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Medicare drug cards produce confusion { July 29 2004 }

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Medicare drug cards produce some savings, much confusion
Thursday, July 29, 2004
By Sarah Kellogg
Washington Bureau
WASHINGTON -- Seniors who put off signing up for the federal government's new Medicare drug discount card because the paperwork seemed way too confusing are definitely not alone.

Enrollment nationally is sluggish due to confusion about which card to pick and what benefits come with it, a report released Wednesday by the Kaiser Family Foundation, a nonprofit health advocacy group, shows.

"As a beneficiary you have this bewildering array of choices," said Beth Fuchs, one of the report's authors. "But maybe it wouldn't be quite so bewildering if there was more information available on these cards."

Four million of the nation's 41 million Medicare beneficiaries have signed up for the cards, which took effect June 1. The Bush administration hopes to have 7.3 million card-carrying seniors by 2005.

Mark McClellan, administrator of the Centers for Medicare and Medicaid, conceded that there have been startup problems, but he said the government is continually trying to simplify the process.

"This is a work-in-progress," said McClellan. "We're working to make progress on lowering Medicare beneficiary drug prices....We're going to keep working to make sure we're doing all we can to get more beneficiaries more savings."

The discount cards, which are offered by 34 companies nationally, were designed to save participating retirees as much as 15 percent on the cost of drugs at every purchase. The poorest seniors receive a $600 subsidy for drug expenses in both 2004 and 2005.

The report found that some cards do provide significant savings - as much as 30 percent off the full retail price of certain drugs when customers pay cash. Prices and savings varied widely, however, among the different cards and different drugs reviewed.

All Medicare beneficiaries are eligible for the discount cards except those who have full coverage under Medicaid. Of the 7.2 million beneficiaries eligible for the $600 subsidy, only about 1 million have applied for it.

Michigan health care advocates say confusion reigns because seniors just don't know whom to trust. The federal government has not reported how many of Michigan's 1.4 million seniors signed up for the cards.

"Maybe it's because nobody really believed that the discount was going to be reliable or that large," said Beverley McDonald, a spokeswoman for the Michigan Health Care Coalition, an advocacy group for state health care organizations. "Maybe they don't want to get into the whole complex system. Maybe they don't know the cards even exist. There could be any number of reasons, but it's clear the government hasn't done enough to ease their fears or inform them."

The Bush administration has spent about $50 million on everything from creating a Web site to buying TV advertising to educate seniors about the program.

For at least 10,000 Michigan seniors, the choice was made for them. The Michigan Department of Community Health automatically enrolled low-income seniors who were eligible for the state's pharmacy assistance program, known as the Elder Prescription Insurance Coverage program or EPIC. The seniors did have the opportunity to opt out, but only about 200-300 have.

Michigan officials said they expect to save $5 million in fiscal 2004 and another $5 million in 2005 by signing up EPIC beneficiaries for the $600 subsidy.

"Michigan continues to have an extremely constrained budget situation," said Paul Reinhart, director of the state's Medicaid program. "It made fiscal sense for us to encourage the low-income folks who were eligible to apply for the $600. That would reduce our Elder Prescription Insurance Coverage costs."

To qualify for the $600 subsidy, a person must earn below 135 percent of the federal poverty line, which is about $12,569 annually for a single person and $16,862 for a couple.

The cards will be replaced in 2006, when the government establishes a prescription drug benefit under Medicare.

Michigan senior citizens looking for guidance can contact the Michigan Medicare/Medicaid Assistance Program, a government-funded health counseling service, at 800-803-7174, or they can call the federal government's helpline at 800-633-4227.




Contact reporter Sarah Kellogg at (202) 383-7810 or e-mail her at skellogg@boothnewspapers.com.



© 2004 Booth Newspapers. Used with permission


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