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 Home > News & Policies > April 2006

For Immediate Release
April 27, 2006

Medicare Check-Up: Medicare Prescription Drug Coverage Is Cutting Costs

     Fact sheet In Focus: Health Care
     Fact sheet Setting the Record Straight

Most Beneficiaries Are Enjoying Lower Costs Under Medicare Coverage

    USA Today Cites Poll Claiming Medicare Prescription Drug Coverage Has Increased "Out-Of-Pocket Costs For About One In Five Participants." (Richard Wolf, "1 In 5 Pay More In Medicare Rx Plan," USA Today , 4/27/06 )

    But According To The Same USA Today Article, "Most Of The More Than 30 Million Beneficiaries Enrolled In The Program Are Saving Money." If one-fifth of beneficiaries are paying more, 80 percent of beneficiaries are paying the same amount or less than they previously paid. (Richard Wolf, "1 In 5 Pay More In Medicare Rx Plan," USA Today , 4/27/06 )

    Another Poll, Released The Same Day As The Poll Cited In The Article, Shows That 84 Percent Of Seniors Enrolled Are Satisfied With Their Drug Coverage And 52 Percent Say They Are Enjoying Significant Cost Savings. ( U.S. Chamber Of Commerce, "Nationwide Poll Of Seniors Shows High Level Of Satisfaction With Medicare Prescription Drug Plan," Press Release, 4/25/06 )

    • Eighty-Five Percent Say Their Monthly Premium And Co-Payments Are Affordable, 85 Percent Say Their Plan Covers The Medicines They Need, And 78 Percent Say They Are Happy With The Amount Of Coverage They Have. ( U.S. Chamber Of Commerce, "Nationwide Poll Of Seniors Shows High Level Of Satisfaction With Medicare Prescription Drug Plan," Press Release, 4/25/06 )

    Lower Costs Through Medicare Coverage Are Causing Canadian Drug Sales To Fall As Medicare Enrollments Rise. "Rising enrollment in the new Medicare drug benefit may be helping thousands of older Minnesotans, but it also has cut sharply into low-cost Canadian drug sales through a state-operated website, two reports indicate. The reports are the latest indication that millions of Americans appear to be switching from Canada to Medicare for their drugs. While enrollment in the Medicare benefit rose 9 percent in the past month, the government said Thursday, Canadian drug sales through the Minnesota RxConnect program plunged 52 percent in March." (Warren Wolfe, "Canadian Drug Sales Fall As Medicare Enrollments Rise," Star Tribune [ Minneapolis , MN ], 4/21/06 )

Manufacturer Drug Assistance Programs Can Continue

USA Today Claims Beneficiaries Are Losing Access To Free Drugs Provided By Manufacturers. (Richard Wolf, "1 In 5 Pay More In Medicare Rx Plan," USA Today , 4/27/06 )

    But It Is Unacceptable For Manufacturers To Stop Their Programs When There Is A Clear Roadmap For How They Can Continue In Addition To Part D. According to guidance from the HHS Inspector General and CMS, patient assistance programs sponsored by drug manufacturers may operate outside of the Medicare Prescription Drug Benefit, without violating the anti-kickback statute or any other program requirements. This means that no pharmaceutical manufacturers need to end their assistance programs for people with Medicare drug coverage. Pharmaceutical assistance programs may continue to provide free or discounted drugs to financially needy Medicare Part D enrollees outside of the Medicare drug benefit. See for details.

    • Bipartisan Group Of Senators Calls It "Unacceptable" For Drug Companies To Use Medicare Drug Coverage As An Excuse To Limit Their Assistance Programs. "It is simply unacceptable for any pharmaceutical company to use the launch of the new Medicare prescription drug benefit as an excuse to limit their [PAPs] as of May 15, particularly since there is now clear legal guidance from the OIG on ways to operate these programs." (Sens. Chuck Grassley (R-IA), Max Baucus (D-MT), Orrin Hatch (R-UT), and Jay Rockefeller (D-WV), Letter To Pharmaceutical Research And Manufacturers Of America President Billy Tauzin, 4/21/06)

    About One-Third Of Seniors Are Eligible For Prescription Drug Coverage That Includes Little Or No Premiums, Low Deductibles, And No Gaps In Coverage. On average, Medicare will pay for more than 95 percent of the costs of prescription drugs for low-income seniors.

    • Applications For Extra Help Are Available. Last fall, millions of applications for extra help were mailed to many low-income seniors and Americans with disabilities. Applications are also available at locations around the country, including over 30,000 pharmacies, or through the Social Security Administration by visiting , or calling 1-800-772-1213 (TTY 1-800-325-0778), or going to any Social Security office. There is no cost or obligation to apply for extra help, and no financial documents or complicated records are required. Everyone who thinks they may qualify should apply.

Beneficiaries Are Receiving Access To Necessary Medications

USA Today Implies Seniors Are Losing Access To Medications They Need. "They are poor or near-poor, old, disabled or both. Some have cancer or AIDS, schizophrenia or bipolar disorder, spinal cord injuries or multiple sclerosis." (Richard Wolf and Julie Appleby, "Tough Choices Can Be Side Effects Of Medicare Plan," USA Today , 4/27/06 )

    But Seniors Are Protected Against Sudden Loss Of Drug Coverage. "The Bush administration issued a new policy on Wednesday that protects Medicare beneficiaries against the sudden loss of coverage for drugs they are taking under the prescription-drug program. ... Dr. Mark McClellan, administrator of the Centers for Medicare and Medicaid Services, summarized the policy this way: 'In general, a plan cannot change your coverage for the drugs you are using during the year. The stability of drug formularies is extremely important for many of our beneficiaries.'" (Robert Pear, "New Drug Rule Protects Medicare Beneficiaries," The New York Times , 4/27/06 )

    All Beneficiaries Maintain Access To Drugs In Six Critical Classes. The six classes are: chemotherapy, HIV/AIDS, anti-depressants, anti-psychotics, anti-convulsant agents and immunosuppressants. CMS requires plans to cover all drugs in these classes.

    For Drugs Not In These Six Classes, Beneficiaries Have Several Options:

    • Beneficiaries Can Ask Their Physicians To Prescribe Another Medication That Will Work As Well As The Medication That They Were Taking.

    • Beneficiaries Can Ask Their Plan For Help In Filing An Appeal Or Exception To The Formulary (List Of Drugs Covered By The Plan). By law, these appeals and exception requests must be handled within 72 hours, or 24 hours in the case of a life-threatening event.

    • Beneficiaries Can Call 1-800-MEDICARE For Assistance. Wait times on 1-800-MEDICARE average less than two minutes, and plans have similar call wait times.

Medicare Provides Improved Coverage For Beneficiaries Previously Covered By Medicaid

USA Today Claims "Low-Income People Transferred From State Medicaid Drug Programs" Are Facing Increased Costs. (Richard Wolf, "1 In 5 Pay More In Medicare Rx Plan," USA Today , 4/27/06 )

    But Millions Of People With Medicaid Have Better Coverage Because They Are Not Subject To State Medicaid Limits On The Number Of Prescriptions (12 States) Or Strict Preferred Drug Lists (Most States). The average Medicare Prescription Drug Plan formulary includes 1,200 drugs.

Enrolling In Prescription Drug Coverage Now Protects Beneficiaries For The Future

USA Today Claims "Those With Little Or No Current Drug Expenses" Are Facing Increased Costs. (Richard Wolf, "1 In 5 Pay More In Medicare Rx Plan," USA Today , 4/27/06 )

    But These Beneficiaries Are Buying Insurance Coverage And Protecting Themselves Against Higher Drug Expenses In The Future. That's what insurance is about: seniors pay a little more now but get peace of mind. About one in six beneficiaries do not take any drugs.

    • 102-Year-Old Texan Says She Enrolled In Coverage "For When I Get Older." "Ida Solo of Richardson takes only two prescriptions, so she wasn't sure she'd sign up for Medicare's new drug coverage. For weeks, Ms. Solo wondered whether she'd get her money's worth. Finally, she joined a Humana plan for $14.13 a month. What persuaded her to enroll was the peace of mind she'd have. If she ever fell ill, her prescription costs would be covered. 'I bought it for when I get older,' she said. Ms. Solo turned 102 last month." (Bob Moos, "Time To Sign Up," The Dallas Morning News , 4/23/06 )

The May 15 Enrollment Deadline Is Working

USA Today Claims Many Seniors Are Unaware Of The Medicare Prescription Drug Program's May 15 Deadline. (Richard Wolf, "Many Seniors Unaware Of Deadline For Medicare Drug Plan," USA Today , 4/26/06 )

    But More Than 30 Million People Have Signed Up For The Medicare Drug Benefit, Surpassing The Administration's Enrollment Goal Of 28 To 30 Million Beneficiaries. If enrollment rates continue at the current pace, the government may enroll 90 percent of the estimated 43 million eligible seniors by the May 15 deadline.

    • Thirty Million Seniors Enrolled Means More Than 65 Percent Of Eligible Beneficiaries Are Receiving Coverage.

    Many People May Be Assisted By The Medicare Prescription Drug Benefit But Do Not Realize It. As of March 23, there were 11 million seniors with retiree coverage partially subsidized by the federal government and 5.8 million seniors were auto-enrolled. This month, CMS is auto enrolling about 1 million low income seniors that have not picked a plan but qualify for extra help. There are about 6 million people who don't need to sign up because they have other coverage (i.e., they are covered by VA, Indian Health, or they are still working).

    USA Today's Own Editorial Board Supports Keeping The May 15 Deadline. "The deadline is forcing seniors – and their adult children – to act. Note that one in eight taxpayers file in the week before April 15. … Congress rejected an extension in February. With almost a month to go, it should resist the temptation to change its mind." (Editorial, "Views Of Medicare Plan Shift," USA Today , 4/17/06 )

    • USA Today Editorial: "There's Plenty Of Help Available To Make A Decision Now." "Also, there's plenty of help available to make a decision now. Social service agencies, state insurance departments and pharmacies are helping seniors navigate the system. More than 1,000 enrollment seminars are held each week." (Editorial, "Views Of Medicare Plan Shift," USA Today , 4/17/06 )

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