2007-01-03 / Seniors

Senior Spotlight

Year II Of Part D Rx Subsidy Program Begins
By John Toscano

Two days ago, year two of the Medicare Part D drug prescription subsidy program began. We hope it will run more smoothly this year. In 2006, the year of its inception, it was marred by a shaky beginning during which some seniors experienced interruptions in their benefits at times.

Democratic lawmakers were quick to pounce on the Bush Administration when these lapses occurred and also were very critical of some aspects of the program, such as its prohibiting buying drugs from overseas at cheaper prices. Senior and consumer advocates, as well as some lawmakers, also assailed the provision in the program which bars the federal government from negotiating much lower prices with major pharmaceutical firms for the huge amount of drugs purchased for use in the program.

The newly installed Democratic majorities in the House and Senate in Washington have promised to pursue both these issues—freedom to purchase drugs at lower prices from overseas and negotiating lower prices with major drug companies— for the benefit of the many seniors who find paying their prescription bills difficult.

The pharmaceutical firms, drug store operators and the private insurers that operate the Part D program are making huge profits. The changes that we discussed above would not hurt their bottom lines at all, but would also give seniors some small relief from their drug costs.

SMALL GLITCH IN PROGRAM ALREADY: The start of the second year of the Part D program has already revealed a slight glitch in its operation.

It was reported from Washington last week that some of the insurance companies that administer the hundreds of plans failed to report the changes in costs and benefits 2006 members who were continuing in the same plan in 2007 would experience in the new year of coverage.

The insurers are charged under the Part D program with providing this information to their members in enough time so that they can use the information to make a decision whether to stay with the same company or switch to another one with lower costs.

Part of the problem may have been that seniors were told if they were satisfied with the way their plan treated them in the first year and want to continue in the same plan for the second year, they don’t have to do anything, but would automatically be carried over on the same companies’ membership rolls on January 1.

However, the insurers had the obligation under the law to formally inform those members if their premiums or co-payments would be increased and whether their drugs choices would be changed.

In fact, the story said, Medicare officials had repeatedly told the insurers they had to provide this information by last October 31!

The reasons for not informing members of changes were not clear in the story that appeared in the New York Times last Wednesday, December 27. One insurer said errors were discovered in the information that was to be mailed out, so there were delays in making corrections. A fire in a printing plant delayed the notifications further.

The Bush administration told Congress last week about the failures to send the information to plan members and the administration said it may give beneficiaries a six-week extension of the open enrollment period held from last November 15 to December 31 to get the information, consider it and then make a decision. The insurers may also face penalties for not getting the information out in a timely fashion, the Centers for Medicare and Medicaid Services said through a spokesman.

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