Medicare's New Prescription Drug Law's $720M Challenge

Article excerpt

Lots of money is available under the new Medicare prescription drug benefit, which will go into effect on Jan. 1, 2006, and advocacy groups are working hard to make sure none of the cash goes unclaimed by those who need assistance. But a new report estimates that fully enrolling those eligible for the program's low-income aid will cost at least $720 million. (See additional article on this page.)

The new law, which provides Medicare's first prescription drug coverage outside of healthcare institutions, will require that most beneficiaries pay an average premium of about $37 a month with a $250 annual deductible and copayments. The complicated program also includes the much-debated "doughnut hole," the gap offering zero coverage between the first $2,250 in coverage (after the deductible) and $5,100, when protection against catastrophic costs kicks in. But for 14.4 million low-income and moderateincome beneficiaries, the law offers extra financial help to deal with these expenses.

The prospect of providing an average of $2,100 a year for each eligible individual has generated unprecedented determination and cooperation in the health-advocacy world. More than ioo nonprofit groups are united through the Access to Benefits Coalition, or ABC (www.accesstobenefits.org), which is striving to locate and enroll the millions of people who will be eligible for financial help under the new law. "Some backed the legislation passed by Congress in 2003, others opposed it and some even hate each other, but all agree this is an important benefit," said James P. Firman, president and CEO of the National Council on the Aging (NCOA), Washington, D.C., which manages the coalition.

NOT EASY TO REACH

However, it is not easy to reach all the potential lower-income beneficiaries, and that is the reason for the extraordinary cooperation among private groups and government agencies. Reaching this population is not easy, for reasons ranging from bureaucratic barriers for applying, to low levels of-proficiency in the English language. Already, among eligible people ages 65 and older, only 69% are enrolled in Medicaid, the federalstate health program for the poor; just 30% receive food stamps; and merely 33% are enrolled in a program that helps pay their monthly electric and gas bills.

The federal government estimates that 29 million of the 45 million Medicare beneficiaries will enroll in the Medicare Part D prescription drug program. Medicare covers those age 65 or older and people with disabilities of all ages. About 7.2 million are dual eligibles, people on both Medicare and Medicaid. They will be automatically enrolled in" a Part D program, with the federal government taking over responsibility from the states for the payment of their prescriptions. Another 7.2 million, people whose earnings and assets are a little too high to qualify for Medicaid, will have to find out about the program and enroll for the financial aid. Enrolling low-income beneficiaries is an intricate process because the law has several different income and asset standards. …