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Medicare Plan’s No. 1 Promoter

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Times Staff Writer

President Bush began a two-day campaign Thursday to publicize Medicare’s new prescription drug benefit, which takes effect in 2006.

“This great and trusted program is about to become even better,” Bush said. “Starting this November, every American on Medicare can sign up to get help paying for their prescription drugs. This new law is bringing preventive medicine, better healthcare choices and prescription drugs to every American receiving Medicare.”

The drug coverage, which beneficiaries must choose to purchase, represents a landmark shift in the program’s emphasis from covering medical treatments almost exclusively to including preventive measures such as screenings for cancer, diabetes and heart disease and immunizations against pneumonia and the flu.

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In a speech promoting the benefit, the president contended that preventive measures would save taxpayers money by dealing with ailments when they were less severe, thus averting the need for costlier treatments.

He derided as “the medicine of the 1960s” the Medicare policy of paying $28,000 for ulcer surgery “but not $500 for prescription drugs that eliminate the cause of most ulcers.”

Similarly, Bush said, “Medicare would pay $100,000 to treat the effects of a stroke but not $1,000 for blood-thinning drugs that could prevent strokes.”

Today, Bush is scheduled to take his publicity drive to Maple Grove, Minn., a suburb of Minneapolis, where he plans to meet with workers being trained to help seniors sign up for the benefit.

Behind the nationwide outreach campaign, which will include all levels of government as well as consumer groups, is a concern among experts that low-income seniors may not hear about the drug benefit. They noted that about 25% of those eligible initially signed up for food stamps when the program started four decades ago.

Bush spoke Thursday at the Department of Health and Human Services, the agency that oversees Medicare.

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Although the drug coverage benefit appears to be popular among seniors, who in recent years have faced soaring prices for medications, its projected price tag seems certain to erode Medicare’s financial viability.

Even before Congress added the drug benefit, Medicare was confronting $27.7 trillion in unfunded liabilities over 75 years, the congressional Government Accountability Office said. The new benefit will add $8.1 trillion over the same period to the program’s unfunded promises -- making Medicare more likely to go bankrupt than Social Security, which faces a $3.7-trillion liability over the same time frame.

“Medicare is by far a more serious problem than Social Security,” said Michael Cannon, director of health policy studies at the Cato Institute, a libertarian think tank. “It’s hard to understand why an administration that’s been so responsible on Social Security is so irresponsible in dealing with Medicare.”

He said the price tag was likely to grow. “As with all entitlements, the cost is going to vastly exceed projections,” Cannon said. “Costs always outpace projections.”

When Congress passed the Medicare bill in late 2003, the Congressional Budget Office estimated its cost at $395 billion over 10 years. Weeks later, the Bush administration upped the projection to $534 billion. The current figure is $724 billion.

The publicity campaign will call on the Social Security Administration and the departments of Labor, Housing and Urban Development, Transportation and Veterans Affairs to disseminate information.

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Transportation, for instance, will work with cities and states to post information on buses and at highway rest stops, and the Social Security Administration will send out millions of letters to people likely to be eligible for help in enrolling.

To simplify the process, the signup form has been whittled to four pages and 16 questions, down from the 20-plus pages required of a typical Medicaid enrollment application, said Mark McClellan, administrator of the Centers for Medicare and Medicaid Services.

His agency has established a hotline -- (800) MEDICARE -- and, starting this fall, will mail to every Medicare beneficiary a booklet with information about the drug benefit.

Premiums will vary depending on the plan but are expected to average about $35 a month, a White House fact sheet said.

Beneficiaries will be protected against the highest out-of-pocket costs, with Medicare covering 95% of all drug costs above $5,100 a year. But no coverage will be provided for expenditures from $2,250 to $5,100, a gap known as the “doughnut hole.”

Low-income seniors, who make up about a third of Medicare’s 42 million beneficiaries, will not be required to pay a premium or a deductible and will have co-payments of $2 for generic or $5 for brand-name drugs.

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