80% of Seniors Doubt Medicare Drug Benefit

Bewildered by the complexity of the new Medicare outpatient prescription benefit, seniors will not be rushing to sign up, according to a comprehensive survey released Thursday as open enrollment draws near.

Although the government has spent more than $250 million to promote and explain the benefit, 20% of people 65 or older have decided they’ll enroll, the survey by the Kaiser Family Foundation and the Harvard School of Public Health found. It was conducted Oct. 13 to 31.

Thirty-seven percent said they would not sign up, and 43% said they had not decided what to do. Open enrollment starts Tuesday and ends May 15.

If doubts harden into disdain, that could force major changes to one of President Bush’s most promoted domestic-policy accomplishments.

“The potential is grim,” acknowledged John Rother, policy director of AARP, the seniors lobby, which lent critical support for congressional approval of the program.

“If only 20% or even 30% of seniors sign up, that is very negative for the future of the program, because the people most likely to sign up are the people with high drug expenses, and you don’t have insurance if you don’t spread the risk among people who are healthy,” Rother said.

The government has estimated that two-thirds of seniors will sign up in the first year of the benefit. But many seniors appear to be stumped.

There is “almost paralysis over what to do,” said Mollyann Brodie, polling director for the Kaiser Family Foundation, which has cosponsored nine surveys on seniors’ attitudes toward the new benefit.

Many seniors are confused about having to pick among dozens of private prescription plans that will offer the government-subsidized benefit in each state, the survey found.

Others who may already have drug coverage through a former employer, or who purchase it on their own, are not sure how to evaluate the costs and benefits of switching.

Those who delay beyond May 15 could pay a penalty in the form of higher premiums in subsequent years.

“Beneficiaries are having a difficult time answering the most important question: ‘What does it mean for me?’ ” said Drew E. Altman, president and chief executive of the Kaiser Family Foundation, a nonprofit that conducts healthcare research.

Medicare covers hospital and doctor visits for more than 42 million elderly and disabled beneficiaries, but until now the program has not paid for outpatient prescriptions.

Health and Human Services Secretary Mike Leavitt said it was too early to predict whether the drug plan would succeed or fail.

“By the time we get to May, people will have experience with this and will have a much deeper understanding, and those polls will have changed,” Leavitt said in a teleconference with reporters. “We will slowly build an understanding.”

Economists say the drug plan should be a good deal for most seniors because the government will pick up three-fourths of the program cost.

Beneficiary premiums averaging about $32 a month will cover the rest.

However, budget constraints led Congress to design a complicated benefit.

For instance, it has a coverage gap -- nicknamed the “doughnut hole” -- between $2,250 and $5,100 of annual expenses. Seniors must purchase supplemental policies to cover that.

Medicare Administrator Mark B. McClellan pointed to a survey in which about half of seniors said they were likely to enroll.

But that survey, a Wall Street Journal Online/Harris Interactive poll, was conducted online Oct. 26 to 28, and the sample of people 65 or older was relatively small at 290. Of the 802 seniors telephoned for the Kaiser Family Foundation poll, 76% said they had never been online.

The Journal/Harris survey also found increasing doubts among seniors about whether they would be able to choose the right plan.

In the Kaiser Family Foundation survey, 39% of seniors said they thought the drug plan would be very or somewhat helpful to them personally, while 49% said it would be “not too helpful” or “not at all helpful.”

It also found that about half of low-income beneficiaries were unaware that they would probably be eligible for extra subsidies that might dramatically reduce their costs.

The foundation’s poll found that seniors who took more prescription medications were more likely to say they would enroll.

Among those who take more than four prescription medications a day, 25% said they would sign up; 16% of those who take one to three medications daily said they would get the coverage.

Organizations that work with seniors in California say they have been bombarded with questions about the benefit.

“We don’t have enough time to be able to help each individual understand the benefit,” said Clare Smith, president and chief executive of California Health Advocates, a nonprofit that advocates for Medicare beneficiaries in the state. “People are completely overwhelmed by the number of plans and the varying rules.”

Acknowledged Secretary Leavitt: “It is going to take time for seniors to become comfortable with the choices.”

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Prescription-plan ‘paralysis’

Despite a $250-million promotional effort by the federal government, most seniors are unwilling to enroll in the program or are undecided, according to a Kaiser Family Foundation survey:

Plans for 2006 enrollment

*--* Will enroll Will not enroll Don’t know All seniors 20% 37% 43% Seniors who currently have drug coverage 14% 44% 41% Seniors who have no coverage 28% 23% 49%

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Impressions of plan

*--* Unfavorable Favorable Feb. ’04 55% 17% April ’04 47% 24% June ’04 45% 24% Oct. ’04 44% 27% Dec. ’04 42% 25% April ’05 34% 21% Aug. ’05 32% 32% Oct. ’05 37% 31%

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Why not enrolling (among those who will not enroll or are uncertain, percent saying each of following is a major reason)

Already have coverage: 60%

Don’t know enough about plan: 46%

Don’t think plan would save me money: 45%

Plan too complicated: 37%

Don’t take enough prescriptions to need plan: 28%

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Source: Kaiser Family Foundation