The deadline is fast approaching for seniors to register for the new Medicare Part D prescription drug coverage program. The complicated new system — there are 77 different coverage plans to choose from — has proven to be confusing and sometimes overwhelming to many senior citizens.
While opinions differ on how cost-effective the program will turn out to be for consumers — and how profitable it will be for the pharmaceutical industry — failing to sign up before the May 15 deadline will mean a lifetime of penalties, said Paul Iarrobino with the Multnomah County Office of Aging and Disability Services.
"Even if people are confused by the plans, deciding not to register is the wrong thing to do," Iarrobino said. "Anyone who doesn't register in time will pay a penalty for the rest of their lives."
Failure to register, he said, will result in a higher monthly premium and a monthly penalty that stays in effect over the length of a consumer's coverage.
Iarrobino's office — along with other community service organizations like the Urban League — is helping Multnomah County seniors sign up for Medicare Part D through a series of community meetings. By far, he said, the biggest complaint he's heard has been about the confusing array of coverage plans. The 77 different plans are administered by a range of private insurance companies, and each has a different monthly premium and, in some cases, a different formulary, or list of drugs that are covered.
"Lots of people have found it really intimidating," he said. "There are so many choices that people don't know which plan is best for them."
Iarrobino and his colleagues are trying to make the selection process easier. They come to each meeting with a computer loaded with software that narrows each person's choice of plans down to the best three.
"We input the number of prescriptions each person has, and the kind of drugs they're taking, and we come up with a short list of choices," he said. "Once we reach that point, it's a much less threatening process."
The Office of Aging and Disability Services' Web site suggests that seniors carry out a self-review of their prescription drug scenario before either registering for Medicare Part D on their own or going to one of the registration workshops:
• Look over your current health insurance coverage. Are prescription drugs covered? What are your out-of-pocket drug costs?
• Keep a list of the name, dosage, and cost of the prescriptions you use. Since different plans will cover different drugs, this will help you choose a plan that meets your prescription needs.
• If you have a limited income, you will receive an application to get extra help paying for a Medicare prescription drug plan. When you get this application, fill it out and return it. Millions of people will qualify for a Medicare prescription drug plan with few or no premiums or deductibles, and low co-payments. You might be one of them.
• If you have prescription drug coverage through a former employer or union, check with your benefits administrator. Medicare prescription drug coverage may be different for you.
So is the Medicare Part D program a better deal for seniors than the way things used to be? The answer is yes and no, said George Gerding, a consultant pharmacist for several nursing homes in the North/Northeast Portland area.
"My sense is that people in the lower-income range are doing fairly well, with the exception of those who were assigned a plan because they registered without making a choice,"Gerdingsaid. "Higher-income people are doing very well on the program, because the insurance is good, the price is low and they often have supplemental insurance to fill in the gaps."
Those who are losing out, he said, are people at the very bottom of the income scale, who until now relied on the state Medicaid program. Under Medicaid — which is being phased out as Medicare Part D is being phased in — they didn't have any co-payments with their prescription coverage; now, they do.
"Even though it's not a huge co-pay — $5 or something like that — it's enough for quite a few of these folks that they're walking away from the counter," Gerding said.
And contrary to popular belief, Gerding said, pharmacists are not reaping a windfall from the new plan. Although many seniors take hundreds of dollars' worth of prescription medicine each month, pharmacists don't earn a percentage of this.
"Everyone thinks that, because drugs are so expensive, the pharmacists must make a cut of that," he said. "But it isn't that way. They just get a tiny fee for each prescription."
And now that so many more seniors — everyone who was on the old Medicare plan — are now having their drugs paid for by insurance, pharmacists have to pay for their drug inventories in advance and then wait to be reimbursed.
State governments, too, are taking a hit from Medicare Part D, said Gerding, because they will still have to step in and pay for drugs that are not covered by Part D formularies but are nonetheless needed by impoverished seniors. The difference now is that they won't receive federal funds to cover this expense.
The big beneficiaries of the new plan, Gerding said, are pharmaceutical manufacturers. When Congress passed the Part D law last year, it specifically did not allow the federal government to use its bulk purchasing power — it's now buying drugs for millions of people — to negotiate with pharmaceutical companies for lower prices. Drug companies can still sell their drugs at the same profit margin as before, regardless of how many Medicare Part D customers there are.
And despite the profitable situation that Part D creates for insurance companies that contract with the government to provide services, Gerding predicts that many of them will drop out of the program after a year or two.
"Some of those carriers will lose money, because the federal government has so many regulations that they (the private insurance industry) don't have,.…" he said. "And many of them have never insured just old people before. They've always had a pool of younger, healthier people whose premiums help defray the costs of the older ones."
But regardless of the pitfalls the new system may face down the road, the registration deadline is nearly here. Both Gerding and Iarrobino — who look at the system from different points of view — are in agreement: Register now, make a good choice of plans and take advantage of community resources that will help you make a good choice.
Medicare Registration Workshops
Both the Urban League of Portland and the Multnomah County Office of Aging and Disability Services are hostingupcoming Medicare Part D registration workshops to help seniors navigate the confusing array of available plans. Individual counseling will be available to those eligible for Medicare who would like to understand their options regarding the new prescription benefit. Be prepared to discuss the number and kind of prescription drugs you take every month so that you can choose the best coverage plan.
"Now is the time — to not be left behind," said state Sen. Margaret Carter, D-Portland. "You need to sign up for a prescription plan before May 15 so you don't miss out on the opportunity to benefit from this new program."
Workshops are scheduled at the following places and times:
• 9 a.m. to noon Friday, April 21, at the Urban League Senior Center, 5325 N.E. Martin Luther King Jr. Blvd. (Urban League).
• Thursday, April 27, at the Midland Library, 805 S.E. 122nd Ave. Call 503-988-3646 to schedule an appointment (Multnomah County).
• Friday, April 28, at the Hollywood Library, 4040 N.E. Tillamook St. Call 503-988-3646 to schedule an appointment (Multnomah County).
In addition, enrollment events are scheduled at participation district senior centers. Call 503-988-3646 for a complete schedule.