Despite Rough Start, Millions Are Saving Money On Medicare Program

WASHINGTON, D.C. (AP) — At first, Ruth Goundry wasn’t sure about participating in the new Medicare drug benefit. It was too confusing, she said. But in the end, she gave it a try and now she’s glad she did.

As the program’s first year draws to a close, Ms Goundry estimates that she saved about $150 a month on her five medicines, compared with what she was spending before Medicare Part D began.

“I would say I’m very impressed with the whole thing. I have no complaints,” said Ms Goundry, a resident of Chesapeake Beach, Md. “It’s meant a tremendous savings. I know other people who are saved by it. I mean that. They don’t hardly pay anything.”

Ms Goundry is like millions of seniors who say they are happy with the benefit, which cost the federal government about $30 billion in 2006.

But the program affects seniors and the disabled differently, depending upon their income and health. There are many people who believe the program could be improved.

Just down the street, at Chesapeake Care Pharmacy, Wesley Copeland is not so impressed.

In August, he began picking up all the cost of his medicine — about $300 a month. Plus, he had to continue paying his monthly premium of $38. That gap in coverage is called the doughnut hole.

“We’ve got a lot of people in my neighborhood who are seniors like me on retirement. We have to stretch pennies, so when it gets to that doughnut hole, we have to scramble like hell to keep going,” Copeland said.

Ms Goundry and Mr Copeland represent the millions of stories surrounding the addition of a drug benefit to Medicare this past year. The drug coverage has often been described as the biggest change in Medicare in the program’ 40 years.

Under the program, seniors and the disabled enroll in a private plan. They pay a monthly premium to the plan. The government also pays the plan.

The Bush administration estimates that the coverage saves the average beneficiary about $1,200. But many in Washington, particularly Democratic lawmakers, say the savings could be greater if the government were allowed to negotiate with drug manufacturers concerning the cost of medicine rather than leaving that chore to the plans.

Overall, about 22.5 million people enrolled in private plans during the program’s first year. Nearly seven million more people get their medicine through their employer, and those employers get a tax credit for providing that coverage.

That total of nearly 30 million getting coverage through Part D is much less than was originally projected. However, analysts also did not realize that so many seniors had insurance coverage for their medicine through other programs.

The Bush administration acknowledges the program got off to a rough start when hundreds of thousands of people showed up in pharmacy computers as not being enrolled in a plan.

Beverly Dillon, a pharmacy technician in Chesapeake Beach, said that in the program’s early weeks, her store advanced about 75 to 100 patients medicine to help them get by.

“We would not let patients go without their medication,” she said.

The state of Maryland also stepped in to pick up the cost of medicine for poor beneficiaries, she noted. Most other states did as well.

“January and February were absolutely crazy,” she said. “I would say that around March, or late February, things started to calm down.”

Ms Dillon said most customers who did not have insurance coverage prior to the past year are saving money. She has noticed that the checks they write to the pharmacy now are much smaller.

“There’s definitely a significant savings,” she said. “[But] the program just got off to such a bad start in the beginning, it just has not been smooth.”

Ms Dillon is bracing for some rough spots in the coming weeks too, as some seniors are switching plans. Others have been automatically enrolled in new plans.

Herb Kuhn, deputy administrator at the Centers for Medicare and Medicaid Services, said that he believes the federal government learned many lessons from the past year that will make this year’s startup run more smoothly.

“We have a much more sophisticated and built up infrastructure from a year ago,” Mr Kuhn said.

Mr Kuhn’s biggest concern going into the new year, he said, are those beneficiaries who waited until the final days of the open-enrollment period to change drug plans. He said seniors should bring to the pharmacy any kind of identification or acknowledgment letter from their plan that would show proof of membership.

Overall, Mr Kuhn said that 2006 was a good year for beneficiaries.

“We believe it’s been a very positive year for Part D,” he said. “As a result of the new program, beneficiaries are living better. They’re saving money.”