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Medicare Drug Plan: Big Win or Big Flop?

It Depends On Who You Ask

By Truman Lewis
ConsumerAffairs.com

April 21, 2006

Medicare Drug Plan • House Passes Bill to Cut Medicare Prescription Drug Costs • Study Finds "Tremendous" Disparity In Medicare Prescription Drug Prices • Medicare Drug Plan Costs Rising • Medicare Call Centers Inadequate, Report Charges • Report: Shopping Around Beats Medicare Drug Prices • Confusion Ahead: New Medicare Plans for 2007 • GAO Faults Medicare Help Lines • Medicare Scams Feared As Deadline Approaches • Medicare Drug Plan: Big Win or Big Flop? • AARP Survey Finds Medicare Rx Is What the Doctor Ordered • NY Consumer Group Challenges Medicare Enrollment Numbers • States' Suit Challenges Medicare Drug Plan • AARP Wants Changes in Medicare Rx Plan • States Sue Peoples Benefit Services • Rampant Fraud Feared as Medicare Drug Benefit Ramps Up • Biggest Medicare Drug Benefit Challenge: Understanding It • Deciphering the New Medicare Drug Program • Beware! Scams Abound • How to Spot a Scam • Seniors Try to Decipher New Drug Program --- • More Medicare News ...

The May 15 enrollment deadline to sign up for the new Medicare prescription-drug benefit is fast approaching, spurring private insurers and the government to launch a last-ditch push to enlist seniors and declare the venture a success.

The Centers for Medicare & Medicaid Services (CMS) says that more than 30 million Medicare beneficiaries are receiving prescription drug coverage, including more than 8 million beneficiaries who have gotten new, individual prescription drug coverage since the program began.

More than 93 million prescriptions were filled for these beneficiaries with drug coverage during March -- averaging 3 million prescriptions filled per day. But not everyone is willing to accept CMS' figures as proof the program is a success.

"Every few weeks the Administration lowers its standard for success," said Robert M. Hayes, president of the Medicare Rights Center, a not-for-profit advocacy organization.

"This should not be a political war of spin. It is about basic human need – health and survival. For this $1.3 trillion program, the Administration now reveals that less than 20 percent of people with Medicare have new drug coverage. (That is 8.1 million out of 43 million.) Others have somewhat better coverage, others are worse off," Hayes said.

"Tragically, over 80 percent of America's impoverished seniors eligible for low cost, comprehensive coverage have not been enrolled," Hayes said. Just 1.6 million of 8.2 million eligible Americans have been approved for the low-income subsidy.

"Any honest analysis will lead to reform and improvement: there should be a straightforward, comprehensive and affordable Medicare drug benefit. We do not have that now," Hayes charged.

The program has produced some winners, though. Insurers have snagged about 15 million new customers while also collecting health government subsidies for each new customers.

Drug companies are also profiting handsomely from the program, thanks to increased demand for some products used by seniors, such as drugs for chronic conditions, the Wall Street Journal reported.

Many seniors are also giving the benefit good reviews. An AARP survey found that nearly eight-in-ten, (78 percent) of those enrolled in a Medicare prescription drug plan say they are satisfied, despite initial confusion about which plan to choose.

"Before Medicare added a drug benefit, more than half of those in the program either lacked drug coverage or had inadequate coverage that did not protect them from high out-of-pocket costs. The new plans fill a critical need for affordable prescriptions drugs," AARP Director of Health Strategy Cheryl Matheis said.

AARP is not exactly an independent observer, however. It has a marketing alliance with UnitedHealth Group Inc., which has signed up more than 3.9 million new customers, more than any other insurer.

The drug benefit, passed by Congress in 2003, is funded largely by the government but offered to Medicare's elderly and disabled beneficiaries by private health insurers who offer plans that have different costs and cover different medications. The complexity of the program has proved daunting not only to seniors but also to senior advocates, social workers and others who routinely help the elderly with their health-care planning.

Because so many seniors have yet to sign up, some in Congress are talking about extending the enrollment period. Medicare has already extended the deadline for people with low incomes. They stand to gain the most because of extra government subsidies, but their enrollment continues to lag.

Despite the programs' problems, the Bush administration paints a rosy picture.

"With a month to go, we've passed our projections of 28 to 30 million enrollees in the first year, and we are intensifying our local outreach efforts to get more seniors signed up before the May 15th deadline," HHS Secretary Mike Leavitt said. "These strong enrollment numbers are a tribute to everyone in the national network of caring -- all of our partners, community leaders, the State Health Insurance Programs (SHIPS), and family members, who have provided counseling and assistance to the millions of beneficiaries who are now taking advantage of this new benefit and saving money."

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