Medicare Drug Benefit Outlined in Campaign

The CMS logo appeared prominently in an eight-page insert in Parade magazine on Sept. 25. The insert, containing photos of smiling seniors, gave a concise overview of the drug benefit and told readers to expect more information soon. Another is planned for Sunday.

Not all has gone smoothly. Last week, 38.5 million households began receiving the annual "Medicare & You" handbook in the mail, and some of its details about prescription drug plan choices are wrong.

A chart on Page 97A says that all of the plans listed charge no premium for qualifying low-income seniors, a group of about 14 million. In fact, only about 40 percent of the listed plans do so, raising concerns that some Medicare participants would mistakenly sign up for plans that they do not want or cannot afford.

The agency does not plan to mail a correction, but the Medicare Web site has a corrected chart, CMS spokesman Gary Karr said. Plan providers must tell low-income beneficiaries whether the plan they have selected offers a zero premium or not, he said.

The drug benefit, passed by Congress in 2003, represents the biggest expansion in Medicare since the program began 40 years ago. It is expected to cost the government $720 billion in the first 10 years.

Ten large insurance companies and several regional providers have been approved to begin marketing coverage plans to seniors as early as this month. Medicare officials say dozens of options will be available, with monthly premiums ranging from less than $20 to about $40.

"People do get daunted by a lot of choices," said Cheryl Matheis, director of health strategies for AARP, a partner in the Medicare agency's outreach efforts. AARP will provide seniors with explanations of the benefit options and help walk them through the key factors when deciding what kind of coverage, if any, to select, Matheis said.

Although private insurers will offer a variety of plans, the congressionally mandated base line benefit will work like this: After an individual pays a $250 annual deductible, Medicare will cover 75 percent of drug costs up to $2,250. The coverage then stops until the recipient has spent an additional $2,850 out of pocket, after which Medicare covers 95 percent of drug costs.

Critics have dubbed the gap in coverage the "doughnut hole" in the benefit and say explaining it will be a difficult but critical element in any effective campaign.

"You listen to the promotions from CMS and the administration, and it was the best thing since sliced bread," said Robert M. Hayes, president of the Medicare Rights Center, a group that helps seniors navigate Medicare rules and benefits. "And then you sit down with people and they say, 'What do you mean -- that's all it is?' "

Hayes said he thinks one-on-one counseling, not ads, will be the most effective way to educate seniors. His organization is training volunteers to walk seniors through the options. "There's a world of difference between 'promotion' and 'education,' " Hayes said. "Almost all of the administration's efforts, and the drug companies' efforts, are promotional. Unless they throw more resources into one-on-one counseling, people with Medicare will be burned big time."