Feature - Medicare June 2005
Sharp Criticism Prompts Changes to the 2006 Medicare Handbook
The Bush administration is revising the draft 2006 Medicare handbook after a range of critics, from insurance companies to members of Congress, revealed serious flaws in the document, according to the New York Times. Among common criticisms are the fact that the handbook contains unclear, inaccurate and misleading statements, and that, as Medicare's primary tool for educating beneficiaries, it inadequately describes the new prescription-drug benefit.
As one example, the handbook neglects to mention a significant gap in coverage, often referred to as the "doughnut hole" The handbook states: "After you meet the deductible, you pay part of the cost of covered prescription drugs, and the plan pays part." In actual fact, the beneficiary pays the $250 deductible, and Medicare covers 75% of the next $2,000 worth of drug costs - however, the beneficiary usually foots the bill for the next $2,850 in drug costs, and Medicare pays nothing. After this, Medicare covers about 95% of drug costs.
The handbook also does not clearly distinguish between small, private fee-for-service health plans (which have enrolled less than 100,000 members) and the traditional government-run Medicare plan (which covers over 36 million people).
In describing both options as "fee-for-service plans, available nationwide," the handbook ignores a critical difference between the two: while the government offers Medicare throughout the country, with uniform premiums and legally defined co-payments, private fee-for-service plans are available only through private insurance companies, contracted to Medicare, who set their own premiums and co-payments. Thus, beneficiaries may pay more for membership in some private plans than they would through traditional Medicare.
Other reports say that the handbook fails to note the fact that most prescription-drug plans limit coverage to a preferred list of drugs, often referred to as a "formulary," and the document also contains confusing terminology and gives misleading information about the frequency with which beneficiaries may switch insurers.
Criticism of the current draft-handbook is rife among professionals. A lawyer at the non-profit Center for Medicare Advocacy, which counsels beneficiaries, stated that drawing attention to similarities between private fee-for-service plans and traditional Medicare was "inaccurate and misleading."
Even Blue Cross and Blue Shield have denounced the mention of private fee-for-service in the Medicare handbook as misleading, stating that "[T]here is no need to have pages and pages on the private fee-for-service option. Most people will think you are talking about traditional Medicare when you use that term."
The AARP, the lobby for older Americans, has also voiced concern, particularly with regard to how the handbook explains the new prescription-drug benefit. They have good reason: An April 2005 poll by the Kaiser Family Foundation revealed two-thirds of respondents aged 65 years and older did not understand the new benefit. John C. Rother, AARP Policy Director, reports that his group has met with Medicare officials on several occasions to express concerns about the handbook's "accuracy, understandability and balance."
Change is happening, but according to Gary R. Karr, spokesman for the Centers for Medicare and Medicaid Services, the task is more difficult than may be apparent: "It's a real challenge to describe things accurately and completely while not giving so much detail that you overload and confuse the beneficiaries. It's a balancing act. The handbook is taken very seriously by beneficiaries. We've got to make sure we get it right."
So, what's actually going to change? The answers remain somewhat vague, but according to Karr, planned amendments reportedly include clarifying differences between private plans and traditional Medicare, providing "a more detailed description" of the new prescription-drug benefit (including the gap in coverage), and generally using simpler and clearer language throughout the publication.
Karr says that beneficiaries will receive the final version of the Medicare handbook by mail this fall.
The New Prescription-Drug Benefit - Do You Qualify?
To qualify for Medicare prescription-drug coverage, your total resources, excluding your home, must be les than $23,000 for a married couple, and less than $11,500 for an individual.
To find out if Medicare prescription-drug coverage is appropriate for you, call the Social Security Administration toll-free on 1-(800)-772-1213, or visit their website at http://www.socialsecurity.gov.
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