Medicare Part D Hits Enrollment Targets But Receives Mixed Reviews

Despite initial confusion among seniors about how to select a plan and qualify for coverage under the new Medicare Part D prescription drug benefit, the program had met its goals for enrollment by the May 15 deadline, and most participants are generally satisfied with their plans, according to two recently published studies. But surveys also indicate that problems relating to cost and access persist, with some eligible seniors who regularly purchase prescription drugs failing to enroll in time to avoid penalties.

Medicare has met its target of enrolling 90% of eligible seniors in the Part D program since it first became available in January, according to a study published in August on the Health Affairs website. The study, by economists Florian Heiss and Joachim Winter of the University of Munich and Daniel McFadden of the University of California, Berkeley, revealed that enrollment rates were lowest among healthy seniors who take no prescription drugs and among less healthy people who use prescription drugs but had no prior drug coverage.

In total, researchers estimated, around two million eligible people who currently use one or more prescription drugs had not enrolled by the May deadline. The findings were based on surveys of 1,571 people age 65 or older who were interviewed before the enrollment period began in November 2005 and immediately after the enrollment deadline had passed. The authors noted that their results are roughly in line with figures released in June by the Centers for Medicare and Medicaid Services (CMS) indicating that, of the 34.84 million seniors eligible for Medicare Part D coverage, 24.67 million had enrolled in the program, 8.5 million had other comparable coverage, and 2.66 million had no prescription drug coverage.

Nearly one-quarter of the eligible population could be considered healthy enough to justify delaying enrollment in Part D in order avoid paying monthly premiums, according to the study. The fact that an estimated 75% to 80% of this group signed up anyway is a positive outcome for the CMS and insurance providers, researchers said, as high enrollment rates among this group reduces problems associated with adverse selection. Results showed, however, that a disproportionate percentage of healthy people with lower incomes or lower levels of education failed to enroll, despite the fact that people in these groups would likely benefit from insurance against future drug costs.

Of greater concern, the authors said, are vulnerable segments of the elderly population who may lack the awareness and acuity to make enrollment decisions. While the study found that CMS was largely successful in its outreach efforts to these groups, results also showed that difficulties arose in reaching certain populations, especially widows, unmarried women, and the less educated. While seniors with prior prescription drug coverage were enrolled in Medicare Part D by their insurance providers when it became available, those who lacked prior coverage did not receive comparable assistance.

When asked to assess their experiences with Medicare Part D, 57.9% of respondents agreed the Medicare Part D program is a major benefit to seniors, and 57.2% said they found that, once the enrollment process was complete, the program works well. In addition, 59.9% of respondents agreed that Medicare Part D plans offer significant protection against catastrophic prescription drug costs, and 76.6% said they believe having insurance companies compete for their business improves their options.

On the other hand, just 30.3% of those surveyed agreed the Medicare Part D program is well designed, and 56.9% said having coverage through private companies, rather than through a single government-managed program, complicates their choices. Fewer than half of respondents reported finding it easy to get questions answered (49.6%) or considered the enrollment process to be clear and straightforward (42.8%). Most respondents (83.4%) agreed that the exclusion of drugs from the formularies covered by Medicare Part D is a major drawback of the program, and 76.9% felt that the $250 deductible in the Medicare standard plan is a significant problem. Nearly all respondents (90.2%) agreed that the changing drug formularies included under Medicare Part D plans make it difficult for them to predict if a medication they might need in the future will be covered. In addition, most of the seniors surveyed (88.4%) said they view the so-called "donut hole"—the coverage gap in the standard Medicare plan of annual drug expenditures between $2,250 and $5,100—as a significant drawback of the program.

As part of a similar study on early experiences with Medicare Part D, the Kaiser Family Foundation conducted a survey of 1,585 seniors, including 623 who are enrolled in the program. Results showed that 34% of enrollees experienced major or minor problems with their plans, including having to pay unexpected costs, having to leave the pharmacy without a filled prescription, not receiving enrollment cards, or having to switch drugs because one was not covered under their new plan. Researchers noted that respondents in fair or poor health are significantly more likely to report problems with their plans than those in good health. Lower-income seniors and those who take six or more prescriptions a day were also found to be more likely to experience difficulties.

"Most seniors say they are satisfied with their drug plans, but it bears close monitoring that the sickest seniors are most likely to report problems," said Foundation President and CEO Drew E. Altman, Ph.D.

When asked if they have saved money on prescription drugs since enrolling in their Medicare Part D plan, 46% of the plan participants surveyed reported spending less than before, 34% said they are paying the same amount, and 17% said they are paying more.

The seniors surveyed who had enrolled in a Medicare Part D plan appeared to have a more positive view of the benefit than seniors who had not enrolled. Results showed that 40% of respondents enrolled in a plan have a favorable impression of the benefit, compared with 26% of respondents who did not participate.

The findings revealed that many lower income seniors who would benefit from additional help with prescription costs are not aware that assistance is available for those with incomes below $20,000. Among all the seniors surveyed, 35% said they know there is a program through Social Security that provides extra help to this group. But among respondents who would likely qualify for assistance, just 32% indicated they are aware of the program.