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Administration Says 30 Million Beneficiaries Receive Medicare Drug Coverage

APRIL 20, 2006 -- More than 30 million Medicare beneficiaries are receiving drug coverage, exceeding administration projections with less than a month to go before the May 15 enrollment deadline, officials said Thursday.

If current enrollment trends continue—1.7 million beneficiaries enrolled in stand-alone drug plans within the last month—"we have a shot" at enrolling 90 percent of the 43 million Medicare beneficiaries eligible for drug coverage, Department of Health and Human Services Secretary Michael O. Leavitt told reporters.

Leavitt and Centers for Medicare and Medicaid Services Administrator Mark B. McClellan said there were no plans to extend the May 15 deadline, though 47 senators have asked Senate Majority Leader Bill Frist, R-Tenn., to bring up legislation when the Senate returns next week that would do just that. Seniors who enroll beyond that point face a financial penalty.

"The deadline is a very important part of this. It helps seniors focus on this, and it's working," Leavitt said. McClellan said Medicare actuaries have projected that 2 million fewer beneficiaries would sign up for the benefit by May if the deadline were extended.

About 8 million Medicare beneficiaries have enrolled in stand-alone prescription drug plans and about 1 million have enrolled with Medicare Advantage health plans that offer prescription drug coverage.

The remaining beneficiaries in the drug plan either were Medicaid beneficiaries automatically enrolled into the Medicare drug plan as a "dual eligible," were rolled into the drug benefit as part of their Medicare Advantage plan, are in a former employer's retiree plan that receives the Medicare subsidy, or receive federal retiree coverage, according to CMS figures.

And when prescription drug coverage from other sources, such as the nearly 6 million Medicare beneficiaries who receive coverage through the Department of Veterans Affairs or beneficiaries who are still working and receive drug coverage through their employer, the total number of Medicare beneficiaries with drug coverage is about 36 million, Leavitt said.

Critics of the program said the administration's report proves it is not doing as well as hoped.

Robert M. Hayes, president of the Medicare Rights Center, said Thursday's announcement "reveals that less than 20 percent of people with Medicare have new drug coverage" and that more than 80 percent of the poorest seniors have not been enrolled. Just 1.6 million of the 8.2 million Americans eligible for the low-income subsidy have been approved, Hayes said.

"Any honest analysis will lead to reform and improvement: there should be a straightforward, comprehensive, and affordable Medicare drug benefit. We do not have that now," he said.

Rep. Pete Stark, D-Calif., said the drug enrollment numbers show that the benefit is failing. In a statement, Stark also said that the administration has lowered its enrollment estimates from December 2003 when it projected that 40.7 million Medicare beneficiaries would enroll in the benefit.

"Despite President Bush's cross-country dog and pony show, millions of seniors have yet to sign up for a prescription drug plan," said Stark, who is advocating a one-time extension of the May 15 enrollment deadline.

Leavitt said the toughest groups of beneficiaries to reach are low-income individuals who could qualify for financial subsidies under the benefit, adding that some seniors who have not enrolled mistakenly believe the drug benefit is for low-income seniors only.

Another group of beneficiaries who have not enrolled are relatively healthy, use few drugs, and think they do not need coverage. "Those are really the people you have to worry about," said Dan Mendelson, president of Avalere Health, a health care consulting firm. Some seniors in that group, he said, may not realize there is a drug benefit or may have determined that it is not worth the cost.

Leavitt encouraged seniors with few drug expenses to enroll in the lowest-cost plan, a step that would help them avoid any late enrollment penalties and have coverage if their drug costs increased later.

Leavitt, McClellan, and a variety of seniors groups, such as AARP, said they will continue to conduct enrollment events all over the country in an effort to persuade beneficiaries to sign up for the benefit before the May 15 deadline.

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