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Medicare sign-ups off to ‘strong start’

Fri., Dec. 23, 2005

WASHINGTON – Seniors are signing up for the new Medicare prescription benefit at a strong pace, the government said Thursday, but some independent experts said a closer look at the data reveals that many potential beneficiaries remain on the sidelines.

More than 21 million seniors and disabled people are now enrolled in one of the private plans that will help with their prescription coverage once the benefit takes effect Jan. 1, Health and Human Services Secretary Mike Leavitt said, adding: “This is a very strong start.”

But more than 90 percent of those who have enrolled so far already had drug coverage – either through former employers, the Medicaid program or military and federal retirement systems – federal officials acknowledged. Most did not have to take any steps to change their drug coverage, and may not even realize that Medicare will soon be subsidizing part of it.

Beyond those who already had some form of drug coverage, only about 1 million beneficiaries have signed up thus far for one of several hundred private drug plans that offer the Medicare drug coverage.

“It is difficult to claim success based on these numbers,” said health economist Jack Rodgers of PricewaterhouseCoopers LLP. “What the numbers show is that people who have to do something to enroll in the benefit are not enrolling. The jury is still out.”

The original Medicare program, however, was simpler than the drug benefit, which has been called one of the most complex social benefits ever devised by the federal government. The drug program has also been a subject of controversy, with critics attacking its complicated provisions and some charging that it will unduly benefit the drug companies.

Enrollment is critical to the success of the program, which uses private insurance plans to deliver a benefit subsidized by the government at an expected cost of $700 billion over 10 years. The more seniors who take the coverage, the higher the likelihood that insurers will stay in the program. And a large risk pool helps to keep costs down.

“They have gotten the easy half,” said James Firman, president of the National Council on the Aging, whose group is helping to sign up seniors. “This is the half that we could kind of count on.”

But the government is going to have to keep signing up an average of about 1 million beneficiaries a month to meet its enrollment goal, Firman estimated.


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