Medicare Prescription-Drug Program Hits New Snag

There was good news and bad news Thursday about the new Medicare prescription-drug benefit. Medicare officials say the program has reached its enrollment goal of 30 million people. But as many as a half a million of those are getting letters warning them that they may soon be dropped from the program.

Health and Human Services Secretary Mike Leavitt spoke to reporters in a teleconference from California, where he was attending a sign-up event for the new drug plan. He said the administration's goal was to have between 28 million and 30 million of Medicare's 43 million beneficiaries getting drug benefits this year.

"Today, I'm announcing that we've surpassed that goal," he said. "There are now more than 30 million beneficiaries covered, and we still have 25 more days to go."

That would be 25 days until May 15, when enrollment is set to close for the year. About six million to eight million Medicare beneficiaries have yet to sign up, and if they miss the deadline, they'll have to pay higher premiums when enrollment resumes in January.

A growing chorus of lawmakers has been urging that this year's enrollment deadline be extended, but Leavitt maintained the administration's position.

"Government actuaries have notified us that if we don't have a deadline, fewer people will sign up," he said. "People need a deadline; and it's working."

Those who want a deadline extension point to the tremendous complexity of the program. They also got some ammunition this week: Hundreds of thousands of those who have signed up for coverage got a dunning letter from their drug plan. The letter says their premiums are overdue, and if they don't pay up, they'll be disenrolled from the program at the end of May.

But the overdue payments aren't the fault of the beneficiaries. Medicare and Medicaid Administrator Mark McClellan said that part of the problem is a backlog at the Social Security Administration. It's supposed to deduct the drug-benefit premiums from Medicare beneficiaries' Social Security checks if they select that option.

"At this point, Social Security is handling withholding for well over three million beneficiaries," McClellan said. "And as we said form the start, there's a bit of a lag from the time the beneficiary enrolls and the time the withholding starts."

That lag time is anywhere from 60 to 90 days, officials say. But Jacqueline Kosecoff, CEO of the drug programs run by insurance giant United Health Care, said the letters United sent out didn't go to those who asked for their premiums to be withheld by Social Security.

"We very carefully eliminated from the letters we sent anybody who'd signed up for the Social Security withhold, because as far as we're concerned, they're not delinquent," she said.

Rather, said Kosecoff, the letters were sent out as part of a process of trying to straighten out United's enrollment lists.

"As part of cleaning up that process, we also wanted to reach out to our members and make sure that if they think they're enrolled and should be paying premiums and we haven't seen it, that they're sending it to the wrong address," Kosecoff said. "That they think they're in the Social Security program when they aren't."

People who get the letters should call their drug plans or Medicare. Many are also calling senior health insurance counseling programs such as the New York-based Medicare Rights Center.

"We have basically been just trying to calm people down, let them know, once again. this is another kind of mistake made either by the federal government or the insurance companies or both," said Bob Hayes, the center's president.

Kosecoff insists that the misunderstanding will not cause anyone to be dropped from United's health-insurance plans.

But Hayes says this latest snag underscores an ongoing problem with the program.

"Every day, there's another trap door that people with Medicare are falling through. This is such a complex castle of cards — this design of the drug benefit has become — that inevitably, week after week, we're going to have another crisis, another scary moment for people," he said. "And at the end of the day, people are not getting the drug support that they need."

Whatever Congress decides to do about the deadline, the ultimate referendum on the program will come from the voters in November.



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