U.S. seniors navigating new Medicare prescription drug plan: Some beneficiaries encounter problems
Millions of older Americans have been settling into the new Medicare prescription drug program in recent months, discovering its advantages and navigating its pitfalls. However, while health care advocates agree that Medicare sorely needed a prescription drug benefit, they are also dismayed to see their cautious warnings about cost and confusion turning into a reality.
| | Mayer Kotlarsky, left, owner of the Village Pharmacy store in Deerfield Beach, Fla., speaks with Albert Hagler about the Medicare prescription drug plan Hagler signed up for in May. Photo by Joe Raedle, courtesy Getty Images |
May 15 was the deadline for Medicare beneficiaries to pick and enroll in a Medicare prescription drug plan — a decision most beneficiaries are locked into until 2007. Depending on where they live, some beneficiaries faced dozens of competing drug plan options, which are offered by private companies, all advertising different coverage for different drugs. And although the federal government invested millions in enrollment and outreach activities, the drug program, which President Bush signed into law in 2003, was so large and caused so much confusion that advocates lobbied policy-makers to extend the May deadline, though they were not successful.
While the burgeoning new program will face many challenges, the drug benefit represents the first time that all Medicare beneficiaries, regardless of income and health status, have access to prescription drug coverage. For many beneficiaries, the benefit will prove an advantage. Nonetheless, enrolling in the Medicare prescription drug benefit is only the beginning for all those involved.
“The new challenge will have to focus on helping people understand the rules of their plans,” said Michelle Kitchman Strollo, MHS, a principal policy analyst with the Kaiser Family Foundation’s Medicare Policy Project.
According to the U.S. Department of Health and Human Services as of mid-June, more than 38 million — or 90 percent of all Medicare beneficiaries — had prescription drug coverage. But of that number, more than 17 million had drug coverage outside of the new Medicare program, according to the Center for Medicare Advocacy. A substantial portion of the more than 4 million beneficiaries who did not enroll in the prescription drug program are low-income adults who would qualify for assistance and for whom the drug benefit could provide the most advantages, the center reported.
More than 6 million low-income Medicare beneficiaries were automatically enrolled into the drug program — known as Medicare Part D — and some are now facing problems. Beneficiaries who received health care coverage via Medicare but also qualified for prescription drug coverage via their state Medicaid program are known as “dual eligibles.” When Medicare’s drug coverage kicked in this year, such beneficiaries were switched over to Medicare for their prescription drug needs and randomly assigned a new drug plan. While the automatic enrollment was helpful, Strollo said, not everyone landed into a drug plan that fit their health needs. Strollo said she has heard of dual-eligibles going to a pharmacy and finding out that their prescription drugs are no longer covered.
“For many of the poorest people, they were better off on Medicaid,” said Judith Stein, the founder and executive director of the Center for Medicare Advocacy.
Under many state Medicaid programs, dual eligibles did not have co-payments for their prescription drug needs — but do under the Medicare drug plan, Stein said, adding that in some cases states are having to step in and cover co-payments. However, unlike other beneficiaries, dual eligibles aren’t locked into the drug plan they were assigned and can switch plans — but that can be very complicated as well. According to the Center for Medicare Advocacy, “few dual eligibles use the Internet, so to make use of these decision supports, a beneficiary must generally get help from someone else. Moreover, processing new enrollments in a plan is complex, requiring communication between the old plan, (the Centers for Medicare and Medicaid Services), the new plan and another contractor.”
However, some state and local leaders are devising their own solutions to the problems that have arisen. In Baltimore, health workers and aging advocates have teamed up to ensure the low-income Medicare population isn’t left to navigate the Medicare maze on its own. According to John P. Stewart, executive director of the city’s Commission on Aging and Retirement Education, in Baltimore alone thousands of people may have been lost in the system, given the 3 percent to 5 percent error rate in switching beneficiaries from Medicaid to Medicare. Ensuring the impact of such a situation was mediated as much as possible was a priority for the commission, he said. The commission partnered with the Baltimore City Health Department and local pharmacies and implemented the Medicare Part D Surveillance and Response program in January.
Stewart said he has heard a number of problems from Baltimore residents who were auto-assigned into a drug plan. Some residents have made routine visits to pharmacies and discovered that they weren’t auto-enrolled, while others found they are unable to afford the new co-payment or that a needed prescription drug was no longer covered. But under the new surveillance program, “we wanted to ensure that anyone who presented at a pharmacy and didn’t have coverage would not walk out without a (prescription),” Stewart said. Instead of leaving without a needed medication, a pharmacist can contact the health department for a short-term, 30-day prescription and forward a resident’s information to the commission, which will take care of the enrollment problem. To date, Stewart said, the city has spent about $10,000 purchasing medications for low-income beneficiaries who encounter Medicare problems.
Before the Medicare enrollment deadline, the Baltimore commission conducted enormous amounts of outreach and enrollment activities, holding more than 310 enrollment sessions, training more than 700 senior-serving staff and conducting one-on-one counseling with more than 7,500 people. The commission also made 114,000 telephone calls from the mayor’s call center to 45,000 heads of household in Baltimore letting residents know that help was available — and Baltimore was the only city to do such an activity, Stewart said.
As of mid-June, out of 101,000 eligible Medicare beneficiaries in Baltimore city, about 69,500 were reported to have enrolled in the drug benefit. According to Stewart, there are still 32,000 who are not enrolled and as many as 10 percent could be low-income. However, the commission recently received a grant to partner with the local NAACP and conduct more outreach and enrollment among the city’s low-income residents about the Medicare drug benefit.
“This is a benefit, but I think it’s a flawed benefit and an under-funded benefit,” Stewart said. “The enrollment crisis is over, but the ‘doughnut hole’ will be big.”
Bracing for the ‘doughnut hole’
Within the health care community, the term “doughnut hole” is used to describe the coverage gap within Medicare’s drug benefit. Under the plan, Medicare will cover 75 percent of drug payments until costs hit the $2,250 mark, at which point beneficiaries will have to pay 100 percent of a plan’s drug price out-of-pocket. Medicare coverage won’t kick back in again until a beneficiary’s drug costs reach the $5,100 mark. While dual eligibles won’t encounter a coverage gap, other beneficiaries will encounter it every year.
| | Customers seek help at a New York City Medicare Services office on May 15, the last day for enrollment in the drug plan. Photo by Spencer Platt, courtesy Getty Images |
“I think the doughnut hole is going to come as a shock to seniors who were probably unaware of it,” said Ron Pollack, executive director of Families USA, a health care consumer advocacy organization. “A coverage gap like the doughnut hole does not exist in other forms of insurance, so it is not going to be expected by seniors.”
Pollack predicted that the size of the coverage gap could get worse with each passing year as drug prices increase. The 2003 law creating the drug benefit prohibits the government from negotiating with pharmaceutical companies for lower drug prices. According to “Big Dollars, Little Sense: Rising Medicare Prescription Drug Prices,” a report Families USA released in June, between November 2005 and April 2006 almost all Medicare drug plans raised their prices for most of the top 20 drugs prescribed to seniors.
As of April, there were substantial price differences between Medicare drug plans and those prices secured by the U.S. Veterans Administration, which is allowed to use its purchasing power to negotiate lower drug prices for veterans, the report stated. For example, the lowest price for a year’s worth of Zocor, a popular cholesterol drug, under the VA health plan was a little more than $127. The lowest amount found via a Medicare drug plan was about $1,275. But even enrolling in what seems like a reasonable Medicare drug plan isn’t a guarantee, as the private drug plan providers can change their pricing as often as they like, Pollack noted.
“There are a lot of people who simply won’t be able to afford their medicines (when they reach the coverage gap)…and it may put their health at risk,” he told The Nation’s Health.
In Baltimore, Stewart said he has heard from residents who have hit the coverage gap sooner than expected. In late June, Stewart said he had received six phone calls in 10 days from people who had hit the coverage gap, couldn’t afford their medications and said they did not understand at the time of enrollment exactly how the coverage gap works. While Baltimore cannot financially assist residents with the coverage gap, Stewart said the commission is trying to help residents find alternative drug assistance.
Stewart said the commission and health department will “crank up” their efforts again during the next open enrollment period in January 2007, when beneficiaries are allowed to switch to a different drug plan. However, to financially sustain the Medicare prescription drug benefit over the long run, major changes will have to be made, Stewart noted.
The instability in Medicare’s drug pricing makes the benefit an “adventure for (beneficiaries) every time they go to the drug store,” said Bill Vaughn, senior policy analyst at Consumers Union. A plan someone picked in January may no longer be the best in April and “there’s the faint odor of bait and switch,” he told The Nation’s Health. Still, Medicare needed a prescription drug benefit and it could prove to be a big step forward for people who lacked any type of coverage previously, Vaughn said. Nonetheless, the program will need to change if it is to last.
“The future Congress has a major rendezvous with destiny,” he said. “We’re not getting a good deal for our health care dollar.”
For more information on Medicare, visit www.cms.gov or www.medicareadvocacy.org .
» Back to Top
|