Archive for Friday, December 23, 2005

1 million sign up for new Medicare drug plans

December 23, 2005


— More than 1 million people voluntarily signed up for the new Medicare drug benefit in the first four weeks of a six-month enrollment period. The Bush Administration on Thursday said the number as of Dec. 13 will bring a total of 21 million or more elderly and disabled Americans who will have insurance coverage for prescription drugs come Jan. 1.

The total includes retirees who have already had drug coverage through their employers or unions, people enrolled in managed-care plans and other arrangements that are receiving enhanced subsidies through the federal Medicare health insurance program for the elderly and disabled.

Momentum behind the Medicare drug plan is critical to the administration as well as the drug plan itself because any form of insurance needs a large number of participants to remain viable. Shares of at least one health insurance company with a large stake in administering Medicare drug coverage soared more than 10 percent on Thursday to a 52-week high.

The administration said it is well on its way to getting a grand total of 28 million to 30 million seniors and disabled people covered under various private and federally subsidized drug plans by the end of 2006. That means the administration needs to add another 7 million to 9 million to reach its goals.

Critics were quick to pounce on the administration's announcement, saying most of the 21 million people already had drug coverage.

But Bush administration officials appeared confident Thursday that they would reach their goal, believing the biggest push will come just before the May 15 deadline for sign-up for the new federal drug benefit, the largest expansion of the Medicare program since its creation. Those eligible began signing up Nov. 15.

"There is a lot of momentum behind strong, early enrollment," said Dr. Mark McClellan, head of the Centers for Medicare & Medicaid Services.

The federal government plans to spend more than $700 billion during the next 10 years to provide drug coverage under Medicare as part of a landmark bill passed by Congress and signed into law two years ago by President Bush.

The federally funded plan is designed to be administered by private companies. That aspect has been the most controversial because dozens of private plans are marketing products to seniors who have been vocal about being overwhelmed and confused.

Robert Hayes, president of the consumer group Medicare Rights Center, said seniors have been "offered a subsidized industry of profit-making insurance plans hawking incomprehensible benefit packages."

Furthermore, critics said the release showing more than 21 million people will have drug coverage is misleading.

"Almost all of them already had drug coverage through their employers, the Veterans Administration, Medicaid (health insurance program for the poor) or a Medicare HMO," said U.S. Rep. Jan Schakowsky, D-Ill., who is pushing legislation that would give seniors more time to pick a drug plan.

"Only 1 million beneficiaries were able to navigate through the dozens and dozens of confusing plans and actually purchased coverage on their own," she added. "The CMS numbers show that half of all beneficiaries still have these difficult choices before them."

Still, administration officials say most of the additional 1 million seniors are people who did not have drug coverage in the past.


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