New Medicare Drug Law – Continuing to Look Like a Bad Deal

(New York Times, July 15 , 2005) - SCARBOROUGH, Me., - Four months before enrollment begins, the Bush administration has started a cross-country campaign to sell its most significant domestic policy initiative, the new Medicare drug benefit. But it is encountering skepticism from some consumers, whose participation is critical to the program's success.

In a stop here, four top Bush administration officials, including the surgeon general of the United States, said the drug benefit would be a boon to retirees, worth $1,300 a year to a typical recipient and much more to those with low incomes.

But the officials offered none of the details that would have allowed beneficiaries to judge for themselves. Crucial information, like the monthly premiums and the names of covered drugs, will not be available until mid-September.

After hearing federal officials praise the program for about 45 minutes, Joan M. Jenness, 72, of Bridgton, Me., said: "I heard nothing I had not heard before. I still have lots of questions."

Everyone enrolled in Medicare is eligible for prescription drug coverage. But public opinion polls suggest that many people have not heard about the new benefit or do not understand it, and many have not decided whether to sign up for it.

The economics of the new program depend on the assumption that large numbers of relatively healthy people will enroll and pay premiums, to help defray the costs of those with high drug expenses. Insurers say the new program cannot survive if the only people who sign up are heavy users of prescription drugs.

That is why President Bush flew to Minnesota last month to open a national "education and outreach" tour, and why other officials have taken the message to Florida and South Carolina.

This week's bus tour rolled into Maine, New Hampshire, Massachusetts and Rhode Island with a twofold purpose: to educate consumers and to galvanize community groups, which are needed to help people enroll. The campaign is headed for Chicago, Milwaukee, Indianapolis, Cincinnati and Dayton, Ohio, next week.

On Tuesday, more than 30 organizations plan to announce a coordinated national effort, including a television advertising campaign, to disseminate information on the Medicare drug benefit. The organizations include AARP and groups representing doctors, pharmacists, insurance companies and people with chronic diseases.

Federal officials face a huge task in trying to educate the 42 million Medicare enrollees about a drug benefit that differs radically from the traditional fee-for-service program. In this Portland suburb, that challenge was on display.

People who said they were healthy said they saw no immediate need to buy the Medicare drug coverage. People who said they were ill said the benefit seemed meager. And local insurance counselors said they shuddered at the complexity of the program.

Officials arrived in a big blue bus painted with the message that people could sign up for the drug benefit on Nov. 15, for coverage beginning on Jan. 1. Dr. Mark B. McClellan, administrator of the federal Centers for Medicare and Medicaid Services, explained why federal officials were here.

"What matters most," Dr. McClellan said, "is not what happens in Washington, but what happens all over the country as people make decisions about their health care and prescription drug coverage."

In deciding whether to sign up for the drug benefit, people will want to evaluate whether they will be getting their money's worth. That depends, in part, on how much they currently spend on drugs.

Health policy specialists say the new benefit will generally be a good deal for low-income people, who are entitled to extra subsidies, and for people with drug costs exceeding $5,100 a year, since Medicare will pay about 95 percent of the cost of each prescription beyond that point. People who have solid drug coverage from other sources, like a former employer or the veterans' health program, may not see a need to sign up immediately for the Medicare drug benefit.

Maine is a good state in which to sample public sentiment about the benefit. About 18 percent of residents, - 239,000 of 1.3 million, are on Medicare. Concern about drug costs figures prominently in state politics. Because Maine is on the Canadian border, residents have ready access to information on drug prices in Canada.

In addition, Maine has been a leader in devising state programs to reduce drug costs. It defended one such program all the way to the United States Supreme Court.

The event here was held at the Southern Maine Agency on Aging, a nonprofit organization that offers counseling and other services. Federal officials are counting on such agencies to help beneficiaries select drug plans.

As he welcomed visiting officials on Wednesday, Laurence W. Gross, executive director of the agency, described the drug benefit as "one of the most important changes in Medicare in 35 years."

But Mr. Gross has yet to persuade his mother, Lisette V. DeBruycker. "I'm betwixt and between," said Ms. DeBruycker, 81. "I don't take any medications aside from an occasional aspirin. What will the new program do for me?"

Richard E. Robbins, 72, said he would probably sign up, although he uses only a few hundred dollars' worth of drugs in a year. "It's a no-brainer," he said. "The drug coverage is a safety net. We never know from day to day what our needs will be."

Many Democrats adamantly opposed the drug bill when Republicans pushed it through Congress in 2003. Democrats denounced the measure as a giveaway to drug companies and insurers. But Gov. John Baldacci of Maine, a Democrat, is working with the Bush administration to help people enroll.

"This is not the drug benefit we would have designed," said Jude E. Walsh, the governor's top adviser on pharmacy programs. "But we have no choice. It's coming whether we want it or not. We are trying to make it work for vulnerable people in the state of Maine."

The officials who barnstormed through New England called themselves "the four docs." Besides Dr. McClellan, those visiting were Surgeon General Richard H. Carmona; Julie L. Gerberding, director of the Centers for Disease Control and Prevention; and Elias A. Zerhouni, director of the National Institutes of Health.

In establishing the drug benefit, Congress and Mr. Bush are trying to inject market forces into the traditional Medicare program.

Under the law, Medicare will subsidize drug coverage offered by private insurers if it is at least as generous as a standard benefit defined by Congress. Private plans can charge different premiums and co-payments and will cover different drugs, creating a potentially confusing situation for beneficiaries.

Carmela Decker, 74, of Portland, asked, "Wouldn't it have been easier if Medicare had just established a prescription plan and said, 'We will pay 80 percent of the cost'?" Medicare typically pays doctors 80 percent of the approved amount for treating Medicare patients.

Mr. Bush and Congressional Republicans wanted to create a market in which insurers would compete for Medicare business by offering better benefits at lower prices. Maine officials said they expected 10 or 12 drug plans to be offered here.

Estimates of enrollment nationwide are uncertain. In the Federal Register of Jan. 28, the Bush administration predicted that 39 million people would receive drug coverage in 2006 through a Medicare plan or an employer-sponsored health plan subsidized by Medicare. In June, Michael O. Leavitt, the secretary of health and human services, predicted that 28 million to 30 million people would receive such coverage.

Carol S. Rancourt, coordinator of health insurance counseling at the Southern Maine Agency on Aging, said, "My biggest fear is that people will be confused by the large number of options, will be shocked into inertia and will just do nothing."

Many people are automatically enrolled in Medicare when they turn 65, Ms. Rancourt said. But, she added, most beneficiaries must "make an affirmative choice to enroll in the drug benefit." (Comment: “I’m from the government and I’m here to help.)

Posted: 07/17/05