Will red tape seal up drug-benefit plans?

With the election over, the Bush administration's plan to provide prescription drugs to the elderly and disabled - bashed by critics as expensive and ineffective - enters an important phase and is hurtling toward an even more daunting one next year.

Beginning this week and lasting through 2004, Medicare recipients who already have discount prescription-drug cards can elect to switch companies for 2005 to try to find one that better meets their needs. Medicare officials are also urging low-income people who qualify to sign up for an extra $600 drug-assistance benefit.

But the major action will take place just over a year from now, when the drug-card program is replaced by a completely different drug benefit that takes effect Jan. 1, 2006. The program's biggest challenge isn't financial; it's bureaucratic. Medicare recipients must sign up for benefits. Critics doubt that vulnerable portions of society - the elderly, poor, and disabled - are up to the task of picking from a sophisticated array of options.

"They'll have to learn a whole new system that's much more complicated," says Leif Wellington Haase, a healthcare fellow at The Century Foundation in New York.

Among those who will have to sign up for the new program are 6.5 million low-income people whose drug benefits under another program, Medicaid, will terminate. Each will have to "opt in" to receive benefits; there will be no automatic coverage.

"It's mind-boggling to think of shifting 6.5 million people from Medicaid to various private plans under Medicare in six weeks [at the end of 2005] seamlessly," says Patricia Neuman, director of the Medicare Policy Project at the Kaiser Family Foundation.

Unless these people sign up by Jan. 1, 2006, they will lose their drug benefits and could stop taking their prescriptions, she says. A public education campaign is needed to alert Medicare and Medicaid recipients to the changes, she adds.

"We're asking people to take more responsibility for wading through their healthcare information, which is very, very difficult and very complex," says Deane Beebe, a spokeswoman for the Medicare Rights Center, a consumer group that helps seniors and the disabled sort out their Medicare options. Among those who will have to understand the new program and sign up for it are people with mental disabilities or poor reading skills, and those who don't speak English as a first language. Understanding how to choose these new benefits "is a daunting task for anybody, even a healthy person," Ms. Beebe says.

The federal government knows it has a challenge ahead and is putting top priority on helping low-income people "to be sure that they don't fall through the cracks," says Leslie Norwalk, deputy administrator of the Centers for Medicare and Medicaid Services (CMS), part of the Department of Health and Human Services.

Because low-income people have been served through Medicaid in the past, she says, "this is not a population that Medicare has ever tried to reach before.... We're hoping to learn all that we can through the [temporary] drug card [program], so that when the [full] drug benefit comes into place in 2006, we'll know better how to reach this particularly vulnerable population."

The existing discount-drug cards, which became available in June, are part of the Medicare Modernization Act signed into law in December 2003.

CMS has identified about 10 million people who lack other drug coverage and could benefit from the program. But so far only about 5.8 million have signed up, and about 2.5 million of them were automatically enrolled through belonging to a health maintenance organization. Most of the rest had to learn about the program themselves and then choose among dozens of competing cards, depending on their personal needs.

Drug-card holders save an average of 10 to 60 percent on the retail cost of drugs, according to CMS estimates. But many people have concluded that they can find prescription drugs more cheaply elsewhere, such as by searching the Internet, buying from Canada, using a state-funded program, or getting free samples from their doctor.

Many also are aware that they can sign up for the discount card at a later date if they change their minds. In an August study of people on Medicare, 53 percent said they thought discount cards "aren't worth the trouble because they don't do enough to help people with their drug costs and are too confusing to use," concluded the Kaiser Family Foundation and Harvard School of Public Health, which conducted the study. Moreover, 62 percent said they hadn't decided whether signing up for the full Medicare drug benefit beginning in 2006 would be worth it.

But that wait-and-see attitude may not be the best strategy. After the initial sign-up period ends on May 15, 2006, a rate hike of 1 percent per month will penalize those who apply later. The higher monthly cost will be in effect as long as they stay in the program.

While that crucial 2006 deadline looms, the CMS is still trying to get the word out about the temporary discount drug cards, which many eligible people still don't know exist. It's spending $3.95 million working with local community organizations to enroll more people.

Even with such efforts, the CMS doesn't expect to get everyone who is eligible into the program, Ms. Norwalk concedes. After all, "there's a whole host of Medicare beneficiaries who don't take drugs," she says. "And lucky them."