Deadline for Prescription Drug Enrollment Plan Approaches
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JIM LEHRER: Finally tonight, the prescription drugs story. It’s reported by Susan Dentzer of our Health Unit, a partnership with the Robert Wood Johnson Foundation.
HEALTH INSURANCE ADVISER: These are just the names of the plans and the companies that provide the plans.
SUSAN DENTZER, NewsHour Health Correspondent: The clock is ticking for Medicare beneficiaries. Most have until May 15th to sign up for prescription drug coverage before penalties kick in.
HEALTH INSURANCE ADVISER: It looks like your cheapest annual cost that you can get away with is this one right here.
SUSAN DENTZER: With the approaching deadline, Vernon and Doris Jones came to a recent seniors’ health fair in Chesapeake, Virginia, to sign up. The couple takes about 16 drugs between them, he for conditions like high blood pressure, she for the early stages of Alzheimer’s.
VERNON JONES, Medicare Enrollee: Time was running out, getting close, so we was kind of worried about, if we stayed where we was at and let the time run out, what would the circumstances
be, you know, would it be much more or could we get another plan?
Sorting through options
SUSAN DENTZER: John Waugh (ph), an enrollment counselor with a group called My Medicare Matters, helped the Jones sort through the options. On the Medicare.gov Web site, he typed in the list of their drugs and dosages to find plans that covered them. Medicare's PlanFinder program offered up a menu.
ENROLLMENT COUNSELOR: This plan is by Humana. The monthly bill is $8.81 a month.
MEDICARE ENROLLEE: Wow.
ENROLLMENT COUNSELOR: Yes, that's very cheap.
SUSAN DENTZER: Similar scenes are now occurring nationwide as Medicare's six-month-long open enrollment period draws to a close. After some initial major glitches when the program launched in January, things are finally settling down, says Medicare Administrator Dr. Mark McClellan.
DR. MARK MCCLELLAN, Administrator, Medicare: Enrollment is strong, and it continues to get stronger. At this point, we've exceeded the enrollment expectations of many independent analysts, with more than 30 million people participating in the program, with only a limited number of beneficiaries left who haven't made a decision yet.
Finding the eligible
SUSAN DENTZER: But a limited number still means about five million people; they're not yet enrolled in a new Medicare drug plan, and they lack any other source of drug coverage, such as through a former employer. So the push is on to get as many as possible signed up.
ENROLLMENT COUNSELOR: Do you estimate that your monthly income before taxes and other deductions are taken out is less than or equal to $4,500?
SUSAN DENTZER: About half of those not yet enrolled are Medicare beneficiaries with limited incomes and assets. Under a program called Extra Help, they're eligible for subsidies that will pay 85 to 100 percent of their drug costs.
Despite an extensive government outreach effort, to date only a few million of the seven million eligible have signed up.
DR. MARK MCCLELLAN: They have the most to gain from this program, but they can be the hardest to reach; they often don't get information from the usual channels.
And so what we've found is that one of the most effective ways to reach them is through grassroots community-based efforts.
ENROLLMENT COUNSELOR: Cuantos anos tiene, cinquenta y tres?
SUSAN DENTZER: Unlike the general Medicare population, which faces penalties for signing up after May 15th, these low-income beneficiaries have the rest of the year to qualify for extra help and drug coverage.
The government is relying heavily on private groups to help enroll them, such as the Access to Benefits Coalition which helps low-income seniors sign up for government programs. Jim Firman is president of the National Council on Aging, a leading coalition member.
JIM FIRMAN, President, National Council on Aging: We are using techniques that have been used by the credit card companies to identify people and then working with Medicare and others to take off of those lists people who have already enrolled. We will do everything we can to persuade them that they really are eligible for this important benefit, and it can make a big difference in the quality of their lives.
SUSAN DENTZER: Even as these last-ditch enrollment efforts continue, beneficiaries who signed up earlier are already reaping the rewards of the new drug coverage.
In Chesapeake, 71-year-old Ruth Wiles told us she'd had breast cancer and heart surgery and used to spend $500 a month on prescription drugs. She initially balked at signing up for Medicare drug coverage, partly out of confusion over the more than 40 drug plans available in Virginia. That changed when she learned how much she could save with the right plan.
RUTH WILES, Medicare Enrollee: I found out about a wonderful, inexpensive program that covers everything and saves me probably close to $400 a month, which is a big savings when you multiply it times 12.
SUSAN DENTZER: McClellan says, not only are seniors like Wiles saving money, so is the government.
DR. MARK MCCLELLAN: We're saving over $8 billion this year compared to the initial projected cost of the program. That's more than 20 percent savings.
SUSAN DENTZER: McClellan says the savings may increase as drug plans gain more enrollees and can bargain for even lower prices with pharmaceutical manufacturers. For example, two top plan sponsors, the United Healthcare-AARP partnership and Humana, have signed up a whopping 45 percent of the enrollees who have purchased new drug plans.
DR. MARK MCCLELLAN: This is where the real power of 42 million Medicare beneficiaries comes in. The drug plans are working very hard, and I'm sure, because this market is so important to them, that they're going to continue to work very hard to provide good coverage at the lowest possible cost.
SUSAN DENTZER: Still, this new program is not working flawlessly, and McClellan acknowledges that minor glitches continue.
Take the United Healthcare-AARP Partnership that's enrolled the most beneficiaries so far. Last month, it sent roughly 225,000 enrollees this letter, threatening to drop them for not paying their premiums.
The plan now says it was only trying to verify how beneficiaries intended to pay those premiums, for example, by having them withheld from their monthly Social Security checks, and not to scare them into thinking they would be automatically dis-enrolled.
Meanwhile, at pharmacies across the country, like Larry Barlow's here in Chesapeake, a constant low level of hassles persists.
LARRY BARLOW, Pharmacist: Sometimes people will come in; they'll have received an I.D. card in the mail, but their coverage isn't in effect yet. Or sometimes they get an ID card; they are covered, but they're not loaded into the system, not loaded into the computer of the insurance company.
SUSAN DENTZER: And what's their reaction when you tell them that?
LARRY BARLOW: They're not very happy.
SUSAN DENTZER: Along with his fellow pharmacists, Barlow worries that many beneficiaries will soon confront a notorious feature of most of the new drug plans: the so-called donut hole, or coverage gap.
That kicks in once enrollees have run up $2,250 in drug charges and lasts until they've paid $3,600 out of pocket for drugs. During that coverage gap, many will have to pay all their drug costs.
LARRY BARLOW: It's going to be quite a shock, because they're going to have a 100 percent co-pay. So it's like having no insurance again; it's like walking into a brick wall.
Understanding the plan
SUSAN DENTZER: Taffy Davis, who's 75 and has suffered from depression and lung disease, says that's exactly what she felt like when her drug charges bumped her into the donut hole last month.
ENROLLMENT ADVISER: First is your Medicare claim number...
SUSAN DENTZER: Up until then, her United-AARP plan had been charging her just $55 a month in co-payments for her brand-name antidepressant drug, Tofranil. Then, she went to the pharmacy to pick up a new supply.
TAFFY DAVIS, Medicare Enrollee: They hand me this package for three months' worth of pills, 270 pills, and they wanted more than $900. And I just said, "This is price gouging. It's ridiculous." He said, "No, you are now into the donut."
SUSAN DENTZER: Robert Hayes directs the Medicare Rights Center in New York, a nonprofit advocacy group that Davis called for help.
ROBERT HAYES, Director, Medicare Rights Center: The estimates are that about four out of 10 people with Medicare will face this end of their coverage at some point during 2006. Inevitably, people are going to be scared and angry.
SUSAN DENTZER: Recently, Davis got together with Josh Klein, a counselor at the Medicare Rights Center who took up her case. She told Klein that she and her husband had not understood a key fact: The full prices drug manufacturers charge insurers would be counted in estimating when enrollees would get to the donut hole, not just their own out-of-pocket payments.
JOSHUA KLEIN, Medicare Rights Center Counselor: There is a deductible.
SUSAN DENTZER: Klein told her that, for a higher premium, some plans had offered to fill in that coverage gap for enrollees or even provide generic drugs for people in the donut hole instead. He helped her find a plan without the coverage gap and told her it would still save her about $2,000 a year.
JOSHUA KLEIN: There's a monthly premium of $47, which is a little bit higher than the one that you have now.
TAFFY DAVIS: Uh-huh.
JOSHUA KLEIN: But the total cost for the whole year is...
TAFFY DAVIS: It's far lower.
JOSHUA KLEIN: ... a lot lower. This looks like a pretty good plan for you to take. However, we should definitely remember to check and see if there are any restrictions.
SUSAN DENTZER: She'd have only until May 15th to make the switch to the new plan or else she'd have to wait until the next open enrollment period begins in November. We asked Davis what she learned from the experience.
TAFFY DAVIS: the fine print. Don't take things for granted. And do your own -- do more discovery than what's on the printed page.
SUSAN DENTZER: Experts say that's advice enrollees will probably need to take to heart, now that Medicare drug coverage, with all its ins and outs, is here to stay.