The roll out of the new Medicare "Part D" drug program is off to a very rocky start.  The complexity of the program, information errors, delays, and tough decisions are making enrollment extraordinarily difficult.  Adding to the confusion, Medicare’s "Drug Plan Finder" database, the government’s major means to help beneficiaries sort through scores of health plan options and compare costs and coverage, was incomplete and not operating correctly until just one week prior to the start of initial enrollment on November 15th.  Besieged senior centers across the nation have been pleading for volunteers to help beneficiaries through the confusing process.

In October and November, seniors who receive their prescription drug coverage through former employer or union plans got word on the fate of their coverage.  TSCL is learning that, for substantial numbers of beneficiaries, their former drug coverage ended December 31, 2005.  Those affected were instructed to replace their coverage with a new Medicare Part D drug plan.

Some of the major problems with the new program are becoming more evident.  Applications for the extra government financial assistance for low-income seniors are far lower than originally estimated.   Some low-income seniors, who receive free drugs through special prescription programs, appear to have been notified by the sponsoring drug companies that they will lose their free meds if they enroll in Medicare Part D.  In addition, TSCL is concerned that many seniors may simply be unaware they may be eligible for the assistance that would pay most of the cost of the benefit, or that they might require help to enroll.

One of the greatest challenges facing the new Medicare "Part D" is the total lack of a source of "dedicated" revenue.  Unlike Medicare Part A (hospital insurance), there is no payroll tax that funds the new benefit.  And unlike Medicare Part B, the premiums that pay the new benefit go directly to the drug plans rather than being kept by the government.  Thus, the government has no source of revenue it can rely on to pay its share of the program cost.

Those costs are already estimated to be far greater than Congress originally approved.  And, while the government is strictly forbidden from negotiating drug costs, the program provides tens of billions of dollars in subsidies to insurers who offer the private coverage and to employers to retain coverage already offered to beneficiaries. 

TSCL believes that the new benefit is too complicated and the program financing in jeopardy.  We are working with Members of Congress on legislative proposals that will allow the government to negotiate drug costs and will replace Part D with a simple, easy-to-use benefit.

Sources: "New Medicare Handbook Has An Error," Associated Press, October 5, 2005.  "How to Choose a Medicare Prescription Drug Plan," Sarah Rubenstein, The Wall Street Journal Online, November 4, 2005.  "More Than Three Million Apply For Medicare Prescription Drug Help," Social Security Administration, September 22, 2005.  "Another Choice for Elderly: Charity or Medicare?" Stephanie Saul, The New York Times, November 7, 2005.

December 2005