Medicare Drug Benefit Enrollment Reaches Goal
More than 30 million Medicare beneficiaries now have prescription drug coverage, exceeding the Bush administration's goal of ensuring coverage for 28 million to 30 million beneficiaries in the first year of the Medicare prescription drug benefit, HHS Secretary Mike Leavitt said on Thursday, the AP/Philadelphia Inquirer reports (AP/Philadelphia Inquirer, 4/21).
In the last month, 1.7 million beneficiaries enrolled in stand-alone prescription drug plans, bringing the total number of beneficiaries with coverage through stand-alone PDPs to 8.1 million, HHS said (Abrams, AP/Chicago Sun-Times, 4/21). The 8.1 million total includes one million low-income beneficiaries "who had their enrollment facilitated by CMS," HHS said.
According to HHS, beneficiaries receiving drug coverage also include:
- Nearly 5.8 million beneficiaries in Medicare Advantage plans, including about 950,000 beneficiaries who voluntarily enrolled in MA plans since Jan. 1;
- About 5.8 million dual eligibles who were automatically enrolled in the drug benefit and an additional 500,000 dual eligibles who were enrolled in MA plans with drug coverage;
- More than 8.2 million retirees who receive employer-sponsored drug coverage to supplement Medicare drug benefits or who receive drug benefits through unions or former employers that receive a subsidy from Medicare; and
- 3.5 million retirees who are enrolled in TRICARE -- the military health program -- or the Federal Employee Health Benefits Program.
Leavitt said that 90% of the estimated 43 million Medicare beneficiaries will have prescription drug coverage by the May 15 enrollment deadline if sign-up rates continue at the same pace (AP/Philadelphia Inquirer, 4/21). Leavitt and CMS Administrator Mark McClellan said about three million beneficiaries who have not enrolled qualify for a low-income subsidy. "That's a very hard population to reach," McClellan said (Mussenden, Richmond Times-Dispatch, 4/21).
Leavitt and McClellan also reiterated that the administration does not support an extension of the enrollment deadline, a move urged by some lawmakers who have pushed for legislative action on the matter.
Leavitt said, "The deadline is a very important part of this. It helps seniors focus on this, and it's working" (Carey, CQ HealthBeat, 4/20).
McClellan said Medicare actuaries estimate that two million fewer beneficiaries would sign up for the benefit by May 15 if the deadline were extended than if it remained in place (Brand, Denver Rocky Mountain News, 4/21).
Rep. Pete Stark (D-Calif.) said in a statement that the administration projected in December 2003 that 40.7 million beneficiaries would receive coverage under the drug benefit, adding, "Despite President Bush's cross-country dog and pony show, millions of seniors have yet to sign up for a prescription drug plan."
Robert Hayes, president of the Medicare Rights Center, said the numbers show that more than 80% of the lowest-income beneficiaries have not been enrolled in the Medicare drug benefit and that "less than 20%" of beneficiaries overall have "new drug coverage" (CQ HealthBeat, 4/20). Hayes added administration officials do not want to extend the enrollment deadline because "[t]hey want to maximize the pressure," noting, "[C]ome May 15th, if the enrollment remains low, that may well be when the president says, 'let's extend it'" (Richmond Times-Dispatch, 4/21).
Dan Mendelson -- president of Avalere Health, a health care consulting firm -- said relatively healthy beneficiaries have not enrolled in the benefit in large numbers because they think they do not need it, adding, "Those are really the people you have to worry about" (CQ HealthBeat, 4/20).
In related news, the Wall Street Journal on Friday examined how the number of beneficiaries who are "actually enrolled" in the drug benefit is lower than 30 million, "[d]espite the headline on an [HHS] press release -- '30 million Medicare beneficiaries now receiving prescription drug coverage.'" The 30 million estimate includes 3.5 million individuals who receive coverage through TRICARE or the FEHB Program, "but aren't signed up for the Medicare benefit," meaning about 26.5 million beneficiaries currently are "benefiting from the Medicare drug program," the Journal reports.
Of that total, 5.8 million previously had drug coverage through Medicaid and were enrolled automatically, and an additional 6.8 million receive drug coverage through their former employer, who receives subsidies from Medicare.
HHS spokesperson Christina Pearson said all beneficiaries "were able to make the choice that works best for them" because of the new drug benefit, regardless of their source of coverage.
Some critics of the drug benefit have said the administration has revised its enrollment goals since the program was created or otherwise altered the enrollment count to meet projections, the Journal reports.
However, Pearson said, "We've consistently said our goal was 28 to 30 million, [a]nd by any measure we've surpassed that goal" (Lueck, Wall Street Journal, 4/21).
Two newspapers on Friday examined issues related to the drug benefit. Summaries of the articles appear below.
Los Angeles Times: The Times examined how the cost of drug coverage for beneficiaries will increase slightly next year because of stipulations in the 2003 Medicare law. Medicare officials announced recently that the cost increase likely will be about 7% for next year, the Times reports. In addition, the so-called "doughnut hole" -- the gap in drug coverage -- could change to between $2,400 and $5,451 (Alonso-Zaldivar, Los Angeles Times, 4/21). The current coverage gap requires beneficiaries to pay for 100% of drug costs between $2,250 and $5,100 (California Healthline, 4/10). McClellan said drug plans "could keep the beginning of the doughnut hole in about the same place," adding, "It could look very similar to what the coverage is this year" (Los Angeles Times, 4/21).
- Wall Street Journal: The Journal examined how the drug benefit already "has produced clear winners and losers among businesses and seniors." The "early winners" include large health insurers, who "have snagged roughly 15 million new customers and healthy government subsidies" under the program. UnitedHealth, which offers an AARP-endorsed plan, is "[b]y far the biggest winner" and has enrolled more than 3.9 million new customers through the drug benefit. Pharmaceutical companies also have been "buoyed" by the drug benefit, with some drug makers reporting increased demand for certain treatments used by seniors. Smaller insurers "are seeing only minimal enrollment gains." Large retail drug stores have seen "some cuts in profit," but some big chains, such as Walgreen and CVS, predict profits will improve in the long-term as customer volume increases. Independent pharmacists have "complain[ed] that they are being driven out of business" because of slow payments and lower reimbursement rates than under Medicaid (Lueck/Fuhrmans, Wall Street Journal, 4/21).
Several newspapers recently published two editorials and a letter to the editor that addressed physician reimbursements and the prescription drug benefit. Summaries appear below.
Boston Globe: American Medical Association President J. Edward Hill "made a strong case this week" for increased Medicare reimbursements to physicians, but his "arguments would be more persuasive if he and his organization endorsed the repeal of some of President Bush's tax cuts, so the government could afford to pay the higher rates," a Globe editorial states. According to the editorial, Hill proposed to address the issue of the uninsured through "a combination of tax credits and individualized policies," funded by a tax on employee health insurance. The proposal is "intriguing," but "coverage would be more affordable if it could rely on other federal revenue," such as a "good dose of new tax money," the editorial states (Boston Globe, 4/21).
Salt Lake Tribune: The Medicare prescription drug benefit is "mind numbing" and "makes the tax code look simple," and Congress should "give America's seniors an extra month to get the help they need to figure it out without paying a penalty," a Tribune editorial states. According to the editorial, 48 senators have signed a letter that calls for an extension of the deadline, and other lawmakers "should give that ball a push" (Salt Lake Tribune, 4/20).
- Robert Goldberg, USA Today: The failure by Brad Woodhouse, communications director for Americans United, to state in a recent USA Today opinion piece that the group is "largely funded by labor unions and Democrats" is "just the beginning of the half-truths," Robert Goldberg, vice president of the Center for Medicine in the Public Interest, writes in a USA Today letter to the editor. According to Goldberg, Woodhouse would "essentially eliminate private-sector competition" from the Medicare prescription drug benefit and would "have the government force drug companies to sell products at prices" similar to those received by the Department of Veterans Affairs, although the program currently allows beneficiaries to "choose a plan that offers more of the medications and spend less of their own money than the VA requires." He concludes, "Why are Woodhouse and his group united against the future of innovation, freedom of choice and health of seniors?" (Goldberg, USA Today, 4/21).
NPR's "All Things Considered" on Thursday reported on enrollment in the Medicare prescription drug benefit. The segment includes comments from Hayes; Jacqueline Kosecoff, CEO of drug programs at United Healthcare; Leavitt; and McClellan (Rovner, "All Things Considered," NPR, 4/20).
A transcript of the segment is available online. The complete segment is available online in RealPlayer.