CONFUSED BY COVERAGE CHOICES DOING THE HOMEWORK: Medicare drug plan signups beg

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CONFUSED BY COVERAGE CHOICES DOING THE HOMEWORK: Medicare drug plan signups begin Tuesday, but it'shard to pick one - Colliver, Chronicle Staff WriterSunday, November 13, 2005 Tuesday marks an important milestone for Medicare's new prescriptiondrug plan. That's the day when more than 40 million Medicare beneficiaries canbegin enrolling for the program, officially called Part D. But, if the weeks leading up to the signup are any indication, pickingthe right plan won't be easy. Seniors and disabled people eligible for Medicare have already beeninundated with literature about their options. In California, dozens ofdrug plans will be available to the state's 4.3 million Medicarebeneficiaries. The rollout of the federal government's online service to help select aplan has not been swift or smooth. The frequently-asked-questionsfeature on Medicare's Internet site includes more than 230 entries. "It's very difficult to figure out what the plans are providing becausewe don't even have accurate information. The (government's) Web site isreally hard to use -- and that's even for those of us who are good onthe Internet," said Jeanne Finberg, directing attorney for the NationalSenior Citizens Law Center in Oakland. The drug benefit represents the biggest expansion of Medicare, thefederal health insurance program for seniors and disabled people, sincethe program was enacted in 1965. Beginning Jan. 1, government-subsidizedcoverage for prescription medication will be available to everybody onMedicare who chooses to enroll. About two-thirds of Medicare beneficiaries already have some form ofdrug coverage, often through a former employer or a supplementalinsurance policy. Those people will have to decide whether to stick withtheir coverage or pick one of the new plans set up to take advantage ofMedicare's drug benefit. Medicare spokesman Ashkenaz emphasized that Tuesday is just thebeginning of a six-month enrollment period, not a deadline. "Take your time," he said. "Look at the information that you receive inthe mail. Check out the ads. Look at the information you're receivingand start gathering it to make an informed decision." If beneficiaries want their new drug coverage to begin by the first ofthe year, they must sign up before the end of 2005. Enrollmentofficially ends on May 15, after which premiums go up about 1 percentper month. Only low-income or disabled people on both Medicare and Medicaid, calledMedi-Cal in California, will be automatically enrolled in a plan. Andsome of those individuals might want to switch plans if the one they'reput in does not meet their needs. One big change from the way Medicare operates is that private companieswill be providing the government-sponsored drug benefit. These companies have created myriad options designed to meet a varietyof needs. Some plans offer low to no premiums, while others arehigher-premium plans with lower co-payments. The federal government has established the minimum level of coverage aplan has to provide. More-comprehensive plans are available, but at ahigher cost. Under the standard or basic program, beneficiaries would have to pay a$250 deductible. After the deductible is exhausted, the beneficiariespick up 25 percent of drug costs for up to $2,250 in expenses, a maximumof $500. At that point, there's a gap known as the doughnut hole. For medicationexpenses between $2,251 and $5,100 the beneficiary is responsible for100 percent of the cost. After drug spending reaches $5,100, the beneficiary pays only about 5percent of the cost. For expenses in the doughnut hole, an enrollee could lay out up to$2,849. Throw in the deductible and the 25 percent co-insurance, and thereal annual cost for the first $5,100 of drug expenses could be about$3,600. Some insurers are offering more expensive plans that fill in thedoughnut hole. Other variations on the Part D theme bypass coinsuranceand charge a beneficiary different co-payments depending on whether adrug is generic, brand-name or of some other category. How does someone navigate all these options? The Centers for Medicare and Medicaid Services, the federal agency thatadministers the program, suggests people use its Web site atwww.medicare.gov, or phone its call center at (800) 633-4327. Trying the Internet approach has its own set of complexities. For the purposes of an exercise, we'll use "," a fictitious73-year-old woman with diabetes, a cardiac condition and hypertensionwho takes several prescription medications and doesn't have any drugcoverage. wants to find plans that might cover her and the number ofpharmacies in the plan's network. She starts by using a search tool onthe Web site, Compare Medicare Prescription Drug Plans. First, she clicks on "Find a Medicare Prescription Drug Plan" and entersher personal information, which includes her Medicare claim number, lastname, birth date and the month and year her Medicare coverage began.When she does that, Medicare's Internet service shows the type of drugcoverage she currently has. Because doesn't have drug coverage, she moves on to "Choose a DrugPlan Type," where she can select a stand-alone plan or a MedicareAdvantage plan. The stand-alone options are drug plans available with traditionalMedicare. Medicare Advantage plans offer both health and drug coveragein the form of a managed care plan, typically an HMO, or healthmaintenance organization. is interested in the standalone option, but discovers she has adaunting 55 choices available. But she can narrow that down by planname, annual deductible or premium price to come up with a morereasonable number of options. From there, she can click on each plan and find such details as costs,pharmacies and formularies, which is a plan's menu of drugs. She canalso enter her medications, even dosages, and compare the plans bycosts. Advocates say that many seniors don't have a computer or aren'tcomfortable working online. Medicare's Web site will be most useful forcounselors, senior service volunteers, family members and healthprofessionals who help beneficiaries make decisions. "Some of the companies are offering three or four options each. It'svery disputable to me whether the average person is going to be able tonavigate that Web site," said Sacramento resident Joan Lee, 78, who isthe state legislative liaison for Gray Panthers, a senior advocacygroup. PacifiCare Health Systems Inc., for example, is offering threestand-alone plans and a total of 51 versions of its Medicare Advantagepolicies in 23 California counties. Among the stand-alone options, PacifiCare's Saver Plan is the cheapestat $20.40 a month. It offers drugs at four cost levels from $7.50 for a30-day supply of generics to $52.35 for brand-name drugs not on thecompany's formulary. The member must pay PacifiCare's full negotiatedprice for so-called specialty drugs, such as injections not covered byMedicare. For more-extensive stand-alone coverage at a higher cost, PacifiCare isoffering Select and Comprehensive plans for $34.14 and $37.67 per month,respectively. The company's Medicare Advantage managed care plans vary in price bycounty and have different co-payments from the standalone options. Kaiser Permanente, the state's largest Medicare managed-care provider,is offering a Medicare HMO, but no stand-alone plans. Many Kaiser members eligible for Medicare receive their benefit throughan employer or union, in which case co-payments and coverage will vary.But those who subscribe as individuals and have unlimited coverage forgeneric drugs will see their premiums rise under the new program. For Kaiser Senior Advantage members in Napa and Marin counties, premiumswill go from $70 to $101. In Alameda and Contra Costa counties, theincrease is from $50 to $70. Kaiser officials said that, in addition tocovering the increased costs of health care, the new plans will provideenhanced drug coverage that costs $10 for generic drugs and $40 forbrand-name prescriptions. Within the next week, members should receive letters from Kaiser tellingthem they will be automatically enrolled in the new plan unless they asknot to be included. Health plan officials say the coming months could be difficult forMedicare beneficiaries grappling with their choices. "We think it's a good thing there are a lot of options for seniors andothers in Medicare, but certainly, they may be overwhelmed by the numberof choices out there," said Cheryl Randolph, a spokeswoman forPacifiCare. Medicare drug plan Resources Medicare: www.medicare.gov or (800) 633-4327 Health Insurance Counseling and Advocacy Program: Call (800) 434-0222for an appointment to discuss Medicare options. California Health Advocates: Sponsors Medicare seminars. Forinformation, go to www.cahealthadvocates.org. National Council on the Aging: Offers comparisons of drug plans atwww.benefitscheckuprx.org. Timeline Tuesday: First day to sign up for a drug plan. Dec. 31: Last day to sign up to begin Jan. 1. Jan. 1: First day of Part D coverage. May 15: Last day to sign up before incurring late penalties. Source: Chronicle research. Survey on the new drug benefit plan -- How well do you understand the new drug benefit? Very well - 13% Somewhat well - 24% Not too well - 31% Not well at all - 29% -- Do you plan to enroll in a Medicare drug plan in 2006? Yes, will enroll - 24% Don't know/refused to answer - 5% Have not heard enough to decide - 40% No, will not enroll - 33% Percentages do not total 100 because don't know responses are not shown.Source: Kaiser Family Foundation Health Poll Report Survey conductedAug. 4-8, 2005 E-mail Colliver at vcolliver@.... Who pays what In the new prescription drug benefit plan, the portion that Medicarepays depends on the total drug costs. Here's what the beneficiary paysand what Medicare pays in the four levels of coverage: TOTAL DRUG COSTS COST BREAKDOWN Up to $250: Deductibles Beneficiary Medicare 100% 0% $250 to $2,250: Partial 25% 75% coverage up to limit $2,250 to $5,100: No Coverage 100% 0% $5,100 and over: Catastrophic coverage 5% 95% Source: Kaiser Family Foundation Todd Trumbull / The Chronicle Page J - 1 URL: a/2005/11/13/BUGM8FMGB11.DTL ©2005 San Francisco Chronicle CONFUSED BY COVERAGE CHOICES COMPARING THE COSTS: Navigating the maze of offerings is tricky even forthe computer-savvy - Carolyn Said, Chronicle Staff WriterSunday, November 13, 2005 Aptos resident Wallock, 66, a semiretired lawyer, describes himselfas "one of those dot-the-i's kind of guys." So with enrollment for the new Medicare prescription drug plansscheduled to start Tuesday, Wallock wanted to nail down a plan forhimself. He put in several hours during a two-week period, visiting hispharmacist and calling toll-free numbers for Medicare and insuranceproviders to find the best plan for the five prescriptions he takes forasthma, eczema and prostate problems. Wallock figured out a way to keep his outlays down to $2,700 a year bybuying two of his prescriptions in Canada once he hits the Medicareplan's doughnut hole, where beneficiaries pay 100 percent of drug costs.That comes to 21 percent more than he pays now. Still, he's going to sign up for the Medicare plan because his presentinsurance stops at $2,500 worth of drugs, while Medicare plans pay 95percent of drug costs over a certain amount. Basically, he's joining theMedicare plan as a hedge in case he has catastrophic prescription needsin the future. Wallock is the exception among Medicare recipients in that hesuccessfully navigated the system to figure out which plan would workfor him. But it wasn't easy. "Even with my ability as a lawyer to do research, I found the thing tobe a total quagmire," he said. More typically, Medicare recipients are struggling with whether theyshould sign up, and which plan to pick. A study released last week by the Kaiser Family Foundation found that 61percent of seniors said they have no or minimal understanding of the newdrug benefit; 35 percent said they do understand it. Only 39 percent ofseniors said the plan would help them personally; 49 percent said itwould not. More than 4 in 10 seniors (43 percent) said they don't yet know whetherthey will enroll in a Medicare drug plan for 2006, while 37 percent donot plan to enroll and 20 percent do plan to enroll. Among the seniors who plan to enroll, out-of-pocket costs for eachprescription was the top concern for 35 percent, while 19 percent caredmost about which drugs the plan would cover and 16 percent said the costof monthly premiums was their top issue in selecting a plan. Twentypercent said all those factors are important. In Wallock's case, the fact that his total cost would be higher thanwhat he currently pays came as a surprise. "It sure slapped me in the face when I looked at this," he said. The AARP plan Wallock selected costs $23.20 a month and has nodeductible. (Most plans have a $250 deductible.) The plan would cost him$3,560 a year, he said -- $278 in premiums, $1,950 in co-pays and $1,350in the doughnut hole gap -- if he bought all the medications he nowtakes through it. Right now, his out-of-pocket drug expenses are $2,230 a year -- $730 forpremiums, a $250 deductible and $1,250 in co-pays. His current co-pay is50 percent of the drug costs after fulfilling the deductible. He buysall his drugs from Canada so that the initial price is lower. In trying to keep down his costs under the Medicare plan, he realizedthat he could buy two prescriptions from Canada once he hits thedoughnut hole. Medicare plans do not cover drugs purchased in Canada, so he will paythe full Canadian price. That still comes out to much less than what hisMedicare plan would charge while he's in the doughnut hole of nocoverage. Some Medicare recipients are making a different choice from Wallock,concluding that they don't need the new plan because they already haveadequate drug coverage through an existing policy. That was the case for Dick Steinbach, 70, of Novato. He retired fromPacific Bell in 1987 with health insurance through United Health Careand prescription coverage through Caremark. Steinbach received a letter last month from Caremark saying that itscoverage is as good as or better than Medicare plans will offer. All Medicare recipients who already have prescription coverage aresupposed to receive such a letter from their insurer, company or unionexplaining whether their coverage is at least as good as Medicare's. Ifit is, they can keep their policy and not have to pay a penalty if theylater sign up for Medicare. (People should keep a copy of that letter.)Otherwise, those who sign up for Medicare drug coverage after May 15 paya penalty of 1 percent more in premiums for every month they delay. Steinbach wanted to figure out for himself whether a Medicare drug planwould save him some money on his five medications for high bloodpressure, high cholesterol and prostate problems. He describes himselfas computer literate and reasonably Internet-savvy but he couldn't"penetrate the maze" of Medicare's Web site to figure out how its planswould compare to his coverage. He's likely to just stick with hisexisting coverage. According to the Kaiser survey, among the 80 percent of seniors who saidthey will not enroll or don't know whether they will enroll, 60 percentsaid they already have insurance that covers prescriptions. When it enacted the Medicare drug plan, Congress wanted to encourageemployers to continue prescription coverage for retirees, so it built inmoney for Medicare to pay subsidies to companies with such policies.Medicare is expected to spend $71 billion on employer subsidies duringthe next eight years. Not all Medicare recipients are seniors. In 2003, there were 35 millionMedicare enrollees over 65 and 6 million enrollees under 65 whoqualified for the coverage because they are disabled. Meghan Elizondo of San is 33 and on Medicare because she isdisabled by inflammatory arthritis. She takes at least nine medicationsthat would cost about $8,500 a month if she had to pay full price. Rightnow, she has health insurance, including some drug coverage, through herhusband's former employer. He was laid off about six months ago but pays$400 a month to continue the coverage. Elizondo spent hours typing all her medications into the Medicare Website and hasn't been able to find a plan that covers all of them. As someone who suffers from a disease that may progress or stopresponding to certain drugs, she worries about being locked in tocoverage that won't change to accommodate her health needs. Medicaredrug plan enrollees can switch plans only once a year. "I'm immuno-suppressed because they treat inflammatory arthritis byknocking down the immune system," she said. "If I get an infection, Ihave to take antibiotics, and those are very expensive. It makes itnearly impossible for me to make an educated decision. It's frustrating,very frustrating." A Medicare spokesman said that in cases like Elizondo's, patients shouldsee if there are generic equivalents to their drugs and try enteringthose into Medicare's online plan finder to get as many drugs covered aspossible. If patients develop new symptoms that require additionaldrugs, they can apply for an exception and are supposed to receive aswift decision. If their application is rejected, they can appeal, butthat is likely to be a lengthy, complex process, the spokesman said. Elizondo said her best hope is that her husband, a computer programmer,will find a job with good health insurance before May 15. "The wholeMedicare prescription plan is just so inadequate. It's worse than nothaving it," she said. "It makes some people think that now the problemis fixed and they can ignore it." E-mail Carolyn Said at csaid@.... Page J - 1 URL:http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/11/13/BUGM8FMGV31.DTL ©2005 San Francisco Chronicle