New drug insurance program begins for Md.'s rural elderly

Plan initially is for those who lost Medicare HMO

Health care

June 23, 2000|By M. William Salganik | M. William Salganik,SUN STAFF

CareFirst BlueCross BlueShield said yesterday began enrolling people in the new Senior Rural Pharmacy Program.

The plan, worked out in the closing moments of the last legislative session, obligates CareFirst and two other insurers to provide a $5.4 million subsidy for prescription coverage for rural seniors who lost Medicare HMOs.

In return, however, the insurers get to keep $40 million in hospital discounts which the legislature considered ending or cutting.

CareFirst sent a mailing this week to 13,100 rural seniors believed to be eligible for the program, according to Jeffery W. Valentine, director of corporate communications.

For the first six months, the plan will only be open to seniors who were enrolled in CareFirst's Medicare HMO at the end of last year when it ended operations in 17 rural counties. After that, other rural seniors can join, but the plan has a limit of 15,000 members.

Seniors will pay $40 a month for prescription coverage. After paying for $50 a year in prescriptions out of pocket, they will be eligible for up to $1,000 a year in drug coverage. There is a co-payment for each prescription: $10 for generic drugs, $20 for "preferred" brand-name prescriptions and $35 for others not on the preferred list.

After the $1,000 is exhausted, seniors have to pay for prescriptions, but can get the same discount CareFirst gets - about 15 percent off list price. The plan is offered in Allegany, Calvert, Caroline, Carroll, Cecil, Charles, Dorchester, Frederick, Garrett, Kent, Queen Anne's, St. Mary's, Somerset, Talbot, Washington, Wicomico and Worcester counties.

The insurers providing the subsidy for the prescription program will benefit from a 4 percent discount on hospital bills, which the state offers to insurers who offer "open-enrollment" health insurance policies. Those policies, which do not require medical exams, are designed to reduce the number of uninsured in the state.

However, a state task force concluded that the discount is too high, and recommended cutting it in half. Just before adjournment, the legislature agreed to preserve the discount but require the subsidy for the prescription plan.

The subsidy is in proportion to the dollars received in hospital discount. CareFirst will pay about 80 percent of the $5.4 million, with the rest split between Aetna, U.S. Healthcare and Mid Atlantic Medical Services Inc.

If the program sustains losses beyond the subsidy, CareFirst will absorb them, said Fran Doherty, the lobbyist for the insurer. If the plan generates a surplus, the state keeps the money, she said.

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