June 16, 2005 -- President Bush on Thursday began a push to promote prescription drug benefits available to seniors through Medicare next year, saying the benefits will bring needed help to millions of seniors.
Under a 2004 law, Medicare is due to start paying part of seniors' prescription drug costs on Jan. 1, 2005. Seniors living on low incomes are entitled to have nearly all of their costs paid by the government, though several groups representing them have warned that millions of them will fail to sign up for the subsidies without a broad outreach effort.
Bush pledged such an effort Thursday, announcing a national campaign beginning with attempts to reach poorer seniors to inform them of their benefits.
"The federal government will work hard to make sure that every beneficiary understands their options," the president said during a speech at the Department of Health and Human Services headquarters in Washington.
"We're on a massive education effort starting today, and I'm asking for America's help," he said.
Administration officials said Wednesday they had begun sending four-page subsidy applications to approximately 20 million Medicare beneficiaries who may qualify for low-income benefits. Approximately 14 million of those beneficiaries are expected to actually be eligible.
Who Qualifies for Drug Benefit?
Medicare's prescription benefit -- known as Part D -- is set to pay 75% of most beneficiaries' drug costs up to $2,250 per year after beneficiaries cover a $250 deductible and about $37 per month in premiums. Seniors are then responsible for all of their drug costs up to $3,600 in out-of-pocket spending, after which the program pays 95% of their costs.
Beneficiaries making 150% of the federal poverty level or less are entitled to breaks on deductibles and premiums as well as better benefits that in some cases cover nearly all of their costs.
But reaching those seniors -- who are often some of the sickest and most debilitated of Medicare's patients -- could prove difficult.
Nearly 7 million seniors who already receive public assistance through Medicaid or a variety of low-income Medicare programs will be automatically enrolled for benefits, said Medicare chief Mark McClellan, MD.
Seven million more will be required to navigate a two-step process, applying for low-income benefits right away and then choosing a drug plan when enrollment season begins Nov. 15, 2005.
Bush urged all seniors who receive a low-income application to submit it to the government.
Critics of 'Means Test'
About 28 million more beneficiaries won't be eligible for low-income benefits and will be asked to choose from several different insurance-company-administered drug plans by May 15, 2006. Seniors who sign up late will be forced to pay a penalty in the form of 1% of premiums for every month they are late, according to Medicare.
The government is also relying on a network of doctors' groups, consumer organizations, and faith-based groups to campaign among seniors for the benefit.
Robert M. Hayes, president of the Medicare Rights Center, warns that enrolling all of the 14 million low-income beneficiaries will be "a massive job."
Hayes points to food stamps, Medicaid, and other low-income benefit plans, which historically have reached only 35% to 50% of the eligible beneficiaries. He is critical of a test that requires low-income seniors to show that they have assets of less than $11,500 for individuals and $23,000 for couples in order to qualify for extra subsidies.
Such a 'means test' "historically is a very large barrier to people signing up. These are not the ways to up enrollment in a program," he tells WebMD.
All 42 million Medicare beneficiaries are due to receive "Medicare and You" pamphlets by mail in October in anticipation of Part D enrollment season staring a month later. Bush officials say they plan on spending $300 million in fiscal 2005 on outreach efforts to seniors between now and the end of September.