Medicare Drug Plan Gets Mixed Reviews as Deadline Arrives

Monday is last day most seniors can sign up to Part D without penalty

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By E.J. Mundell
HealthDay Reporter

MONDAY, May 15, 2006 (HealthDay News) -- Is it a roaring success or a dismal failure?

As the Monday midnight sign-up deadline nears, both critics and supporters of the U.S. government's roll-out of the Medicare Part D drug subsidy program say the latest numbers tell the tale.

"Right now, 37 million people with Medicare have prescription drug coverage," Centers for Medicare and Medicaid Services (CMS) administrator Dr. Mark McClellan told reporters last week as the deadline approached.

And with an estimated 43 million Americans eligible for Part D, McClellan was right in affirming that government outreach over the past few months has helped recruit nearly 90 percent of new enrollees to the plan.

But he also went on to mention that the 37 million figure "includes about 9 million individual enrollees in stand-alone prescription drug plans."

Critics of the Part D roll-out say that figure -- which represents people who weren't already covered by existing plans -- is the best number to focus on.

"The bundled number of 37 million isn't useful to us," said Judith Stein, founder and executive director of the nonprofit Center for Medicare Advocacy Inc., in Washington, D.C.

That's because 28 million of those 37 million new members had already been automatically switched to Part D from existing coverage such as Medicaid, Medicare Advantage, VA benefits or employer-based plans.

Unfortunately, experts estimate that another 17.5 million Americans who are eligible for Part D are not so lucky -- they have no other way of covering their drug costs.

So far, by McClellan's own reckoning, just 9 million of these uninsured Americans -- the people Part D was created to protect -- have signed up for the new subsidy, Stein said.

"So, it looks to me that we're still under two-thirds of people who don't have other coverage that have actually signed up," Stein said. That's not a success story, she noted.

Other problems have emerged since the enrollment period began Nov. 15. Signing up to Part D, which relies on private insurers, has been confusing for seniors suddenly faced with dozens of competing plans vying for their attention -- each with its own list of covered drugs. Responding to the confusion, CMS set up a special Web site aimed at helping consumers calculate the relative pros and cons of each choice.

Another problem: Many "dual-eligibles" -- poorer or disabled people already covered by Medicaid who were eligible for Part D -- fell into a temporary "drug-coverage gap" when they lost Medicaid coverage but weren't yet placed within the Part D system. Snags like these had pharmacists across the nation scrambling to get cash-strapped seniors the drugs they needed.

Then there's the "donut hole." According to plan rules, Part D will cover annual drug costs up to $2,249. The next $3,600 of yearly prescription expenses must be picked by the patient. The subsidy doesn't kick in again until annual costs surpass $5,850. Experts estimate that nearly 7 million Medicare beneficiaries will fall into the "hole" this year, causing them to shell out thousands in drug costs.

Despite these challenges, millions of seniors and disabled have successfully signed up to Part D, which experts say can and does save them money. McClellan said Medicare-staffed buses "have logged hundreds of thousands of miles since last July," as staffers and volunteers got the word out in thousands of local events held across the country.

"I think the roll-out has gone really well, considering that this is the first entitlement program in a very long time," said Thomas Johnson, executive director of the Medicaid Health Plans of America (MHPA), an industry group. "Looking back on it, one could argue that maybe it could have been done in a simpler fashion, but when laws are written, sometimes that's not the case, and so we are where we are," he said.

Johnson added that "there has been a tremendous amount of outreach from many different industries to try and help get people used to this new program, and I think you'll see that continue, even after Monday."

Already, some kinks in the system have been worked out. One worry was that, under Part D rules, there was no way to stop a private insurer from removing a drug from its "formulary" (a list of approved, covered prescriptions) midway through the year -- even though a senior might be locked into the plan for months to come.

Responding to those concerns, the Bush administration in April issued a new rule that allowed beneficiaries in a given plan to continue receiving coverage for a drug, even if it was dropped from the plan's formulary.

The government has been less flexible in other ways, however. Speaking last week to seniors in Florida, President Bush refused to move the May 15 midnight deadline for penalty-free enrollment. As reported by The Associated Press, Bush said "Deadlines are important. Deadlines help people understand there's finality, and people need to get after it."

However, officials at CMS have said that low-income beneficiaries who do sign up after Monday's deadline will not have to pay higher premiums. Higher-income seniors will still face this penalty, however.

According to Department of Health and Human Services Secretary Mike Leavitt, signing up is relatively simple and involves three steps: "First, is to get their prescription drugs together; second, is to find their Medicare card; and third, is to dial 1-800-Medicare or go online at www.medicare.gov."

Stein said she only wishes it was that simple.

Because of the myriad plans seniors can pick from, signing up "requires an enormous amount of one-on-one attention for each enrollee," she said.

According to Stein, the biggest problem with the Part D roll-out was the fact that the government expected Americans of varying abilities to actively seek out information and sign up. Instead, she said, people should have been automatically enrolled via Medicare and then been given the option of dropping out.

"Study after study shows that when people have to opt into something as opposed to having to opt out, there's much less uptake," Stein said.

But Johnson said Americans should always be as proactive as possible when it comes to their health care.

"It's incumbent on people to take the personal responsibility to go ahead and investigate who they should sign up with," he said. "And they shouldn't wait until the last minute. I'd really urge them to get involved with this new program, because it's in their best interest to do so."

More information

For help on understanding Medicare Part D, head to the Kaiser Family Foundation.

SOURCES: Judith Stein, founder and executive director, Center for Medicare Advocacy Inc., Washington, D.C; Thomas Johnson, executive director, Medicaid Heath Plans of America, Washington, D.C.; May 10, 2006, teleconference with Mark McClellan, administrator, U.S. Centers for Medicare and Medical Services and Mike Leavitt, secretary, U.S. Department of Health and Human Services; May 10, 2006, The Associated Press; April 26, 2006, The New York Times

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