Prof Kaplan (Illinois): Caution: New Medicare drug plan may cause headaches
From EurekaAlert:
If many seniors are scratching their heads about the new Medicare prescription drug plan, so are the experts.
“A prescription for confusion” is how Richard L. Kaplan, a professor oflaw at the University of Illinois, characterizes the new drug benefit,whose enrollment period begins today for Americans aged 65 years andolder.
Kaplan describes the plan as “fashioned like no other pharmaceutical coverage in the world.”
For starters, the program, known as Medicare Part D, will beadministered by private insurance companies rather than the SocialSecurity Administration, which handles hospitalization and doctor’sbills under current Medicare coverage, known as Parts A and B.
This shift means that seniors must choose between drug plans withwidely differing premiums, deductibles, co-payments and covered drugs.In Kansas, for example, Medicare beneficiaries have to shop forinsurance among 40 plans from insurers such as Aetna, Humana andUnitedHealth Group, which charge premiums from $9.48 a month to $67.88a month.
The plan’s configuration reflects President George W. Bush’sphilosophy that competition from private insurers is more efficientthan a government program. It also reflects the belief that “what olderAmericans want is a choice of plans rather than a single plan offeringa choice of providers,” Kaplan said in an interview. “But the array ofoptions is so complex that many elders will be overwhelmed, as willattorneys and others who counsel older clients.”
“Some seniors will need to take a laptop computer into theirmedicine cabinet to accurately compare alternatives,” he added. Kaplanis a vice chair of the Elder Law Committee of the American BarAssociation’s Senior Lawyers Division and has written frequently aboutMedicare in scholarly publications.
Another unusual aspect of the new plan is that, while coverageis voluntary, seniors who delay enrollment will be subject to a penaltyof 1 percent per month after the close of the enrollment period on May15, 2006.
In Kaplan’s words, “A late enrollee will be accepted regardlessof his or her medical condition — unlike the medical underwriting thatprivate insurance plans employ. But the premium that will be chargedwill be increased as long as the enrollee remains in Medicare Part D.Thus, a decision to defer enrollment in Part D has financialconsequences if an eligible person eventually chooses to enroll in theprogram.”