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Sunday, New Year's Day, 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 is not until May. But for six and a half million of the poorest and most vulnerable people, Sunday is a critical day. These are the people who've been getting drugs through the Medicaid program, and that program is about to expire. Everybody is supposed to be switched automatically to a new Medicare program, but as NPR's Julie Rovner reports, some people may have trouble in the new year.

JULIE ROVNER reporting:

Andrew Coats(ph) is disabled and gets his health insurance through both Medicaid and Medicare, making him a so-called `dual eligible.' But because he only qualified for Medicare last fall, he didn't get automatically signed up for a new Medicare drug plan.

Mr. ANDREW COATS: I'm supposed to be in the computer, you know, but it's just not coming out there. We're not really going to know what happens until some time in January.

ROVNER: How Coats gets his drugs is no minor matter.

Mr. COATS: I spend about $1,500 a month, if I wasn't getting coverage. So, you know, this is a big worry to me because nothing's going to cover it like the Medicaid alone covered it.

ROVNER: Coats turned for help to the Chicago-based Health and Disability Advocates. His lawyer, Stephanie Altman, said 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.

Ms. STEPHANIE ALTMAN (Lawyer): But we've been stymied. 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 Medicare recipient. The state's saying, `We didn't have him on our list and we didn't turn it over to the federal government.'

ROVNER: Altman says she was ultimately able to get him enrolled on a handwritten list, but it's not clear if that will work. And she says Andrew Coats is hardly alone in his plight.

Ms. ALTMAN: We know there's thousands of people like him that the data match perhaps did not catch and they may be showing up at, you know, their local pharmacy on January 1st with a Medicaid card that doesn't cover their drugs.

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

Mr. MARK McCLELLAN: If there is a problem with computer information, we have fallback systems in place that enable pharmacists to fill a prescription for the duals, even if they don't have any specific information on the plan that they're in.

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

Mr. McCLELLAN: In fact, in many cases they are going to have significantly better drug coverage because the formularies are broader and because the Medicare program will not impose limits on the number of prescriptions in the same way as many state Medicaid plans do.

ROVNER: 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. They are on average 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. Joshua Sharfsteon is the health commissioner for the city of Baltimore.

Mr. JOSHUA SHARFSTEON (Health Commissioner, Baltimore): The federal government has set up a backup and we're very hopeful that it works.

ROVNER: 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.

Mr. SHARFSTEON: If the pharmacist feels like there's a low-income senior, disabled person who they would be sending out without the medicines that they need, they'll be able to reach someone at the Health Department 24 hours a day and we'll--we've set aside $50,000 to pay for medicines in a pinch.

ROVNER: The city will also collect reports from hospital emergency rooms of Medicare and Medicaid beneficiaries suffering from ailments caused by not taking their medications. Sharfsteon says he hopes all the preparation will be similar to what took place with the world's computer systems just before January 1st, 2000.

Mr. SHARFSTEON: A lot of anxiety up front and then on the other side a big sigh of relief. That would be great.

ROVNER: But he says he's ready one way or the other.

Julie Rovner, NPR News, Washington.

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