D program. The necessary aid to help California’s use its Part D relief should be provided in all the languages commonly needed by Californians. The necessary aid to help California’s use its Part D relief should be provided in all the languages commonly needed by Californians.

8. Get Tough with Deadbeat MA-PD Plans The state should look for whatever leverage it has over them. For example, if deadbeat plans are paid by any other California program, we could collect off of that program. The state should look for whatever leverage it has over them. For example, if deadbeat plans are paid by any other California program, we could collect off of that program. The state should publicize the deadbeats to seniors considering Part D enrollment. The state should publicize the deadbeats to seniors considering Part D enrollment. We should pressure our federal delegation to punish deadbeat plans. We should pressure our federal delegation to punish deadbeat plans.

9. Get Dual Eligibles Into Plans That Cover Their Drugs. The state should identify which MA-PD plans provide the best coverage. The state should identify which MA-PD plans provide the best coverage. It should finance the counseling of Part D participants to exercise their options to re- enroll and choose insurers likely to pay for their medicines. It should finance the counseling of Part D participants to exercise their options to re- enroll and choose insurers likely to pay for their medicines. It should provide communication in all languages commonly needed by Californians. It should provide communication in all languages commonly needed by Californians.