Panels to consider 3 insurance models Hearing today on seniors prescription plan

AUGUSTA – A proposed state-run insurance program to cover senior citizens’ prescription drug costs will get a hearing today before two legislative committees.

Details of three models from which the program would be fashioned were discussed at an informational meeting of health care interests Wednesday.

The models were developed by Heinz Family Philanthropies at the request of Senate President Pro Tem Richard A. Bennett, R-Norway, who is sponsoring a bill to set up the new system. All three would create self-supporting insurance programs with co-payments, deductibles and monthly premiums based on a senior’s income beginning July 1, 2002.

Under each model the state would hire an outside firm to run parts of the program that would complement other prescription drug plans offered by the state.

At Wednesday’s meeting Bennett said he hoped health care representatives and legislators would take the recommendations and work together to find the best model to muster broad support in the Legislature this session.

Heinz is not new to such proposals. It created options for several other states looking to develop similar programs. Just last month, Massachusetts implemented a senior citizen drug program similar to those proposed for Maine, said Jeffrey R. Lewis, Heinz executive director.

Lewis hired consulting firm William M. Mercer to create the options that could work in Maine’s marketplace. It has a smaller senior population than many other states, which added a unique challenge, he said.

Of the three plans, Heinz is recommending one titled “value-based scenario.” It would have deductibles of $1,000 or $2,000, depending on income, then pay 80 percent of the cost for generic drugs, 40 percent for some approved brand drugs, and nothing for brand-name drugs considered medically unnecessary.

The program would also carry a per person monthly premium. For an individual with income of $17,180, the charge would be $68 per month.

John Marvin, representing the Maine Council of Senior Citizens, said the different models are worth discussing, but he expects the costs would still be too high for some seniors and wonders whether the plan could truly be self-supporting.

Heinz and Mercer representatives said the projections in the report are realistic and based on sound business principles. The projections assume that given proper advertising and marketing campaigns, the plan would pick up nearly 29,000 enrollees, or 21 percent of those eligible.

Because enrollees would pay different premiums based on their income, a mix would be created that would make the program viable, Lewis said. It would not, however, be so expensive for those with higher incomes that they wouldn’t find the plan attractive, he said.

Marvin said the biggest problem with the plan is that it does nothing to corral the runaway increase in drug prices.

A National Institute for Health Care study released Tuesday showed that drug prices rose 19 percent last year. Under the three Heinz proposals, any increases would simply be tacked onto the price of drugs from which the co-pay percentages are calculated.

Department of Human Services spokesman David Winslow said the department is interested in any option that might help seniors with crushing drug bills. The department has yet to fully review the proposal and will wait to take a position until later this week, he said.

Wednesday night, legislators and Heinz representatives were going to Portland to conduct a focus group on details of the plans. The focus group was to be a gathering of seniors who will meet to talk about their reactions to the different models. Bennett said he hopes the reactions will help legislators develop a more marketable plan.

A bipartisan group of legislators will hold a press conference on the plan at 11 a.m. today.

A public hearing is scheduled for 2:30 p.m. before the Health and Human Services and the Banking and Insurance committees in Room 202 of the State Office Building.