Has the Medicare Drug Plan Turned a Corner?

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It's the home stretch for enrolling seniors in Medicare's new drug benefit, which President Bush hopes will eventually give him a lift in his sagging poll numbers. So it's no surprise that the President and other top Administration officials have hit the road this week, pitching hard to convince more of the elderly to sign up before the Monday deadline and insisting that they are past the program's initially ragged start.

On Tuesday, Bush toured America's retirement haven, Florida, pleading with seniors not to miss out on what he calls "a fantastic opportunity." "We want people to understand that they are going to save a lot of money when it comes to prescription drugs," Bush told dozens of elderly who had gathered at Ft. Lauderdale's Broward Community College for enrollment help from government officials, as loudspeakers played Frank Sinatra's "Young At Heart."

The community college event is one of a thousand the federal government is hosting around the country in a final drive to sign people up for the benefit. Health and Human Services Secretary Michael Leavitt plans to visit 24 cities this week to plug the program. His department also has added 6,000 phone operators to field last-minute questions from seniors and quadrupled its computer capacity to handle a late surge of applications. Leavitt estimates that of the 43 million eligible for the drug benefit, 38 million are now covered by Medicare or other government programs. He told the Associated Press on Sunday that 90% could be covered before the May 15 deadline, "which would be a remarkable outcome for the first year of the program." After May 15, seniors who haven't signed up must pay a penalty if they enroll, and the Administration has refused demands from Democrats to extend the deadline.

The Medicare program appears to have come a long way from its inauspicious beginnings, when millions of seniors were frustrated in signing up for the complex benefit or couldn't get their drugs after they enrolled because of computer glitches. Recent polls have shown enrollees pleased with the money they've saved so far on prescriptions, while Medicare officials report that competition among the insurance companies administering the plans has driven down monthly premiums from the $37 originally projected to $25.

The good news is a relief for Republicans like Minnesota Sen. Norm Coleman, who in January was besieged by elderly voters in his state angry over snafus in the program. Today he's hearing from seniors "who are raving about the money they're now saving on their monthly prescription drug plans," Coleman says. "The program is working."

But it may not be working for the ones who need it most. While middle- and upper-income seniors have been enrolling at a high rate, the consumer watchdog group Families USA released a report Tuesday noting that only about one-fourth of low-income seniors have signed up for the benefit. Of the 7.2 million seniors with incomes less than $14,700, just 1.7 million had enrolled in the program as of April 28, according to the organization's survey of state statistics. "The President and congressional leaders said their top priority was to sign up low-income seniors, so this is terribly disappointing," says Ron Pollack, executive director of Families USA. "These are the people who need the help the most." Medicare spokesman Peter Ashkenaz acknowledges that the low-income elderly have been "a difficult group to reach," but he points out that they are exempt from the May 15 deadline and officials will continue to try to sign up more of them throughout the year.

Seniors still find it difficult to choose among the program's many plans and the complicated coverage rules. The Government Accountability Office reported last week that its investigators posing as seniors found Medicare operators routinely providing inaccurate or incomplete benefit information. (The Administration points out that the GAO study was done between Jan. 17 and Feb. 7 and insists those problems have since been corrected.)

In the coming months, seniors' reviews of the program may also turn sour as they approach the "doughnut hole," the term given for the gap in coverage after a beneficiary receives the first $2,250 in Medicare payments. The senior then must pay the next $2,850 in costs until the bill reaches $5,100 and Medicare resumes paying. For many seniors who signed up early, the doughnut hole will soon arrive. "Once they hit it, they're going to be enormously surprised and upset," says Pollack. "When they're in the doughnut hole and they pay 100% of their drug costs, they still have to pay the monthly premium. So this is like going to a gas station and all of a sudden there's no gas going into your car, but the dollar signs keep on going up." If frustration with the Medicare drug program reaches anywhere near the anger at the pumps, the Bush administration's celebration could turn out to be premature.