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Medicare Choices

Medicare's prescription drug benefit program is set to begin in less than three weeks. An expert discusses the multitude of available options for seniors.

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  • MARGARET WARNER:

    With less than three weeks to go until the new Medicare prescription drug benefit kicks in, many seniors seem baffled by the choices they have to make to sign up.

  • WOMAN:

    On a scale of frustration on a scale of one to ten, I say it's ten.

  • WOMAN:

    Confused– that sums the whole thing up.

  • MARGARET WARNER:

    The government has been urging America's 43 million Medicare enrollees to sign up for the program designed to help them pay for prescription drugs.

    But for some, like Marvin and Marie Galford — who take about 20 drugs between them for everything from heart trouble to kidney disease — it's been a challenge.

  • MARVIN GALFORD:

    There's just so many options that I don't know what they are and how it's going to help us, and when they start and when they don't. It's just too much– mind-boggling.

  • MARGARET WARNER:

    The options are the result of the way Congress designed the system. There's no standard, government-designed plan.

    Instead, enrollees have to choose from among dozens of plans offered by private insurance companies, with different deductibles, co-pays and lists of authorized drugs.

    The plans vary from state to state. Alaska, for example, has 27 different plans offering drugs only, and another six HMO plans for drugs plus medical care.

    Today, President Bush went to a retirement community in Springfield, Virginia, to urge residents to choose a plan.

  • PRESIDENT GEORGE W. BUSH:

    We fully recognize that for some seniors, that this is a daunting task. It's a — you know, when you — when you give people choice and options, it is — it can be a — a situation where people that, you know, say, "I don't really — this is something I may not want to do."

    And so I want to assure the seniors of the following things: One, the Medicare — the new Medicare plan is voluntary, it's optional; two, that there are people around who are willing to help explain the program for you and to you.

    And what we want to assure seniors around the country is that there is help. You can call 1-800-Medicare. You can get on the Internet with medicare.gov. Ask your son or daughter, ask people in your church, ask people in AARP, ask people in your community center to help you look at what's available for you. It's a good deal. It's a good deal for our seniors.

  • MARGARET WARNER:

    Yet the Medicare web site itself is daunting, and surveys indicate only 25 to 30 percent of seniors go online. So it seems that many of them will hold back on the prescription drug plan for now.

    A Kaiser family foundation survey last month suggested only 20 percent of those eligible plan to enroll.

    The government is far more optimistic. It projects that 70 percent — about 30 million seniors– will sign up by the May 15 deadline before the plan's costs go up.

    And to clear up some of the confusion faced by seniors and their families over whether and what to choose, we turn to Tricia Neuman, director of the Medicare Policy Project at the Kaiser Family Foundation. She also writes a weekly column on the Medicare drug plan for Knight Ridder News Service.

    And Tricia Neuman, welcome.

  • TRICIA NEUMAN:

    Thank you.

  • MARGARET WARNER:

    Okay. First of all, you heard the president say this is a good deal. How good a deal is it? If the seniors manage to figure out the optimum plan, potentially how much could he or she save?

  • TRICIA NEUMAN:

    Boy, it really varies. It's hard to generalize. Someone without drug coverage today who gets a low-income subsidy could maybe save hundreds, maybe thousands of dollars if they pick just the right plan.

    But there are others who could have modest savings somehow provided by the drug benefit. And there are some who could end up paying a little bit more if they don't use prescription drugs and end up with a premium that they weren't paying this year.

  • MARGARET WARNER:

    So how should a senior or his or her adult child go about figuring out whether to even sign up?

  • TRICIA NEUMAN:

    Well, right. The first question is: Should you sign up for a drug plan? And that depends on the coverage that you have this year and could have next year.

    So people who have coverage from their former job might have drug coverage that's as good as the Medicare drug benefit or maybe even better. And they should probably think about keeping that coverage rather than signing up for the drug benefit.

  • MARGARET WARNER:

    And those employers actually send out a letter, don't they?

  • TRICIA NEUMAN:

    They did. And those folks should have gotten their letters already. It uses the term that's a little technical. It says their coverage is creditable. But if you see that word that's good news and it probably means you can stick with that plan. But for most others they probably should think about signing up for Medicare drug plan.

  • MARGARET WARNER:

    So, they're trying to decide which of these plans to choose. In some of these states — I think one has over 50 plans.

  • TRICIA NEUMAN:

    Right.

  • MARGARET WARNER:

    What are the variables that they're going to have to take into account because there are a lot of them, aren't there?

  • TRICIA NEUMAN:

    Right. Well, I guess the first question is what kind of plan do they want to sign up for? Because there are really two major types: One is stand-alone drug plan. And for people who are in the regular Medicare program and they just want drug coverage that may be the type of plan they want. But the other type of plan is called a Medicare advantage plan or an HMO or a PPO that provides all Medicare benefits and will provide the drug benefits.

    So the first question is making a choice between the two. Then after that, it's a question of choosing the best drug benefit that is best for them.

  • MARGARET WARNER:

    So they've got choices, though, based on the premium costs, what drugs they cover —

  • TRICIA NEUMAN:

    Right.

  • MARGARET WARNER:

    Co-pays —

  • TRICIA NEUMAN:

    Exactly.

  • MARGARET WARNER:

    Go on.

  • TRICIA NEUMAN:

    They need to look at premiums and deductibles and co-pays, whether there is what they call a donut hole or a coverage gap.

    But another thing they have to look at is whether the plan covers the drug that they take and whether or not there are any restrictions on whether they can get that drug.

    And there are ways to find that out. But that might be an important consideration because some people really need to take the drugs that they've been prescribed and don't want to see any barriers to getting that drug.

  • MARGARET WARNER:

    And, I gather, one issue is also: do pharmacies in your area participate with x, y or z plan?

  • TRICIA NEUMAN:

    That's another really important consideration. There are some people, some older people are very dependent on a specific pharmacy that might deliver. So they would want to make sure that that pharmacy is in the plan itself.

  • MARGARET WARNER:

    All right. So the president acknowledged today that this was confusing.

  • TRICIA NEUMAN:

    Right.

  • MARGARET WARNER:

    And he said but there are resources to help. Let's take a couple of those. The 800 number: 800-MEDICARE. Now, someone — one of the reporters on our staff actually called this weekend for his grandmother and was told, well, you should call the Illinois Department of Health Insurance. How good are the people at 1-800-MEDICARE, and can they really walk you through making a decision?

  • TRICIA NEUMAN:

    Well, you know, the people there are being trained to answer these questions. I think it's going to depend a little bit. And I think there's going to be a start-up challenge for them because there are a lot of new questions.

    And one of the things that's tough about the new drug benefit is it's very individualized. So people have a lot of very specific questions that depend on their certain circumstance that will vary per person by state, by plan depending on what their former coverage was. And so it's hard for 1-800-MEDICARE to have all the answers.

  • MARGARET WARNER:

    So the next thing he talked about was the Web. And as we — as I just reported — what — only a quarter, roughly a quarter to 30 percent of seniors even go on the Web.

  • TRICIA NEUMAN:

    That's right.

  • MARGARET WARNER:

    But let's say you're someone who does or you have an adult child who is going to help you. How easy is it to navigate the web? I mean, I did go take a look today.

    Is it possible to type in where you live and all the drugs you take and have the web pop up essentially, okay, here are the five best plans for you?

  • TRICIA NEUMAN:

    Yes, it's possible. I think it takes some practice because it's not easy and you just need to kind of feel your way through a little bit so I don't want to give the impression that you can sit right down and do it and that's that.

    But it is possible to enter in information about yourself, about the drugs that you take, the dose level, the pharmacy that you go to and you do get a list of plans that are offered in your state or your area that's arrayed by how much you would be expected to pay out of pocket.

    And there is a lot of information. In fact it's kind of the only place where you can get all the information to compare plans because there is so much detailed information about the plans and the drugs that they cover.

  • MARGARET WARNER:

    So is it sort of like some of those shopping services on the web where you can plug in, I want a plasma TV for a room of this size and, you know, maybe I want Panasonic or something and then you get back, okay, here's where you can buy it and here's the cost at each place?

  • TRICIA NEUMAN:

    Pretty much. I mean what you do is you type in, you know, what somebody should do is group all of their drugs in front of them, what their dose levels are, how often they take them because that's what you need to type in.

    You need your pharmacy and its address and so if you type in the information that's important to you, you can get the answers.

  • MARGARET WARNER:

    Now, what about for seniors who, one, don't go on the Web themselves and, two, don't have adult children nearby who can help?

  • TRICIA NEUMAN:

    There are other resources. There's a state health insurance and counseling program. And in the back of the Medicare new handbook there is a list of every state program with a telephone number. And that's a good resource for people and a place to call. There are other nonprofit organizations that are out there.

    And of course there's the plans themselves that are working very hard both at education and in marketing. And so it's kind of important for people to understand that when they get information from plans that maybe educational information but they want to make sure they draw the line.

  • MARGARET WARNER:

    It's competition —

  • TRICIA NEUMAN:

    Right.

  • MARGARET WARNER:

    I mean, it's competing — it's a sales pitch.

  • TRICIA NEUMAN:

    Right. Many people could turn to their pharmacist and doctors. And that's what our surveys say people are inclined to do. And there there's a little bit of a catch also because while they provide information, they're limited in that they can't tell people exactly which plan to choose.

  • MARGARET WARNER:

    All right. A couple quick questions, and there are many questions. And I'm sure we're going to get e-mails about the questions we didn't ask.

    What if you enroll in a plan and then you decide I chose the wrong one or your medical condition changes, how easily can you switch?

  • TRICIA NEUMAN:

    You can switch easily between Jan. 1 and May 15 once.

  • MARGARET WARNER:

    And then, though the president said today it's voluntary, after May 15 if you haven't signed up and then you want to, there is what, a 1 percent increase every month on the premium?

  • TRICIA NEUMAN:

    There is a premium penalty. So, yes, it's voluntary but sort of yes but. If you don't have other coverage and you don't sign up and you delay enrollment in a Medicare plan, you would pay a penalty permanently once you do sign up for drug plan so that's why it's an important consideration for this year.

  • MARGARET WARNER:

    All right. Tricia Neuman, thank you so much.

  • TRICIA NEUMAN:

    Thank you

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