If they want to continue paying a minimal monthly premium or no premium at all, more than 600,000 low-income Medicare recipients in California will have to choose a new prescription drug plan before the end of the year or be automatically reassigned to a plan that may not include the services they need.
The changes are necessary because the two largest prescription drug programs in California -- United AARP MedicareRx Plan Saver and Humana PDP Standard -- and five other programs will no longer qualify under Medicare as no-premium plans. Their monthly charges are increasing too much next year to be considered full-subsidy plans.
If low-income people in those programs “have to pay a $5 or $6 or $10 premium, that can affect their budget and the chance to buy medication or food or pay for rent,” said Kevin Prindiville, staff attorney at the National Senior Citizens Law Center’s Oakland office.
Before the prescription drug program took effect in January 2006, low-income Medicare recipients -- who include seniors and people with disabilities -- were asked whether they wanted to choose a plan or be assigned to one.
In large part because of the complexity of the program, the vast majority wanted to be assigned to a plan.
In either case, their premiums are completely covered or largely subsidized by the government.
Of the 600,000 beneficiaries affected in California, about 500,000 were assigned to a plan, and they will be reassigned to a different program, Prindiville said. The 100,000 who chose their own program must either pay the new monthly premium for their current plan or select a no-premium plan during the annual open enrollment, which begins Thursday and runs through the end of the year. Each plan differs in the medications it covers, however, so the new no-premium plans may not include the drugs beneficiaries now take.
“We’re a little bit worried that people are not going to understand what is going on,” Prindiville said. “And 30% of people in California receiving low-income subsidies have limited English proficiency.”
Nationally, more than 2.5 million low-income Medicare recipients are affected -- 2.1 million will automatically be reassigned and 440,000 will have to choose whether to go with a new plan or pay the premiums for their current plan.
They are now being mailed up to 50 pages of information explaining the changes.
The prescription drug program, formally known as Medicare Part D, was the centerpiece of the controversial overhaul of Medicare in 2003.
Medicare requires seniors who do not already have health insurance that covers prescription drugs to enroll in Part D -- even if they are not currently taking prescription medication -- or else pay hefty fees if such drugs become necessary. Beneficiaries can change their plan during open enrollment.
Low-income individuals pay a small or no premium. Most others pay less than $30 a month; those monthly premiums are expected to rise an average of $4 for 2008.
On Wednesday, the Kaiser Family Foundation, a healthcare policy center in Washington, released an analysis of Part D increases.
The results show that for most seniors who pay premiums, the average monthly cost will rise 17%, from $27.39 in 2007 to $31.99 in 2008.
By comparison, the increase in average monthly premiums from 2006 to 2007 was just 5%, from $25.93 to $27.39. About a quarter of the drug plans are decreasing their premium costs slightly for 2008.
Tricia Neuman, the foundation’s vice president and director of the Medicare Policy Project, helped draft the analysis and said the findings underlined the importance of finding the best plan and changing if necessary. About 90% of seniors had the same plan in 2006 and 2007.
“Plans do change year to year,” she said. “Costing requirements and the drugs that they’re covering changes. All those things can change the out-of-pocket cost and the access [seniors] have to the medication that they need.”
In California, advocacy groups like the Health Insurance Counseling and Advocacy Program can help recipients find the best plan to meet their individual needs.
Locations of HICAP offices are at www.cahealthadvocates.org.
“There are 56 plans. It’s crazy, and per county there are variables; it’s a huge undertaking,” said Clare Smith, president of California Health Advocates, the parent company of HICAP.