Washington, D.C. – A report released today found that the vast majority of new Medicare Part D beneficiaries already had prescription drug coverage before the program started earlier this year and, in an effort to downplay this situation, the Administration has significantly lowered its own enrollment projections. The report also found that, of those eligible for the low-income subsidy, only a very small fraction have actually been enrolled in the program.
The analysis, released by the consumer health organization Families USA, shows that—according to the Administration’s original estimates—the program’s performance is falling well short of expectations. This analysis looked at three critical issues:
1. The yardstick for measuring success has changed significantly over time.
According to the report, in January 2005, the Administration had predicted that 39 million beneficiaries would have drug coverage. However, by the end of 2005, the Administration had scaled back its projection to only 28 to 30 million beneficiaries.
2. Although many people are now counted as being enrolled, most of them already had coverage.
The report shows that through mid-January 2006, only 3.6 million new beneficiaries had enrolled in stand-alone Part D plans. The other 20.7 million already had coverage before the start of the Part D program. If enrollment continues at this same pace, it will fall far short of the Administration’s official estimate from last year.
3. The program is reaching too few of the people in greatest need of prescription drug coverage—seniors and people with disabilities who qualify for the low-income subsidy (or “Extra Help”) that accompanies the Part D program.
A key objective in the creation of the Medicare drug benefit was to ensure that low-income seniors and people with disabilities would be able to afford the prescriptions they need. To date, the performance of the Part D program for low-income beneficiaries has been a profound disappointment. Dual eligibles—those with both Medicare and Medicaid coverage—have endured a chaotic transition to Part D.
Other beneficiaries with limited incomes and assets qualify for a separate subsidy program for which they must apply. So far, only one out of five of those who need to apply for this separate program have actually signed up, and fewer than 5 percent of those eligible have completed the process and enrolled in a Part D plan to receive prescription drug coverage.
“Figures released in January show that 24 million seniors have been covered by Part D so far,” said Ron Pollack, Executive Director of Families USA. “However, the Administration is being very disingenuous with its figures, since the overwhelming majority of those covered had drug coverage before the program started on the first of the year. Even worse, the seniors who need it the most are the ones facing the biggest obstacles. Unbelievably, only 5 percent of low-income seniors have enrolled.”
It is too early to determine why so many millions fewer are enrolling in the drug benefit than projected only last year. Some of the reasons point to the complexity of the program and the considerable costs for most beneficiaries. Regardless of the reasons, there will be serious consequences if low enrollment persists in Medicare Part D:
1. Beneficiaries won’t be getting the drug coverage they need.
2. There is a late enrollment penalty equal to 1 percent of the average premium per month. Most beneficiaries who do not enroll in Part D on time will have to pay this penalty for as long as they stay in Part D—generally for the rest of their lives.
3. Continued low enrollment in Part D could jeopardize the long-term fiscal viability of the Part D program.
“It is truly disappointing to see such a large number of seniors not get the benefits to which they are entitled,” said Pollack. “What’s also disappointing is that, instead of correcting many of the underlying problems, the Administration is trying to simply move the goalpost to portray success in a program that has so far produced rather meager results.”
See full report.
