U.S. Health Secretary visits Warwick center
You’d think it would be a slam-dunk: Seniors spend a fortune on prescription drugs. Starting Jan. 1, the Medicare Part D program will cover most of the cost. For low-income seniors, the coverage is even more generous. All everyone has to do is sign up.
Beyond Cash Donations: How New Forms of Giving Are Transforming Not-for-Profit Accounting
Evolving Funding Landscape for Not-for-Profits Not-for-profit organizations are being asked to do more with less,…
Learn More
So why do government officials keep talking about how difficult it’s going to be? Why has U.S. Health and Human Services Secretary Michael Leavitt launched a national bus tour just to promote the Medicare prescription drug benefit?
“This is a communication effort,” Gov. Donald L. Carcieri explained during Leavitt’s stop in Rhode Island, at the Buttonwoods Senior Center in Warwick, on July 15.
“It’s going to be complicated,” said U.S. Sen. Lincoln C. Chafee, “so we’re all going to get together and make sure it goes smoothly.”
Here’s how complicated: 43.1 million Medicare recipients, including more than 152,000 Rhode Islanders. About 1,000 Part D plans under consideration by the Centers for Medicare & Medicaid Services, meaning dozens of potential choices in each region.
And most of the details won’t be available until October.
So at every stop, Leavitt is trying to persuade seniors to pay $30 to $40 a month for a benefit he can’t really explain in detail, except to say each plan will cover drugs to meet every medical need, that no one will spend more than $3,600 out of pocket, and that the poor will pay nothing.
But since CMS is allowing considerable variations, Leavitt can’t really tell anyone just how much they’ll save, or whether their Zocor or Plavix or Nexium will be covered.
CMS expects the typical beneficiary to pay $37 a month and get help worth $1,300 in 2006 – a nearly threefold return on the investment.
For context, the Kaiser Family Foundation has estimated that the average senior will use $3,160 worth of drugs next year. But usage varies dramatically: 10.2 percent won’t spend a dime, and 24.1 percent will spend under $1,000, while 19.6 percent will spend more than $5,000, accounting for nearly 58 percent of total drug costs among seniors.
For the latter population, and the other 46.2 percent who’ll need $1,000 to $5,000 worth of drugs, the Medicare drug benefit is an easy sell, especially if they don’t have any drug coverage now. With them, federal and state officials are focusing on ensuring they apply for extra subsidies if they’re poor, and that they choose their plan carefully to maximize their benefits.
For low-income seniors already getting drug benefits through Medicaid, the process is more complicated for the government, which has to transition them all, but again, there’s not much selling to do here – the focus is on assuring people that they’ll still get benefits at least as good as what they already have.
The toughest sell is for healthy seniors, who tell Leavitt they don’t see the point of spending hundreds of dollars to get little, if any, benefit. For people like them, Leavitt had a message during his Warwick visit: Sign up anyway. “This is an insurance product, and if you buy it just before you need it, it’s very expensive,” he said. In fact, for anyone who doesn’t sign up in the first few months, premiums will be 1 percent higher for every extra month they wait.
The outlook for one other group is more complicated: the 11 million seniors with employer-sponsored drug coverage. Some will do better to switch, Leavitt said, while others can just stay put. Employers and unions will be sending out details to their plan beneficiaries in September notifying them of their options.
What the government doesn’t want, however, is for those drug plans to end, and to encourage employers to maintain them, the Medicare program is providing tax-free subsidies equal to 28 percent of costs between $250 and $5,000 per retiree for anyone providing benefits equal or better than Part D.
While the details get sorted out, Leavitt is focusing on the big picture – the “very good news” that help is on the way.
“The worry that seniors have had that their savings will be eroded because of a prescription drug problem will no longer be a part of their lives,” he told his audience in Warwick. And for anyone concerned about the logistics, he added: “If you’re a senior, don’t worry. There will be plenty of people to help you.”
