Center for Medicare Advocacy and Other Advocacy Groups Direct Letter to McClellan of CMS

Here’s the text of a letter that a the Center for Medicare Advocacy,  Consumers Union, and the National Senior Citizens Law Center have sent to CMS director Mark McClellan regarding Part D as it relates to retiree benefits and the possible loss of dependent/spousal health insurance for PArt D enrollees:

Dear Dr. McClellan:

The Center for Medicare Advocacy, Consumers Union, the National Senior
Citizens Law Center and other organizations working on Part D
issues are increasingly alarmed at the continuing confusion about and dire
consequences to Medicare beneficiaries and their spouses of the potential
loss of all retiree health benefits when a beneficiary enrolls in a Part D
plan.  This situation has a particularly severe impact on dual eligibles
who are auto enrolled into Part D plans and whose spouses count on their
retiree benefits for all health care coverage.

While individuals with retiree coverage that is creditable under Part D are
supposed to be flagged and notified of the possible consequences of signing
up for Part D, this notification did not occur for dual eligibles, and
employers have no obligation to inform their retirees and current employees
about the loss of all health benefits, where that would occur.

The following example, received by our office recently, explains one version of the
situation:

Our 80+ year old client is in a nursing home on  Medicaid.  His 61 year old
wife is in the community, working parttime, and is on health insurance
through his retiree benefits.  She is not on Medicare.  He received a notice
that the retiree plan he has better prescription benefits than Part D.
Also included in the letter is the fact that if he participates in part D
he will lose his retiree benefits.  The dilemma is that he will be enrolled
automatically into a Part D plan because he is in a nursing home, and it appears
that his wife will lose her benefits.  What recourse is there?

There are many permutations of the above example, some including issues related
to Medicaid coverage, to Part B coverage and to the availability of the low income subsidy.

The recourse, as we understand it, is for our writer’s client to opt out of Part D – to
disenroll from the plan into which he has been auto enrolled.  But we are
hearing that the avenues available for disenrolling are not always user
friendly; moreover, it is not clear that all beneficiaries will even
understand the full consequences of staying in or disenrolling from Part D.
And, while a dual eligible may choose in or out of Part D at any time, the
loss of retiree coverage on January 1, 2006 may be irretrievable.  Another complication,
of course, is that, in the example above, the client’s LIS will not be available
to him without Part D.

A complication that arose in NY (it is far from clear whether it
has been corrected yet) and may apply elsewhere derives from the state
requiring Part D as a condition of Medicaid coverage but the employer
prohibiting Part D if the employee and spouse wish to retain retiree
benefits.

Many of these situations are correctable by the intervention of advocates
and we have, indeed, been successful in rectifying the situations when we
contact employers individually.  But we are concerned about those who have
no one to advocate on their behalf or who do not get good information about
how their employer is addressing this particularly harmful circumstance.

Only 21 days remain until the end of the year. We urge you to create
immediately an interim process, until a more complete solution can be
devised, that would allow a grace period for the correction of mistakes made
with respect to these exceedingly complex coverage decisions. For those
employers that receive the employer subsidy, you might make receipt of the
subsidy conditioned on having such a grace period. For other employers, you
might raise the visibility and seriousness of the issue and urge them to
create such a period. There may be additional creative ways to address this
very serious issue.

We look forward to hearing from you.

Ed:  Tell your congressmen what you think.