News Summary

Medicare's drug plan woes healing

ATLANTA — Medicare's drug benefit arrived at the right time for Anastasia Banko.

Banko, 85, took no prescriptions until October, when she suffered a heart attack. Her doctor put her on heart and cholesterol drugs that cost her $400 a month.

"I said to the doctor, 'Why did you put me on all the expensive medicines?' " she recalled with a laugh.

In January, Banko got interested in Medicare's new drug benefit, which had debuted that month. But the details seemed "totally confusing."

With help from an insurance counseling service, GeorgiaCares, Banko was able to navigate the Medicare maze, and now she's saving more than $200 a month. Drug costs for the former teacher are $193, which includes her plan's premium payment.

After an avalanche of consumer complaints, Medicare's new drug benefit has gained traction in performance and public acceptance. A litany of ailments plagued the January launch, but it appears that several technical problems have been resolved. Nationwide polls show that seniors who have enrolled are satisfied. Federal officials, meanwhile, are emphasizing average annual savings of $1,100 as they push for more sign-ups before the May 15 enrollment deadline.

Those signing up afterward will pay a higher premium that escalates, rising 1 percent for each month of delayed sign-up.

The deadline has caused complaints. Many in Congress have urged an extension, but the Bush administration hasn't budged. Only Hurricane Katrina evacuees and low-income Medicare beneficiaries will be allowed to sign up after May 15 without a penalty. Experts predict a late rush of enrollment calls as the deadline nears.

And while some problems with the drug benefit have abated, others have persisted — and new ones have surfaced.

The drug program represents the biggest change in the 40-year history of Medicare, the government health insurance program for those 65 and older and the disabled. Until now, Medicare offered no coverage for outpatient prescription drugs. The new benefit has a projected cost to taxpayers of $724 billion over 10 years.

Four months into the new benefit, three-fourths of Georgia's 1 million Medicare beneficiaries have prescription coverage of some type. Most of those 750,000, though, kept their drug plans from a former employer, choosing not to enroll in the new Medicare benefit, or were automatically enrolled because they also have Medicaid, the insurance program for the poor. That leaves hundreds of thousands yet to get coverage.

AARP has released a survey showing 78 percent of enrollees say they're satisfied. And a recent Washington Post-ABC News poll found 63 percent of those enrolled said they were saving money.

In January, though, the message of savings was drowned out by multiple problems. In addition to confusion over plans and medications covered, there were frequent crashes of Medicare's Web site, the toll-free number was often jammed, and drug plans were overwhelmed by call volume.

Many people covered by both Medicare and Medicaid had trouble getting their medicines, with some leaving drugstores empty-handed. Pharmacists ended up ''loaning'' medicine to low-income people while their insurance coverage was straightened out.

For those "dual eligibles," who formerly received drugs through Medicaid, "it didn't make a whole lot of sense to move all these people from a well-functioning program into something else," said Ken Thorpe, an Emory University health policy expert.

The federal agency running Medicare acknowledges consumer frustration, but points to recent improvement.

GeorgiaCares, the insurance counseling service, agrees that the drug program currently runs much better.

"We still have some hiccups," said Lisa Federico, a GeorgiaCares coordinator. "But we're not getting nearly the number of problem calls we once did."

Some problems continue. Certain drug plans remain hard to reach by phone, according to Federico and the Georgia Pharmacy Association. Customer service centers aren't staffed as well as they should be, said Buddy Harden, executive vice president of the pharmacy group, who added that drug plans generally don't pay pharmacists promptly.

Confusion still overwhelms some seniors. In Georgia, there are 82 plans to choose from. A computer is almost essential to find the right plan, yet many seniors don't have one.

The decision to run the new benefit through the private-market drug plans instead of directly through Medicare, "made it immensely more complicated," Thorpe said.

Payment glitches have surfaced in the past week, with consumers getting notices saying they hadn't paid premiums, even though many insist they have done so or set up automatic payments.

"We were overwhelmed by calls last week from people with the AARP/UnitedHealthcare plan, who didn't get their premiums deducted from their Social Security checks," Federico said.

Meanwhile, most of the 8 million low-income people eligible for a drug plan with very low out-of-pocket costs haven't signed up for one, says the Medicare Rights Center, a New York-based consumer advocacy organization.

And financial danger lurks for many people already enrolled: They haven't experienced the infamous coverage gap in the middle of most plans that begins when total prescription spending — an individual's payments plus the drug plan's costs for that person — reaches $2,250. In this so-called doughnut hole, consumers still pay the monthly premium but also must buy their prescriptions at full price until total spending reaches $5,100.

Some with high drug costs have already fallen into the doughnut hole, said Robert Hayes, president of the Medicare Rights Center. Consumers who reach this gap, he said, "will be surprised and pretty unhappy."

Banko decided she wanted a plan that would have coverage in the doughnut hole, along with no deductible. She pays $73 a month — more than twice the average premium — to get those extras.

To understand the doughnut hole and other benefit features, late enrollees likely will need help in signing up.

They'll find big differences among the plans. A study released by the Kaiser Family Foundation this month said Medicare plans vary widely on which drugs are covered, in restrictions on certain medications and in consumers' out-of-pocket costs.

For example, a senior could pay anywhere from $15 to $62 for Norvasc, an often-prescribed blood-pressure medication, even if it's on the plan's list of covered drugs.

Yet the initial savings can be great for people like Banko, whose previous Medicare supplement insurance policies are limited in their drug benefits. And they're a huge boost to those who had no drug coverage at all.

John Bradley, who gets Medicare because he's disabled, said that without prescription benefits, his drug costs last year surpassed $300 a month.

Even at that cost, "there was one drug I needed to take but I couldn't afford it.''

Now his total payment is $15 because Bradley qualified for a low-income subsidy, which means he pays no premium and has low co-pays. "It's great," he said. "And now I'm getting the drug I couldn't afford."

Andy Miller writes for the Atlanta Journal-Constitution.