According to the results from the League's online "2006 Senior Survey" performed in January, 34% of those responding said they had enrolled in, or planned to enroll in, a Medicare Part D drug plan.  Of those saying they plan not to enroll, 63% said they already have prescription drug coverage.  But of those with no prescription drug coverage, and who are not planning to enroll, two out of three said the reason was "the program is so confusing, I don't know what to do."

In addition, more than 70% of respondents said that drug plan premiums, deductibles and co-pays were either higher than they expected them to be, or too high.  TSCL believes costs will be especially problematic for the program in the very near future, as premiums, deductibles, and the "doughnut hole" in coverage are expected to increase.  "Medicare Part D is promoted as offering beneficiaries substantial cost savings on their prescription drugs, but, according to our survey, substantial numbers of seniors are highly skeptical of that promise," McCutchen notes.  "On the other hand, TSCL believes that few Medicare beneficiaries truly understand just how expensive the penalty for late enrollment could be," he adds.

Without changes, most beneficiaries who don't sign up for the new Medicare Part D drug benefit by May 15, 2006, will face a premium penalty of 12% of the premium per year (or 1% per month for each month enrollment was delayed) should they want to enroll later.  Once the May 15, 2006 deadline passes, Medicare beneficiaries won't have another chance to enroll until the next open enrollment period, that runs from November 15 through December 31 each year, and coverage doesn't start until the following January. 

"What few beneficiaries know about, however," says McCutchen, "is how the government will calculate that penalty.  The penalty of 12% of the premium per year will not be determined by the premium of the plan a beneficiary finally chooses," he says.  "Instead, the government will calculate it based on a national average price of premiums offered by all drug plans.  Thus, if the national average monthly premium is $48, then the penalty is determined by $48 even if a senior finds a plan with a lower premium of $24 per month.  And every year the penalty will go up with the rise in the national average premium."[1] McCutchen explains.

TSCL is calling on Congress to waive the Part D late enrollment penalty at least through the end of 2006, endorsing "The Medicare Informed Choice Act" S.1841 (Senate) and H.R. 3861 (House).  The legislation will extend the Initial Enrollment for Medicare Part D through the rest of this year, waiving the late enrollment penalty, and allow beneficiaries the right to switch drug plans if they find a better one.  It also provides protection from loss of employment-based retiree health coverage upon enrolling for the Medicare drug benefit, during 2006.

"Seniors and the disabled should contact their Members of Congress and ask them to pass "The Medicare Informed Choice Act," McCutchen urges.  "Medicare beneficiaries should not be penalized for the confusion that our government is responsible for creating in the first place.  Please call or write your lawmakers and tell them to fix this program by waiving the late enrollment penalty and giving you the right to change drug plans once in 2006 if you find a better plan," McCutchen adds.

TSCL is a national group of politically active seniors concerned about the protection of their earned Social Security, Medicare, and other retirement benefits.  TSCL members participate in a number of grassroots lobbying and public education campaigns designed to ensure governmental bodies, including the Social Security Administration and the Centers for Medicare and Medicaid Services, live up to their commitments. For more free information on our organization, please contact TREA Senior Citizens League, Department S608A, 909 N. Washington St., Suite 300, Alexandria, VA  22314, or visit our website at: www.tscl.org.

[1] "How Much Will Enrolling Late in a Medicare Drug Plan Cost", Sarah Rubenstein, The Wall Street Journal Online, October 21, 2005.

Distributed by The Senior Exchange, Inc.
Serving The Mature American With Timely, Low-Cost, Self-Help Information

March 2006