New drug plan bewilders many senior citizens

Beneficiaries must choose among dozens of plans.
KNIGHT RIDDER NEWSPAPERS
PHILADELPHIA -- Kevin Costello stood before a small, mostly elderly group at the El-Shaddai Baptist Church in Philadelphia like a coach preparing for the big game.
The public-interest lawyer gave them pointers about the mountain of choices they would face in the new Medicare drug plan. They listened intently and floated some polite questions.
But at the end of his 90-minute pep talk, Philadelphia police officer Ana Rodriguez, who'd come to the meeting for her parents, piped up: "It's too much to swallow."
For decades, senior citizens have longed for the federal Medicare program to cover outpatient prescription drugs. Now, the historic moment is near. Enrollment for the program's greatest expansion will begin Tuesday. And early reviews have been less than enthusiastic.
Many people are bewildered, anxious and frustrated as they try to decide whether they should enroll in the new program.
The Medicare drug plan has been injected with a heavy dose of market competition. Beneficiaries, including some people with disabilities, can choose among dozens of plans with various premiums, co-pays and lists of approved drugs.
Consequences
Those who forge ahead can become overwhelmed trying to make the right choice for their health and finances. Those who don't could face penalties that would cost them a lot more in drug premiums in the future.
"We are driving our car into darkness," said Costello, a staff attorney for Community Legal Services in Philadelphia. "There is going to be massive confusion."
He fears that uncertainty will lead to the very problem that the new Medicare drug benefit is supposed to alleviate -- namely, that some people won't get the drugs they need.
When asked last month whether they planned to enroll in the Medicare drug plan, 37 percent of seniors said they won't, and 43 percent more said they didn't yet know, according to a survey by the Kaiser Family Foundation and Harvard School of Public Health. Top reasons included: They already have an insurance plan. They don't know enough about it. They think it won't save them money. And it's too complex.
Filling a gap
The benefit will help fill a gap in drug coverage. Nearly half of Medicare recipients lack drug coverage at least part of the year, according to the Kaiser Family Foundation. And it promises to cap catastrophic drug costs for all beneficiaries.
"There is very good and comprehensive coverage," said Medicare spokesman Gary Karr.
Many low-income seniors who lack drug coverage stand to gain the most from the drug plan. The program will also give them help with premium and out-of-pocket costs.
People who need a lot of drugs also can gain from the program, experts say. The standard new benefit will cover 95 percent of total costs above $5,100 a year.
Time element
Seniors with a retiree plan should find out whether it's considered creditable coverage by Medicare -- meaning that it is at least as good as the new benefit. They should probably keep it, experts say, and won't be penalized if they decide later to join a Medicare plan.
Beneficiaries are facing a time crunch. Those who don't sign up by May 15 and lack creditable coverage will be penalized if they enroll later: Their premiums will increase 1 percentage point each month they delay -- or 12 percent a year.
Many Medicaid recipients who also qualify for Medicare need to be aware that they will automatically be switched Jan. 1 to a private plan selected by the government unless they pick one themselves.
Seniors with a Medigap drug policy probably will do better to switch to the new Medicare drug plan, experts say. But they should be careful not to accidentally drop their Medigap medical coverage.
Not a perfect plan
The program isn't cheap for taxpayers. The benefit will cost an estimated $37 billion next year and about $720 billion in the first decade, according to government data. U.S. Sen. John McCain, R-Ariz., called last month for a delay in the benefit's launch to help rein in government spending.
"We are going to have a spending explosion set off on Jan. 1," said Robert E. Moffit, director of the Center for Health Policy for the conservative Heritage Foundation.
He also said the benefit is jarring to seniors because of its "weird" design: Partial coverage for the first $2,250 in drug costs. No coverage for the next $2,850. And nearly full coverage for annual costs exceeding $5,100. "It is a product of a government committee; that's why it looks so strange," Moffit said.
Richard G. Stefanacci, a Medicare drug program expert at the University of the Sciences in Philadelphia, said it's not a perfect plan. "The goal is to get everybody on it who would benefit," he said. "And work on refining it."
The voluntary benefit is available to all 42 million Medicare recipients -- no matter how wealthy they are.
"I will have to sign up. I don't have any choice," said Dolores Prokapus, 70, a retired social studies teacher in West Deptford, N.J., who now spends about $300 a year for drugs. "You don't know what you will need next year."
Choices required
Educating people about their choices has become a high priority for the government and many groups.
Costello tries to impress on people that the Medicare benefit requires them to become consumers. They will need to be savvy enough to sift through various sales pitches because the benefit plans are being offered through private insurers -- not the government.
Before they pick a plan, he said, they should size up the health coverage they already have. For instance, a person who chooses a Medicare HMO must also sign up for its drug benefit, he said.
Decisions should be based on how much they can spend on a plan, whether it covers the drugs they use and whether their pharmacy honors the plan.
"As the word is getting out, we will see a much more positive shift in attitudes toward the new program," said Mary R. Grealy, president of the Washington-based Healthcare Leadership Council, a group of chief executives from health companies. "We are seeing the power of the market competition."