Medicare to Swallow Medicaid Drug Benefit

Sunday marks the start of Medicare's new prescription drug benefit.

For most of Medicare's 43 million enrollees, the program is voluntary and the deadline to sign up isn't until May.

But as of January 1, 6.5 million of the poorest and most vulnerable beneficiaries will lose their existing drug coverage, currently provided through the Medicaid program.

They're supposed to be automatically switched to a new Medicare plan instead. But at least some may be slipping through the cracks.

Andrew Kotz of suburban Chicago is one of those people. He's disabled, and gets his health coverage through both Medicaid and Medicare, which the government calls a "dual eligible."

But because Kotz only qualified for Medicare last fall, he didn't get automatically signed up for a new Medicare drug plan.

"I'm supposed to be in the computer, but it's just not coming out that way, and I'm not going to know what happens until sometime in January," he says.

How Kotz gets his drugs is no minor matter.

"I'd spend about $1,500 a month, if I wasn't getting covered," he says. "So this is a big worry to me, because nothing's going to cover it like the Medicaid alone covered it."

Kotz turned to the Chicago-based Health and Disability Advocates for help. His lawyer, Stephanie Altman, says he got caught in a bureaucratic catch-22.

When he didn't get automatically enrolled in a plan, she tried to at least sign him up for another program available to those with low incomes, but that didn't work, either.

"The Social Security Administration says they can't accept an application from him for extra help because he's supposed to be automatically assigned by the state as a Medicaid recipient," she says. But at the same time, "the state's saying 'we didn't have him on our list, and we didn't turn him over to the federal government.'"

Altman says she was ultimately able to get Kotz enrolled in a Medicare drug plan on a handwritten list, but it's not clear if that will work when he goes to get his prescriptions filled.

She says Andrew Kotz is hardly alone.

"We know there's thousands of people like him that the data match didn't catch, and they may be without prescription drug coverage, showing up at a pharmacy on January 1 with a Medicaid card that doesn't cover their drugs."

Mark McClellan says he's confident that won't happen. McClellan heads both the Medicare and Medicaid programs for the federal government.

"If there is a problem with the computer information we have fallback systems in place that enable a pharmacist to fill a prescription," he said, "even if [a patient doesn't] have any specific information on the plan they're in."

And while the initial transition may be rocky, McClellan says those switching from Medicaid to Medicare drug coverage should find themselves better off.

"In many cases they are going to have significantly better prescription drug coverage because the [drug lists] are broader," McClellan says, "and because the Medicare program will not impose limits on the number of prescriptions or the number of drugs in the same way as many state Medicaid plans do."

But others aren't so sure.

Many Medicaid beneficiaries are finding their out-of-pocket costs are going up with the new Medicare plans, at least at first, or that they can't use their regular pharmacy. And the "dual eligibles" are among those least able to navigate insurance complexities. On average, they are older, sicker, and more likely to have cognitive impairments than other Medicare patients.

So at least one city is installing its own contingency plan — treating the transition like a potential public health emergency.

"The federal government has set up a backup and we're very hopeful that it works," says Joshua Sharfstein, health commissioner for the city of Baltimore.

Still, starting Sunday, pharmacies in Baltimore will be asked to report any problems with the new Medicare drug benefit, and for the city's 28,000 low-income residents, there will be an immediate option, Sharfstein says.

"If the pharmacist feels like there's a low income senior or disabled person who they would be sending out without the medicines they need," Sharfstein says, "they'll be able to reach someone at the health department 24 hours a day and we've set aside $50,000 to pay for medicines in a pinch if we can't figure out how to get the insurance system to work."

The city will also collect reports from hospital emergency rooms of Medicare and Medicaid beneficiaries suffering from ailments caused by not taking their medications, particularly high blood sugar in those with diabetes.

Sharfstein says he hopes all the preparation will be similar to what took place with the world's computer systems just before January 1, 2000 — "a lot of anxiety up front and then on the other side a big sigh of relief. That would be great," he says. But he adds, he's ready one way or the other.

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