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Medicare: Millions to get drug subsidy

Published December 23, 2005

More than 21-million people on Medicare will have subsidized prescription drug coverage as of Jan. 1, the government announced Wednesday, though only about 1.5-million people will get their drugs through private Part D drug plans.

The numbers - the first concrete progress report on Medicare's new drug coverage - represent a "very strong start," said Health and Human Services Secretary Michael Leavitt.

When 2006 enrollment ends on May 15, Leavitt said, Medicare expects to hit its target of 28-million to 30-million Medicare beneficiaries with some kind of subsidized drug coverage - though that presumes that millions more people warm to the private drugs plans that have come under fire because of their complexity.

One part of Medicare drug coverage - subsidies to employer and union health plans - apparently has been a big hit. When Medicare drug coverage was debated in Congress, many people speculated that employers and unions that now offer drug coverage to retirees would drop that coverage and let retirees rely on Medicare.

To prevent that, Congress voted to subsidize plans that keep their retirees on the books, and apparently that strategy is working. More than 90 percent of retirees currently on company and union plans will stay there, Leavitt said, and some companies still are deciding what to do.

Enrollment in Medicare HMOs and PPOs is holding steady or growing slightly, with about 5-million of Medicare's 43-million beneficiaries.

Less certain is the response to private Part D plans that are designed to supplement Medicare's traditional Parts A and B. Critics have complained that the plans are confusing. In Florida there are 43 plans, all with various premiums, copayments and deductibles.

Before enrollment started Nov. 15, Medicare officials said they expected that 8-million to 10-million people would sign up by May 15, when Part D enrollment ends for 2006.

In the first 28 days of enrollment, about 1-million people signed up for private Part D plans and "tens of thousands" of applications are coming in every day, said Medicare chief Mark McLellan. Medicare expects 1.5-million applications by Jan. 1, when people can start using the plans.

Though that 1.5-million is far short of Medicare's 8-million target, McLellan said, Medicare expects a spike in applications when May 15 approaches because people typically wait until the last minute to sign up for voluntary insurance benefits.

Leavitt noted that an insurance industry study released Wednesday found that most people who have already signed up with a private plan say they will save money and would urge others to join a plan as well.

Medicare's Web site, where people can enter their medications and find out which plans cost the least, has had 31-million hits in the past two months, he said.

"We know seniors have a lot of questions," Leavitt said. "If I have one message for people on Medicare, it is that you should use one of many sources of information that are there for your help. Take your time. It is worth it."

McLellan and Leavitt also passed along an important consumer tidbit: When people sign up with a drug plan, applications take weeks to process, so plan identification cards will not show up in the mail right away.

However, people who join plans should receive a letter from the drug plan within one week acknowledging that they have applied.

As of Jan. 1, pharmacists should honor that letter and give discounts according to the plan, McLellan said. People need not wait for their identification card before filling prescriptions.

Stephen Nohlgren can be reached at 727 893-8442 or

[Last modified December 23, 2005, 01:14:13]

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