About 3.7 Million Medicare Beneficiaries Enrolled in New Discount Card Program
The Bush administration is nearly halfway toward its goal of enrolling 7.4 million people in the Medicare prescription drug discount card program, according to CMS Administrator Mark McClellan, the AP/Detroit News reports. To date, nearly 3.7 million people have enrolled in the program, which Bush administration officials say has helped reduce prescription drug costs by 10% to 25% for beneficiaries since April. According to the AP/News, some 66% of beneficiaries in the drug card program were enrolled automatically -- either because of their membership in a managed care plan or in a state prescription drug assistance plan permitted to automatically enroll them. Health care analysts say as many as 700,000 low-income beneficiaries could be enrolled in the program if the federal government expanded automatic enrollment (Sherman, AP/Detroit News, 7/6). According to John Rother, policy director for AARP, the political "controversy" over the new Medicare law has "definitely inhibited enrollment so far." He added, "The people who obviously do the best, who are helped quite substantially, are the low-income seniors ... but they're hard to find, and they've been hard to sign up." Grace-Marie Turner, president of the Galen Institute, said, "There are some people who just don't want to see any program succeed that was created by Republicans. [B]ut I think it's really reckless to discourage seniors, especially low-income seniors, from taking advantage of this program" (Lochhead, San Francisco Chronicle, 7/6). Joseph Antos, a health policy expert at the American Enterprise Institute, said, "We should do as much as we can not to leave people out" of the drug card program.
The Bush administration so far "is resisting" calls to expand automatic enrollment, saying it does not want to limit people's choice of cards. Although McClellan has "not ruled out broader automatic sign-ups," the Bush administration currently is limiting its efforts to enroll low-income beneficiaries by providing nearly $5 million to the Access to Benefits Coalition, a group of civic organizations dedicated to persuading low-income Medicare beneficiaries to enroll on their own, the AP/News reports. McClellan said he expects the rate of enrollment to increase in the next few weeks (AP/Detroit News, 7/6). He said that 25,000 people are signing up each day (San Francisco Chronicle, 7/6). Legislation introduced in the House and the Senate that would require automatic enrollment of low-income Medicare beneficiaries has not advanced (AP/Detroit News, 7/6).
In related news, a number of industry analysts are predicting that as the cost of the new Medicare law increases in the next decade, insurers offering prescription drug coverage to Medicare beneficiaries will pressure the federal government to institute price controls on prescription drugs, Reuters/Philadelphia Inquirer reports. The law prohibits the federal government from negotiating prices with drug companies. According to the Bush administration, the new Medicare prescription drug benefit will cost at least $530 billion in the first 10 years after it begins in 2006. However, according to Diane Duston, a public policy analyst with Prudential Equity Group, the cost of the drug benefit could reach $800 billion in the first decade of the program, "tempt[ing] federal officials to adopt some form of price controls by 2009 to ease the drain on the [U.S.] Treasury," Reuters/Inquirer reports. Duston said, "Politicians will avoid using the phrase 'price controls' but may attempt something" similar. Matt Stephani, a portfolio manager of Idex Great Companies-America Fund, said that if price controls were instituted for Medicare beneficiaries, there would be a "spillover" of lower drug prices for privately insured U.S. residents because the "privately insured would look at the Medicare prices and insist they be used as a negotiating point" for the cost of their own medicines. Stephani and Duston said that the federal government also might be forced to institute some form of price controls if insurers begin losing money on the Medicare drug coverage and stop covering Medicare beneficiaries. "Managed care could say to heck with it, it's a big hassle, let's walk away from it. It would become a government-run program at that point," Gordon Carey, a senior official with Cambridge Pharma Consultancy, said (Pierson, Reuters/Philadelphia Inquirer, 7/5).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.