US Newspapers Examine Issues Related to New Medicare Drug Benefit

Main Category: Medicare / Medicaid / SCHIP
Article Date: 01 Jun 2005 - 9:00 PDT

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Several newspapers recently examined issues surrounding applications for prescription drug assistance available under the new Medicare drug benefit. The federal government on Friday began mailing letters to almost 20 million low-income Medicare beneficiaries asking them to fill out a five-page application to determine eligibility for additional financial assistance under the new Medicare prescription drug benefit. Summaries of the articles appear below.

• Philadelphia Inquirer: As many as 2.4 million low-income Medicare beneficiaries will "miss out on generous savings" when the new Medicare prescription drug benefit begins Jan. 1, 2006, because "they have too many personal assets," the Inquirer reports. Under the drug benefit, Medicare will pay 85% to 98% of prescription drug costs for the estimated 14.4 million beneficiaries with annual incomes below 150% of the federal poverty level. However, to be eligible for the additional assistance, beneficiaries also must have assets below $10,000 for an individual and $20,000 for a couple. According to a study by the Kaiser Family Foundation, millions of Medicare beneficiaries with annual incomes below 150% of the federal poverty level will not qualify for the additional assistance because of the value of their assets. The study found that many of these beneficiaries are older, widowed women with modest incomes who live alone. Study co-author David Rice, a researcher at the University of California-Los Angeles, said that he fears the extra costs of standard drug coverage -- including a $250 annual deductible, an average annual premium of $444 and the so-called "doughnut hole" in coverage - will dissuade many low-income beneficiaries from enrolling. Gary Karr, a spokesperson for CMS, said the asset requirement is designed to ensure the neediest beneficiaries receive coverage (Pugh, Philadelphia Inquirer, 5/31).
  


• Pittsburgh Post-Gazette: The Post-Gazette on Saturday examined how the letters recently mailed to low-income Medicare beneficiaries "mark the beginning of what is likely to be a confusing summer and fall for many Medicare" beneficiaries. According to the Post-Gazette, the letters mailed last week ask beneficiaries to complete a five-page application to determine whether they qualify to receive additional financial assistance under the new benefit. CMS spokesperson Peter Ashkenaz said the questions in the application are "the most basic [CMS] and Social Security can use to help make sure people are eligible for the extra help." However, according to the Post-Gazette, the application "asks for information that many [beneficiaries] may not readily know, such as the value of any stocks, bonds or other investments and the cash value of life insurance policies." The letters will be sent through mid-August, and beneficiaries will learn whether they are eligible for the additional assistance beginning in July, according to Social Security Administration spokesperson Mark Lassiter (Fahy, Pittsburgh Post-Gazette, 5/28).
  


• AP/Richmond Times-Dispatch: An early test run of the application for the new drug benefit indicates that "only two out of five" Medicare beneficiaries eligible for the additional assistance "will apply for that help," according to the AP/Times-Dispatch. Earlier this year, SSA mailed out 2,050 applications to low-income Medicare beneficiaries to gauge whether they could successfully complete the application for assistance and return it. About 40% of the applications were returned, and advocates for Medicare beneficiaries said the percentage would have been much lower if the government had not made phone calls to beneficiaries. "It's clear from these results that multiple one-on-one interventions are needed to ensure that millions of individuals eligible for this benefit actually do benefit," Diane Archer, founder of the Medicare Rights Center, said, adding, "What's not clear is the government's commitment to undertaking this massive and extremely costly outreach." Lassiter said at the time the applications were mailed, "There wasn't a lot of information about the program, so [beneficiaries] got this cold." Federal officials said they hope to improve on the return rate as the applications are sent out nationwide. SSA has developed fact sheets for some of the more confusing questions that posed difficulties during the test run, including instructions on estimating the cash value of insurance policies (AP/Richmond Times-Dispatch, 5/28).
  

Broadcast Coverage

• NPR's "All Things Considered" on Monday reported on the letters to Medicare beneficiaries. The segment includes comments from Pia Scarfó Allocca, health access coordinator for the Medicare Rights Center; Robert Hayes, president and general counsel of the Medicare Rights Center; and Mark McClellan, CMS administrator (Silberner, "All Things Considered," NPR, 5/30). The complete segment is available online in RealPlayer.
  


• APM's "Marketplace" on Friday reported that the combination of the new Medicare prescription drug benefit and an aging U.S. population makes pharmacy schools "one of the hottest" degree programs. The segment includes comments from Joseph Dean, dean of the McWhorter School of Pharmacy at Samford University; Justin Serrano, vice president of Kaplan Test Prep; and a pharmacy student at Samford (Ott, "Marketplace," APM, 5/27). The complete segment is available online in RealPlayer.

"Reprinted with permission from kaisernetwork.org kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation . © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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