New Medicare Drug Benefit Might Be a Tough Sell

Medicare beneficiaries frequently are skeptical, wary consumers, and it will take lots of hard work to educate them about the new Medicare prescription drug benefit and then persuade them to enroll. Even if beneficiaries are aware that signing up could mean lower drug costs, many might balk at filling out forms and become confused into inaction by a number of companies offering prescription drug plans.

Throughout California, advocacy groups have been forming widespread alliances to reach out to often-skeptical seniors and try to convince them that enrolling in the drug benefit — the biggest Medicare expansion in 35 years — is worthwhile. Medicare Part D, which will provide prescription drug coverage for the first time under the program, will take effect Jan. 1, 2006.

For example, Aging and Independence Services in San Diego County, the local version of the federal network of Area Agencies on Aging, will host two “Meet the Pharmacist Days,” when local Medicare beneficiaries can bring in their prescription bottles and ask pharmacists any questions they might be afraid to pose to their doctor. At the events, held as part of the group’s outreach efforts, Medicare beneficiaries also will be invited to fill out an application to get extra financial help under the drug benefit.

The Alameda County Legal Services Center, on the other hand, is training the people who will answer detailed questions and inquiries from Medicare beneficiaries.

The center’s mission has been to train the front-line social workers and case managers who will be talking to Medicare beneficiaries — people ages 65 and older and people of all ages with disabilities.

“Our first focus has been to educate providers for people with disabilities,” Janet Van Duesen, manager of health insurance advocacy and counseling (HICAP) for the center, said.

National Enrollment Program

The primary mission for advocacy groups in California is to locate state residents who have incomes and assets low enough to be eligible for additional financial aid offered under Part D and help them enroll.

The Alameda County Legal Services Center and San Diego’s Aging and Independence Services are part of the Access to Benefits Coalition (ABC), a consortium of 100 diverse not-for-profit organizations working to reach and enroll more than seven million people nationwide who might be eligible for extra financial help under the drug benefit.

Medicare beneficiaries who are dually eligible for Medi-Cal will be automatically enrolled in a Part D plan, for which coverage begins Jan. 1, 2006. Even beneficiaries who do not qualify for Medi-Cal might be eligible for some additional financial help, depending on their income and assets.

Financial help is available for people whose annual incomes do not exceed 150% of the federal poverty level and have assets lower than $10,000 for an individual and $20,000 for a couple. However, beneficiaries have to fill out an application for the financial aid.

This additional assistance from the federal government could cover some or all of Medicare Part D plans’ expected monthly premiums of $32.20, the annual deductible of $250, the 25% copayment up to $2,250, and the gap in coverage between $2,250 and $5,100 in drug spending.

For example, the Kaiser Family Foundation commissioned an analysis of the financial help available for the group of people with annual incomes of as much as 135% of the federal poverty level — $12,920 for an individual and $17,321 for a couple — and financial assets less than $6,000 for an individual and $9,000 for a couple. According to the analysis, these beneficiaries will have no monthly premiums or annual deductibles and their only costs for drugs will be a $2 copay for generic prescriptions and a $5 copay for brand-name drugs.

In addition, all beneficiaries opting to participate in the drug benefit must choose a dispenser of Part D benefits. Starting Oct. 1, companies will begin flooding Medicare beneficiaries’ mailboxes with invitations to join one drug plan or another. These can include HMOs and PPOs, both of which will offer full networks of doctors and hospitals, as well as prescription drug coverage and stand-alone drug plans, which will provide pharmaceutical coverage exclusively to beneficiaries who opt to remain in the traditional program.

California, as one of the most competitive and desirable Medicare markets, might have 30 or more Medicare drug plans available. Beneficiaries will have an open enrollment period running from Nov. 15 through May 15, 2006, to select a plan.

Obstacles to Enrollment

Medicare beneficiaries will have to disclose their incomes and their financial assets — such as stocks, bonds, checking and savings accounts — to determine if they are eligible. Reluctance to disclose personal information, suspicion about the government, fear of being cheated, all might combine to make the task difficult for the advocates seeking to enroll people.

Tony Potter, health promotion manager for Aging and Independence Services in San Diego County, said that Medicare beneficiaries “are often suspicious; they don’t like to sign things; they will take the forms home and then forget it.”

It won’t be cheap to mount a sales campaign to entice reluctant beneficiaries. A recent report commissioned by ABC estimated that it would cost an average of $100 per person, or an estimated $720 million overall, to reach and enroll all the people entitled to additional financial assistance. “Reaching full or almost full enrollment will likely require hundreds of millions of dollars, millions of hour of one-on-one assistance to potential beneficiaries and well over a year to accomplish,” the report said.

“Current spending from government and private sources, falls far short of this number,” ABC stated in its report, titled “Pathways to Success: Meeting the Challenge of Enrolling Medicare Beneficiaries With Limited Incomes.”

The ABC report estimates that a total of 1.35 million California residents will be eligible for some type of low-income financial help. Most of them also are eligible for Medi-Cal and will be enrolled automatically for the new benefit, but 421,000 low-income people in the state will have to be located and persuaded to fill out the applications asking about their income and assets to qualify for additional assistance.

The heavy responsibility for education of beneficiaries will most likely fall on the health insurance advocacy and counseling programs in California and throughout the nation. These programs provide the experts at the grass roots who have been explaining Medi-Cal and Medicare for years.

However, it won’t be easy. For the past two years, a temporary drug discount card has offered 10% to 15% discounts on prescription drugs and a $600 annual subsidy for low-income beneficiaries, but only 25% of eligible beneficiaries nationwide signed up for the program.

James P. Firman — president and chief executive officer of the National Council on the Aging, which organized the ABC coalition — said that reaching those who qualify for financial help and persuading them to accept it is “an incredible opportunity and an incredible challenge.”

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