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Skriven 2005-08-29 23:36:50 av Whitehouse Press (1:3634/12.0)
Ärende: Press Release (0508299) for Mon, 2005 Aug 29
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Press Briefing by Conference Call with Dr. Mark McClellan
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For Immediate Release
Office of the Press Secretary
August 29, 2005

Press Briefing by Conference Call with Dr. Mark McClellan



4:05 P.M. EDT

DR. MCCLELLAN: Thank you all for joining us this afternoon. As you know,
today the President announced that Medicare beneficiaries will have choices
for their prescription drug coverage that will cost less, and they include
options that offer more benefits than originally expected. If you don't
have it already -- and you all usually get these things quickly -- the
information on these announcements is available on our web site at
CMS.HHS.gov. There is an overall press release; there are specific fact
sheets for availability of low-cost plans and additional benefit plans in
each region of the country, and there are some more details about the
availability of zero premium plans for people with limited incomes.

This is great news for people with Medicare. They will be able to choose
prescription drug plans costing $20 a month, or even less, while still
getting medically necessary treatments and prescriptions at convenient
pharmacies.

Competition among the drug plans is working to drive down prices for the
coverage and for the prescription drugs that seniors and people with
disability need. Medicare beneficiaries will be able to choose from at
least one prescription plan with premiums below $20 a month in every part
of the country, except Alaska. In many regions of the country, the premiums
are likely to be significantly below $20, and all regions have multiple
plan options with premiums significantly below $30 a month.

In every region of the country, prescription drug plans will have zero
deductibles, as well as plans with deductibles that are lower than
Medicare's standard $250 annual deductible. That means people will have
options that start helping them pay for their drugs with the first
prescription they buy.

Also, in every region of the country, plans will be available that offer
coverage in addition to Medicare's standard plan. This includes help for
beneficiaries with costs beyond $2,250 in drug spending, and before their
out-of-pocket costs hit $3,600 a year. Those are the basic features of the
Medicare standard benefit, and, in other words, that means that some
options will be available that provide additional coverage within this gap
in Medicare standard benefits. For example, some plans will cover generic
drugs through this coverage gap.

So, as you can see, prescription drug coverage is going to be broader than
many people expected, it's going to be less expensive in terms of the
options available and many people expected. Medicare beneficiaries will be
able to choose plans with lower deductibles, broader coverage. And that
means that seniors and people with a disability will have options to find a
plan that best fits their individual needs. And we are going to be working
very hard to make sure that people can get a good fit. We are working
around the country, as the President mentioned today. In addition, we're
collaborating with any organizations inside and outside of the federal
government to make sure that we're reaching seniors and the people who care
about them, where they live and work and play and pray.

Thank you all again for joining us. And I'm going to stop now and take
questions. I'd ask you to identify yourself before or when you ask your
question. Thank you.

Q Hi, Dr. McClellan. Just to clarify something; when you say that the
premiums are lower than expected, are you referring to the $32.20 that was
stated earlier this month, the $20 lower than that? Or is there some other
figure you're comparing it to?

DR. McCLELLAN: Tony, we're not making any new estimates of what the average
premium will be next year nationwide. And that $32.20 that you mention,
that's an estimate that we announced several weeks ago based on the actual
plan information that we're seeing.

Previously, the estimates from the independent experts were based on
projections or expectations. Now we have actual data based on how the
Medicare program -- how the Medicare drug benefit will work in 2006. And we
are seeing a robust, competitive response, and that means that costs are
coming in lower than expected.

We did release today some state-by-state estimates of the average premium
and they range a bit around $32. So in some states, for example, I'm
visiting Arizona and California with the President today -- the average
premium is expected to be lower than $32.20. In Arizona, it's around $28.
In California, it's less than $26. But the main new thing that we're
announcing today is that, as we've continued our review of the prescription
drug plans, it has become clear that there will be plan options available
that are significantly less expensive than this average. We're not issuing
a new average; we are simply making information available on the specific
drug plans that will be offered around the country. All over the country,
there will be plans that cost less than $20 a month, many options that are
less than $25 or $30 a month, those significantly below that average that
we announced earlier.

Q Hi, Dr. McClellan. You have released a number of plans that are below $35
in each region. Can you tell us, generally speaking, how many plans total
there are in each region, and why you didn't release that together with the
lower price --

DR. McCLELLAN: Yes, we are still finalizing our negotiations with many of
the plans, particularly plans that are offering some of the higher premium
levels. And so we don't have any final numbers at this point on the number
of total options that will be available. We have released today the
estimated number of organizations that are going to be participating in
prescribing the drug coverage around the country, and in each region of the
country, there will be between 11 and 23 organizations offering stand-alone
prescription drug coverage.

But as I said, we are continuing our negotiations with the specific plans
to make sure any plans that are offered provide a real value to some of our
beneficiaries, that it's a valuable choice. So, for example, there will be
options that include additional benefits; there will be options that
include no or low deductible; and then, obviously, there are going to be a
number of options that have lower premiums average.

So I don't have any final number on the total amount of plans that will be
available, but we are on schedule with our negotiations with the drug
plans. We expect to finalize the contracts by around mid-September, and we
will make available additional specific information in the coming weeks.

Q Just -- like in one region, you have 22 plans -- I think it's New
Hampshire, Maine -- you have 22 plans that are below $35, and the average
premium is $35, around $35. I mean, the way I -- just doing the math,
wouldn't you expect to see about 22 plans above $35, just to get to that
average?

DR. McCLELLAN: No, not necessarily. Many of the plans that are below the
average may be plans that have relatively high rates of enrollment -- for
example, some of the existing Medicare Advantage plans that are very
popular in some parts of the country. And the estimated premiums are based
on our overall review of all of the plan options that have been submitted.

Again, we're not at a point where we've approved a number of specific drug
plans. We are getting very close to that point, so that's why we can
provide some additional details now. At the higher premium levels, I expect
there may be some plans that because of the competitive situation, decide
that they're not going to actively market. But we'll see, as we conclude
these negotiations over the next few weeks.

Q Dr. McClellan, I just wanted to clarify one thing. In the press release
that went out, or the advisory about this conference, it was said that this
would be on background --

Mr. KARR: No, it's on the record, Larry.

Q I just want to make sure that everybody understands that this is on the
record -- is that correct?

Mr. KARR: I was about to interrupt with that when I heard you come in. So
we're on the record.

Q Okay, thank you.

DR. McCLELLAN: Thanks for that, Larry.

Q Hi, thank you. Two questions. First a clarification. Is there a plan with
a premium in Alaska that's below $20 a month?

DR. McCLELLAN: No. Alaska is one state that does not look, at this point,
like it's going to have a plan with a premium below $20. There are a number
of plans in Alaska that will be available with premiums significantly below
$30 -- the chart that we put out with the press release, Alaska is region
34, and we're expecting around four plans with premiums in the $20 to $25
range, four more with --

Q Another question I had was, as beneficiaries see the different options
available in different parts of the country, as they talk to their friends
and that type of thing, what would be your response to those people who
say, it's not fair that I'm here in Alaska paying $28 a month or $30 a
month --

DR. McCLELLAN: Well, in every region of the country, there are plans that
are going to meet Medicare standards -- very far along in the -- process --
that offer the drug coverage at a lower than expected cost. And that means
that no matter where you live, if you look, if you spend a little bit of
effort figuring out which plan is a good fit -- and again, we'll be there
to help you -- you can find a plan that is inexpensive. It's much less
expensive that people expected.

In Alaska, where many things are considerably more costly, there are going
to be plans in the neighborhood of $20. In other parts of the country, it's
even less expensive than that. In all parts of the country, this is
significantly lower pricing than people had expected when the benefit was
set up. And that's really the advantage of having choices. The drug plans
know that if they're not offering a really good value, meaning low prices
and the coverage that people want from additional benefits, people are
going to go elsewhere.

Q One more thing. Is there anybody, any beneficiary out there who shouldn't
sign up for the drug benefit?

DR. McCLELLAN: There are many people who have employer coverage right now
who will get their coverage through their employer. You may have seen
surveys, a number of people saying they weren't planning to enroll. Well,
most of those are people who said they're already happy with the employer
coverage that they have now. And what those employers are generally doing
is taking new subsidies from Medicare to make that coverage secure.

Q So unless you already have employer coverage and it's continuing, you're
saying, sign up --

DR. McCLELLAN: Definitely take a close look. As the President said today,
it's worth taking a look. The numbers that we are seeing from the actual
plans that will be offered show that people can get coverage that, on
average, will pay out to around $1,200 a year for under $20 or $25 a month.
That's worth taking a look at.

Q Mark, putting on your economist hat, do you have any sense as to how much
of this downward pressure on the pricing is, in fact, related to the
insurance competition, as distinct from the efforts to negotiate lower
prices with the pharmaceutical companies? Or is there any way to discern
what is really driving the prices down?

DR. McCLELLAN: Good question, Susan. I think both of those go together.
Because there is strong competition among the drug plans, the drug plans
know they need to be very aggressive in their pricing, and that means ones
that are able to do the best job of pushing down prices through volume
negotiations with the drug manufacturers are going to be able to offer the
coverage at a lower premium. The plans that will be available have to meet
all of Medicare's standards. That includes standards for covering all
medically necessary treatments; it includes standards for actuarial
soundness of the plans. So the only way you're going to be able to get
prices way down is by being very aggressive with the drug prices that you
negotiate with manufacturers.

Q And is it your sense that those offering the plans across-the-board are
getting those lower prices, or what?

DR. McCLELLAN: Well, there are going to be drug plans with a range of
premiums available. I think one of the earlier callers pointed out some of
the plans will have premiums that are significantly higher. So it's not
clear to me at this point that all of the plans are being very aggressive
with their price negotiation, but it is getting pretty clear that many of
them are pricing very aggressively. That includes getting prices down from
manufacturers.

Q And just one other quick question. There was a reference in the press
release to the final review of the plans' evaluating factors, including
whether there is adequate access to drugs and pharmacies convenient to
homes of beneficiaries. Is that, itself, raising its head as a significant
problem?

DR. McCLELLAN: We're seeing most plans meeting the pharmacy network
standards. Certainly for retail pharmacies -- are very important, but we're
also looking closely at other kinds of more specialized pharmacies, like
long-term care pharmacies, so-called home -- pharmacy services. And we're
spending a little bit extra time making sure that the plans are
well-covered in all those areas. But the numbers that we're putting out
today reflect a review of pharmacy network requirements that is also very
far along.

Q And plans that have already met those standards?

DR. McCLELLAN: Right. We're not quite finished, but we're getting very
close, so we're getting a clearer and clearer idea of what the options will
be for seniors -- and we want to pass that information along as soon as it
is clear.

Q Mark, one of the concerns that people have about this is there are
actually too many choices, and that seniors will be overwhelmed with all of
these decisions they're going to have to make. Can you give us some
specifics about what you're going to do to help people navigate all of
this?

DR. McCLELLAN: That's a good question, Howard, and over the next month
we'll be talking more about this. The tools available to help beneficiaries
come on online, they come over the phone, and they come in face-to-face
help that people can get in their own community. We're not only targeting
beneficiaries with -- tools, but we're also targeting their family members,
the health professionals that work with them, counselors, advisors and
others they depend on for their financial and health decisions already
today.

Just to give you an example, we've been working on a tool that people can
access online at Medicare.gov. It will be available in mid-October that
will enable them to use information from the Medicare program about their
status -- for example, whether they're already on Medicaid or something
like that, and about their prescription drug needs and preferences for
formularies and other -- or preferences for pharmacies and other factors
that are important to them to identify a very small number of plans that
are a very good fit based on their particular needs. That kind of
information will be available online. And we're in the process of getting
public feedback on it right now. There have been data test versions up on
our website that have been reviewed by many -- experts over the last --
over the past month.

We're also going to have similar kinds of tools available for people who
call us at 1-800-MEDICARE, our customer service line. Most of our
beneficiaries don't go online, but that's okay. They can also get help over
the phone.

And then as the President mentioned today, we've been spending a lot of
time going around the country to establish partnerships with many local
organizations that already help seniors and people with a disability and
those who care about them, make important decisions about health benefits
and finance -- include state health insurance assistance programs that
provide local one-on-one counseling all over the country. They include
local area agencies on aging that have long helped seniors get assistance
with meeting their health care needs -- face-to-face help, includes
organizations like the Salvation Army that was represented on stage with
the President today. Many church groups, many community organizations, all
participating in the effort to help people make an informed decision about
coverage.

So there will be choices. But as you can see from the information that
we're releasing today, many of those choices are enabling people to get the
coverage they need at a much lower cost than had been expected. That's why
it's important for us to partner with seniors to help them take a look at
this coverage and get a good fit. It helps us keep the costs down; it helps
seniors get the benefits they need; it helps make sure Medicare is staying
up to date as affordably as possible.

Q One other quick factual thing. Do you expect to -- still expect to have
-- to be able to approve these plans by mid-September?

DR. McCLELLAN: We are on schedule with the implementation of the drug
benefit, so we are expecting to send out contracts in the coming days and
to get those contracts generally resolved by mid-September. And as we soon
as we've got that process complete and been able to pull together all the
numbers and factual information for plans, we'll have even more specific
information out, ahead of when beneficiaries will be able to make a
decision --

Q So will we be able to get specific information about specific plans after
September 15th?

DR. McCLELLAN: That's exactly what we're planning to do as soon as
possible. Now, obviously, the specific plans can't start marketing until
the beginning of October, and we don't want to do anything that would
amount to letting some specific plans really jump the gun on that time
frame. But we do intend to provide a more -- an even more comprehensive
summary of what -- of the plans that will be available before marketing
begins in October, as well as giving -- making sure beneficiaries and all
of you know about the tools that are available, or that will be available,
to help people choose among the plans and get their drugs needs met at the
lowest possible cost.

Q Hi, Dr. McClellan. Thanks very much for this opportunity. I have two
quick questions. I wasn't able to look at the -- to find the spreadsheet on
the state averages or the regional averages, but can you tell me what's the
average in Ohio for the monthly premium and --

DR. McCLELLAN: Sure, Susan. The average --

Q And -- I'm sorry -- and generally, why is it more or less than other
regions, than California, for example?

DR. McCLELLAN: That's a good question. Ohio has a weighted average premium
that we're expecting to be around $32.90, so it's very close to the
national average overall. Ohio also has three -- we think about three plans
that will be available, with premiums under $20.

Q How many?

DR. McCLELLAN: Three plan options that will be available with premiums
under $20, and another 11 options that will be available with premiums
under $30 a month. And some of those options include extra coverage, like a
lower deductible or some additional benefits in the so-called coverage gap.
And again, as Howard asked me about, we will be providing even more
specific information in the weeks ahead as we get these contracts finally
resolved and all the details in place.

There is some variation in the weighted average premium from region to
region around the country. The numbers run from around -- a little bit
under $26 a month up to around $37 a month, in terms of the weighted
averages. One reason for that variation is that we count Medicare Advantage
plans based on their current Medicare Advantage enrollment. And there are
some states in the country where there's historically been much more
Medicare Advantage enrollment than others. California is one of them, and
that's one reason their weighted average premium is lower. The Medicare
Advantage plans are generally offering lower premiums for Part D coverage
and additional coverage beyond these Medicare benefits, just as they have
been doing for other benefits prior to now.

But in every region of the country, there will be prescription drug plan
options available that get down to that level of $25 or even below. And in
most cases, we'll have multiple options at that level. That's why it's
important to take a look at plans available in Ohio, where they will be
offering lower premiums than expected, and additional benefits.

Q And when you say that Medicare enrollment was one of the factors in the
weighted average, can you give me an example of other factors that you
used?

DR. McCLELLAN: Other factors are basically the distribution of premiums
offered by the prescription drug plans. Some of the prescription drug plans
have premiums that are significantly higher than this average, obviously.
And my guess is that when people take a close look, see how their benefits
can be met, that many will end up signing up for less costly plans. And
we're going to provide the support tools they need to make an informed
decision about whether those lower cost plans can meet all their needs.
They certainly are going to meet all the Medicare standards.

Q And just one last question. You're still negotiating with the plans and
these plans are not final, which is why you can't give us much --

DR. McCLELLAN: That's right -- these are approximate numbers. But we are
very far along in the negotiation process. The bids, the premiums for each
plan, those are essentially done. We are making sure that the plans are, in
fact, intent on marketing -- even if they have higher premiums, that all of
the pharmacy network requirements are met, not just for retail pharmacies,
but also for long-term care services. We are double-checking to make sure
all the actuarial financial requirements of the plans are met, and then
we're going to get the contract signed, and make sure that all the plans
have formally agreed to abide by Medicare's terms and conditions.

Q So will there definitely be between 11 and 23 plans available in each
region?

DR. McCLELLAN: There's 11 to 23 organizations offering plans in each
regions.

Q Organizations -- will there definitely be 11 to 23?

DR. McCLELLAN: Well, again, it's possible that one or a few may either pull
out or not meet all of our standards. I think we're putting -- we're
putting these numbers out because we are pretty confident that the final
numbers are going to look a lot like what we're showing you today. But I do
want to keep that caveat in place, that we haven't quite finished the
negotiations. I'm getting a lot of questions, obviously, about what kinds
of plan options will be available, and we're trying to pass along
information as it's ready.

Q Hi, Dr. McClellan. The press release also mentions plans that offer lower
or no deductibles, or some coverage in the gap. Are those type of plans
available for these prices --

DR. McCLELLAN: There will be some plans that offer enhanced coverage for
less than $30, I believe in just about every region of the country. The
coverage enhancements may be filling in the deductible, it may be providing
some coverage in the gap, it may be some combination.

In addition, there are some plans that are offering standard coverage, but
lowering the deductible. So they provide the same actuarial value of
coverage, but they spread it out, starting with the first prescription that
a beneficiary buys. And there are -- but what I've heard and what I think
the plans realize is that there are some beneficiaries who want, for more
predictability, want the coverage starting with the first dollar that they
spend, so to meet those beneficiaries' preferences, there will be plans
available in every region --

Q And these are stand-alone plans you're talking about?

DR. McCLELLAN: Yes, these are -- everything I'm talking about here, and
everything in the chart that we released today is for stand-alone plans
because, again, the Medicare Advantage plans, which are going to be very
widely available, generally have significantly lower premiums, so there
will be many Medicare Advantage plans in just about every region of the
country, with premiums under $20 for drugs. And many, if not most of these
plans, offer additional coverage beyond the --

Okay, thank you all very much.

END 4:31 EDT

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