Confusion greets drug-plan sign-up; Legislators, consumer groups balk at Medicare Part D

Confusion greets drug-plan sign-up
Legislators, consumer groups balk at Medicare Part D

SAN FRANCISCO (MarketWatch) -- A dizzying array of options in the new Medicare prescription-drug benefit is confusing many beneficiaries who don't have enough time to make the decision without incurring a financial penalty, a group of lawmakers charged Tuesday.

U.S. Sens. Richard Durbin, D-Ill., Bill Nelson, D-Fla., and Chuck Schumer, D-N.Y., along with U.S. Reps. Jan Schakowsky, D-Ill., and Pete Stark, D-Calif., announced legislation that would give Medicare beneficiaries a full year to choose a Medicare drug plan instead of the six months now allowed.

The benefit, known as Part D, is set to replace the transitional discount-drug-card program on Jan. 1 for those who enroll in one of the many private insurers' drug plans by then. The six-month penalty-free sign up period began Tuesday. Those who fail to sign up within the six months face a benefit penalty of 1% a month.

The drug benefit marks the biggest change to Medicare in its 40-year history. It's forcing many of the federal program's 42 million beneficiaries to compare their current drug coverage with the new plans and weigh which is best.

Among other factors, seniors and those who are disabled need to consider what they can afford in premium costs, deductibles, copays and coverage gaps. They also need to compare each plan's list of covered drugs to ensure the drugs they're taking and the pharmacies they buy from are included under the different plans.

"We have created a plan here that is so difficult, so confusing and so hard for average people to understand that many seniors are struggling to try to figure out what is the best plan to turn to in order to protect themselves," Durbin said during a press conference.

"It didn't have to be this way," he said, noting that the law could have created a simpler approach and given Medicare the right to bargain for bulk discounts, "just like the Veterans Administration so that, ultimately, the seniors would have been the winners."

"As it turns out, the seniors are going to be the victims -- at least for the next few months while they struggle through this terrible transition trying to figure out how many plans to choose from," Durbin said.

Durbin is cosponsoring a bill called the Medicare Informed Choice Act along with Schakowsky and Stark on the House side. The bill, H.R. 3861, would extend the penalty-free enrollment period until Dec. 31, 2006 and allow beneficiaries to make a one-time change in their plan in the first year in case they make a mistake.

"Remember, we had three very rude visitors this year: Katrina, Rita and Wilma," Nelson said. "That has disrupted the lives of senior citizens in the Southeastern United States considerably."

"And in the midst of all that confusion, to add this additional burden and not give them the luxury of some additional time after what they've suffered, that would be inexcusable."

Schakowsky and Marion Berry, D-Ark., also introduced H.R. 752, the Medicare Prescription Drugs Saving and Choice Act, which would provide the drug benefit within Medicare instead of through private insurers and require the program to negotiate prices with drug companies to hold costs down.

The law that created the Medicare drug benefit expressly prohibited the program from bargaining for lower prices with drug companies. That provision remains a sticking point among critics such as Ron Pollack, executive director of Families USA, a national health-care consumer advocacy group, who sees the estimated $700 billion cost of the drug program over the next 10 years as unsustainable.

"I believe as the costs of this program skyrocket and people want to trim wasteful spending, they're going to want to revisit the way the program was structured," he said.

As seniors prepare to make their selections, the Centers for Medicare & Medicaid Services is touting its Plan Finder tool at www.Medicare.gov, which is designed to help beneficiaries find a drug plan that works for them. See previous Vital Signs for more information.

But like many online and phone support tools, it's been overwhelmed and running slowly because of the demand for services, Pollack said.

The problem isn't just technical -- about 76% of seniors have never been online, he said. "Even if the tool works better as I presume it will, it still won't be helpful for most of the people in this population."

What's more, 26% of Medicare beneficiaries have cognitive impairments, 2.3 million live in nursing homes and more than 3 million seniors have visual problems, he said.

Those having trouble choosing a plan may want to visit one of the 1,100 State Health Insurance and Assistance Program offices, also known as SHIP, for help, Pollack said. Most are staffed by volunteers who can aid people in comparing plans, he said.

"Seniors will need one-on-one counseling because there's no one answer for everybody," he said. "You may even have a husband and wife and what may be good for one may not be good for the other."

People who can't find a SHIP office near them may call Families USA for a referral at 202-628-3030.

Medicare's standard benefit, which companies may deviate from as long as they offer more and not less, is structured so enrollees pay a $250 deductible upfront before insurance kicks in, plus premiums ranging from about $20 to $37 a month. Beneficiaries are responsible for 25% of costs from $251 to $2,250. After that, the plan stops paying in the so-called doughnut hole, where enrollees pay for costs up to $5,100, after which the government program picks up 95% of the tab.

Despite private insurers' sizable ad campaigns to sign up seniors, 43% of eligible Americans said they don't know yet if they will enroll in a Medicare drug plan for 2006, according to a study released last week from the Kaiser Family Foundation and Harvard School of Public Health. One in five say they plan to enroll but 37% say they don't plan to sign up.

When asked whether the new drug benefit would help them personally, more seniors say it wouldn't help them than say it would -- 49% and 39% respectively.

Consumers Union, the publisher of Consumer Reports, launched a Web site two weeks ago at www.consumersunion.org/issues/medicaredrugs that invites seniors to report aspects of their experience in obtaining Medicare Part D coverage.

So far, about 100 people have written in with vague complaints about the sign-up process, said Bill Vaughan, a senior policy analyst at Consumers Union.

"It basically is just, 'I don't understand. It's too confusing. It's not clear,'" he said. "'Why does it have to be so complex?'"

Vaughan advised frustrated seniors to be patient with the tools and keep checking back in the next six weeks. "The prices are likely to change; the accuracy of the information will get better."

Yeah, partly, or I should say mostly. The Medi/Medi people (those on both Medicare & Medicaid... the poor) will not have to choose anything or pay anything and if you are above 150% of the Federal poverty level, you'll have to choose a plan and will get a subsidy based on your level of income to help you pay for some of it.

Are you a Compassionate Conservative? Have you developed Compassion Fatigue yet? There is no prescription for Compassion Fatigue except Considerate Conservatism!!!

If you would like to know more about Considertate Conservatism as a prescription for Compassion Fatigue just send $19.95 in cash, check or money order to SierraWasp at FreeRepublic.com's FReepMail system. (grin)

The government has outdone itself with this disaster. RINOs who tried to out-Democrat the Democrats have once again given a political opening to the Democrats.

According to the HHS guy I saw on the boob tube the other night, if they don't sign up the government will automatically pick a plan for them.

Don't know where you get your the sky is falling mind set, but the only time the government will pick a plan for you is if you are on Medicaid. Even then you have the opportunity to change to a plan that is more favorable to you.

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