The Confusing Cost of Medicare's Drug Plan

Signing up for Medicare's new prescription drug benefit has been challenging enough for the nation's 43 million eligible seniors. In most states they must wade through 40 different insurance plans, and the best way to compare prices and enroll is through the Internet — unfamiliar territory for many elderly. The government has also been so slow in confirming applicants' eligibility that some enrollees may not have their necessary ID cards when the program begins next month. Now, as the initial December 31 enrollment deadline fast approaches, comes another headache: Consumer groups say they're getting an increasing number of complaints from seniors that drug plan prices listed on Medicare's website differ from prices quoted by the private insurers running the plans. "There have been a lot of instances of huge discrepancies," says Hilary Dalin, counseling director for one of those consumer groups, Health Assistance Partnership.

Earlier this month Maine Republican Senator Olympia Snowe sent an angry letter to the federal Centers for Medicare and Medicaid Services complaining of "inaccurate and misleading" pricing information. When one of her constituents, Caren Reed, signed onto medicare.gov to help her 85-year-old mother-in-law find a plan covering her eight prescription drugs, the website listed Fox Insurance Co.'s as the cheapest, at $2,850 annually for her copays, premiums and coverage gaps. But when Reed phoned the Scottsdale, Arizona company, she says a representative told her the yearly cost would actually be $4,232. "How can anyone make an intelligent decision when you have misinformation?" asks Reed, a retired attorney.

Medicare officials insist the website hasn't had a large number of errors, and that the few which have cropped up are due to incorrect information that the private companies supply. But even when it is correct seniors can face frustrating discrepancies because different pharmacies can charge different prices for the same drug. The numbers Fox gave the website for Reed's drugs were based on their "commonly purchased price," says marketing director David Kline, but the company rep gave Reed a higher quote in case her pharmacist charged more. He says the call center will now give quotes that match the website's. It may sound all too confusing, and indeed during a visit to a Virginia retirement community earlier this week, George W. Bush acknowledged that signing up for the drug benefit "is a daunting task" for some. But, the president maintained, it's still "a good deal for our seniors." As long, it seems, as they make sure the deal isn't too good to be true.