Is the Medicare Drug Plan Finally Working?

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Has President Bush’s embattled prescription drug plan turned a corner? Top Bush aides are pointing to a jump in applicants: 2 million have signed up since mid-February, a 25% increase over the previous month, bringing the total to 27 million seniors enrolled out of 42 million eligible. Competition among private insurers administering the program also has driven down average monthly premiums to $25, instead of the $37 originally projected. The Centers for Medicare and Medicaid Services now estimates that the drug program will cost $678 billion over 10 years instead of $730 billion. “Seniors are seeing the real benefits,” says Health and Human Services Secretary Mike Leavitt.

Republicans, who pushed legislation through Congress setting up the program and who feared a backlash from angry seniors in the fall elections, are relieved. They hope the good news will silence Democratic critics, who pounced on early snafus in the plan that confused many seniors and left some temporarily without drug benefits at all. Democrats should "stop engaging in cheap political stunts designed solely to undermine the new benefit," argues House Majority Leader John Boehner.

But Leavitt and Boehner aren't winning over Democrats like Rep. Henry Waxman, a senior member of the House Government Reform Committee. Early snafus may have been fixed, he tells TIME, but the program "is still a disaster." His staff released a report last week, which revealed that for many commonly prescribed drugs the Medicare insurers claim they’ll cover, seniors are finding "hidden restrictions," such as requirements that the patient try a cheaper medication first or limits on the number of pills available each month.

Waxman's report says that the government website that explains the drug plans,, "does present limited information about whether Medicare drug plans use restrictive tactics, but the information is buried within the website and provides no details of the terms of the restrictions." Waxman's staff also phoned the 42 companies offering Medicare drug plans to residents in his California congressional district and asked for information on restrictions for five sample drugs. More than two-thirds of the drug plans surveyed couldn't accurately describe over the phone how the restrictions worked, the report noted. The plan representatives on the other end of the line either did not know anything about restrictions, gave "erroneous or conflicting information" on them, or "told callers that they could not obtain information on plan restrictions until after they signed up for the plan."

Medicare chief Mark McLellan dismisses Waxman’s report as "misleading." The commonly used restrictions bring down costs or prevent overuse of drugs, he argues, and Medicare so far has found few abuses of the practice. But watchdog groups like Families USA say there are a large number of such restrictions, which will frustrate seniors trying to get drugs under the new benefit. Administration officials "haven’t put the problems behind them," says Dee Mahan, Family USA’s deputy director for health policy, which means Republicans may still face angry elderly voters next fall.