"There are many, many pieces of mythology going around about this bill," Nona Bear said last week as she opened a training session on Medicare's new prescription drug program. "The most pernicious is that this is only for low-income seniors."
In fact, the voluntary program, also known as Medicare Part D, is open to more than 40 million people of all economic levels, most of them age 65 and older. Enrollment starts Nov. 15, and benefits begin in January of 2006.
In simplest terms, Part D is an insurance program that protects enrollees from catastrophically high drug bills. It's also a discount program for the routine prescriptions that can gradually drain the bank accounts even of people who are neither especially sick nor especially poor.
The program is expected to cost the government $720 billion over the next 10 years, a sum far higher than was estimated when Congress approved this major expansion of Medicare in 2003.
Despite this price tag, the benefit falls far short of complete coverage: For most people, the first $250 of drugs each year is not covered, nor is another $2,850 that some experts call a second deductible and others call a "doughnut hole," or gap in coverage.
Most people will pay premiums averaging about $32 a month for the first year. About one-third of potential beneficiaries have incomes low enough to qualify for reduced premiums and co-payments.
Thus, today's Medicare beneficiaries have two major decisions to make: whether to join the program and, if they do join, which plan best suits their needs and their budget.
But the program is so big and complex — and its costs and benefits so hard to forecast for individual consumers — that supporters are spending millions to explain it and convince seniors to sign up.
Abundance of options
Some of the confusion arises from an abundance of options: People in the Washington area will be able to choose from almost 20 plans, each with its own premiums, covered drugs and participating pharmacies. Adding to the puzzle is that Part D will not be a smart buy for some retirees — for example, those with generous drug coverage from their former employers. A further complication is that many people who opt not to join the program this year will pay a hefty and continuing penalty if they enroll in the future.
While the insurers are required to wait until Oct. 1 to begin marketing their specific plans, general information about the new benefit is being widely disseminated by interested parties that include:
- The Medicare program itself. Its Web site, http://www.medicare.gov/ , summarizes the program this way: "Medicare's new prescription drug coverage will typically pay over half of your drug costs next year, for a monthly premium. It will also provide peace of mind because it protects you once your out-of-pocket drug spending is more than $3,600 in a year. Even if you don't use a lot of prescription drugs now, you should consider joining."
Beginning in mid-October, Medicare's toll-free phone line — 1-800-MEDICARE — will be staffed by people explaining the program and helping individuals compare the plans available to them.
- Pharmacies. Rite Aid locations, for instance, are giving away booklets that demonstrate the potential value of Part D but also show it's not always much of a money-saver. One of its scenarios begins with "Helen, age 71, is generally in good health." Because she spends only $870 a year on prescription drugs, she would save only $20 by enrolling in a Part D plan. Still, the example concludes, "she also has the comfort of knowing drugs will be covered if she is ill."
"We're anticipating a major onslaught" of seniors seeking guidance about the program, said Earl Ettienne of the CVS drugstore chain, who, like Bear, spoke at a seminar arranged by the Medical Society of the District of Columbia. "They're going to barrage the pharmacies with questions," he told the assembled doctors and medical-office workers, "so we're trying to be fully, fully prepared" by alerting all CVS workers to the program, with extra training for each store's pharmacy staff.
Addressing one question that many are expected to ask — "Will my Part D coverage apply to drugs I to buy at CVS, or will I need to use a different pharmacy?" — Ettienne said, "We're going to accept all of the plans," though the chain will have special ties to plans offered by certain insurers, including Aetna and UnitedHealth.
- Part D advocates such as Medicare Today, a coalition that includes public service groups such as AARP as well as drug makers and other businesses with an interest in seeing the program succeed. Michael Freeman, executive vice president of the coalition's parent group, the Healthcare Leadership Council, said its year-long effort to promote Part D will cost $6 million to $7 million.
One of its educational tools is the "MedicareRx Made Simple" wheel, which considers an individual's marital status, income and approximate drug costs to estimate how much a person would pay annually for drugs under Part D. Churches and other organizations have received hundreds of thousands of the wheels for distribution to individuals, Freeman said. "Pharmacists like to have them on the counter," he said.
- Other Nonprofits. The Medicare Rights Center carries 101 questions about the new program on its Web site. Question 100: "If my health condition significantly changes and my plan does not cover the drugs I need, can I switch plans?" Answer: "Generally no. . . . Stay tuned for more information." (While switching is largely limited to a short period once a year, Medicare officials have downplayed the likelihood that people will not be covered for medication they need, noting that every plan must offer a wide variety of drugs.)
The Center for Medicare Advocacy issued this warning about plans with especially low premiums: "[T]he plan with the cheapest monthly premium may not be the best value. A person with a low-premium, low-deductible Part D plan who (now or later) needs a drug that is not on her plan's formulary . . . may find herself spending more on her prescription drugs than ever."
Who needs it?
Some seniors need to be convinced of the drug program's value.
"It's stupid," said Joseph Goodman of Silver Spring. "It was done by idiots."
"I realize I'm not at my peak any longer," Goodman said. Still, "I have a master's degree in engineering, and I found it complicated" to figure out how the program will work. "Why can't the government do something simple — negotiate directly with the drug companies and set prices?"
"When you get to be 79, you're using a lot of drugs, and we consider ourselves to be in good health," Goodman said of himself and wife. He estimates that he spends more than $1,000 a year to treat his diabetes and other health conditions; he buys some of his drugs at discounters such as Costco, and he orders some from Canada.
With a standard plan's annual deductible set at $250, Goodman said, "I don't think I'm going to derive a tremendous benefit" from the program. And he predicted that "the drug companies will probably increase the cost of prescriptions," which would offset the discounts negotiated by the insurers.
Peggy Ann Hansen of Bethesda, age 81, is another wary senior. Part D insurers "can change what's covered anytime they want to," she said. "If the prescriptions are covered now, they may not be tomorrow." (Actually, insurers are required to give 60 days' notice of changes.)
Polling by the Kaiser Family Foundation in the spring of 2004 showed that negative views of the program were twice as common as positive views. By last month, however, sentiment was evenly split: 32 percent pro and 32 percent con, with the remainder either neutral or offering no opinion.
Families USA, which calls itself "the voice for health care consumers," is no fan of the program.
"Does the legislation prevent drug costs from skyrocketing," the advocacy group asks on its Web site. "No," follows the reply. "Drug companies, which spend more money lobbying Congress than any other health care group, succeeded in getting a bill that does virtually nothing to moderate drug costs. . . . The biggest winners are the drug companies and the managed care industry."