Wednesday, November 16, 2005
If many seniors are scratching their heads about the new Medicare prescription drug plan, so are the experts.
"A prescription for confusion" is how Richard L. Kaplan, a professor of law at the University of Illinois, characterizes the new drug benefit, whose enrollment period begins today for Americans aged 65 years and older.
Kaplan describes the plan as "fashioned like no other pharmaceutical coverage in the world."
For starters, the program, known as Medicare Part D, will be administered by private insurance companies rather than the Social Security Administration, which handles hospitalization and doctor's bills under current Medicare coverage, known as Parts A and B.
This shift means that seniors must choose between drug plans with widely differing premiums, deductibles, co-payments and covered drugs. In Kansas, for example, Medicare beneficiaries have to shop for insurance among 40 plans from insurers such as Aetna, Humana and UnitedHealth Group, which charge premiums from $9.48 a month to $67.88 a month.
The plan's configuration reflects President George W. Bush's philosophy that competition from private insurers is more efficient than a government program. It also reflects the belief that "what older Americans want is a choice of plans rather than a single plan offering a choice of providers," Kaplan said in an interview. "But the array of options is so complex that many elders will be overwhelmed, as will attorneys and others who counsel older clients."
"Some seniors will need to take a laptop computer into their medicine cabinet to accurately compare alternatives," he added. Kaplan is a vice chair of the Elder Law Committee of the American Bar Association's Senior Lawyers Division and has written frequently about Medicare in scholarly publications.
Another unusual aspect of the new plan is that, while coverage is voluntary, seniors who delay enrollment will be subject to a penalty of 1 percent per month after the close of the enrollment period on May 15, 2006.
In Kaplan's words, "A late enrollee will be accepted regardless of his or her medical condition -- unlike the medical underwriting that private insurance plans employ. But the premium that will be charged will be increased as long as the enrollee remains in Medicare Part D. Thus, a decision to defer enrollment in Part D has financial consequences if an eligible person eventually chooses to enroll in the program."