Washington, D.C. (September 13, 2006) — Lower premiums, lower out-of-pocket costs and a wider selection of prescription drugs were key features of plans chosen by most beneficiaries who enrolled in the Medicare prescription drug benefit in 2006, according to a new study released by the Pharmaceutical Research and Manufacturers of America (PhRMA).

The analysis of the plans chosen by approximately 18 million beneficiaries was conducted by The Lewin Group. Because the study takes into account the number of beneficiaries enrolled in each plan, analysts say it provides the most complete picture to date of how the Medicare prescription drug benefit actually is working. This is particularly important because beneficiaries have disproportionately chosen to enroll in some plans, while other plans have little enrollment, they added.

“Medicare beneficiaries who enrolled in a prescription drug plan have proven to be savvy consumers,” said Ken Johnson, senior vice president of PhRMA. “Taking full advantage of the diverse options, many have chosen plans that limit the amount of money they have to pay out of pocket, but still offer a wide array of drug choices. Beneficiaries are seeking the best bang for their buck when it comes to their prescription drug coverage.”

The Lewin analysis found that beneficiaries who have voluntarily enrolled in Medicare prescription drug-only plans and Medicare managed care plans chose plans with lower monthly premiums — $6 less, on average. Additionally, over half of enrollees in prescription drug-only plans chose plans without a deductible and opted for lower cost options among such plans.

Importantly, beneficiaries also chose plans with formularies that offer nearly 400 more drugs than the average plan, and they opted for plans with fewer restrictions on drug utilization, such as prior authorization and step therapy.

According to the analysis, the four plan sponsors with the highest enrollment — accounting for 64 percent of all beneficiaries — also had below-average complaint rates from enrollees. A recent Kaiser Foundation survey bolsters this finding, showing that 81 percent of seniors who are enrolled are satisfied with the new Medicare program.

“Millions of Medicare beneficiaries who previously had no prescription drug coverage now have comprehensive coverage,” Johnson added. “Beneficiaries are choosing prescription drug plans that meet their individual health and financial needs. The new Medicare prescription drug benefit is working well.”

 Read the Lewin Beneficiary Choices Study (214.24 KB)