Posted At Duluthsuperior.com

BY : Peter Rebahahn

Lifelong Duluth residents Eugene and Sharon Soderberg played by the rules.

They worked hard, lived within their means, saved money when they could, and did it all while raising six kids.

So the Soderbergs -- Eugene is 67 and Sharon is 65 -- were surprised to learn that their frugal ways have put them at a disadvantage in the new Medicare drug benefit plan.

The cheapest plan available to the Soderbergs will cost them annual insurance premiums of $4,100 -- more than seven times the roughly $550 they spend today by using the private drug discount cards that are due to be discontinued.

"It seems to be fundamentally un-American," Sharon Soderberg said. "You work hard all your life to make your retirement nice. We never made big money, but we made do. And now we're being punished for it."

Welcome to the world of Medicare Part D, said Marlene Hart, executive vice president of the Duluth-based Minnesota Citizens Federation-Northeast.

"I don't know what these people are going to do," Hart said. "That's half their annual income. But they don't qualify for low-income assistance because of their assets."

Under the new drug plan, low-income assistance is not available to individuals with assets, other than a primary residence, greater than $11,500, or $23,000 for couples.

The Soderbergs are not the only ones discovering surprises in the new drug benefit, said Buddy Robinson, staff director of the citizens federation.

Like millions of seniors nationwide, the Soderbergs have until May 15 to enroll in a plan or face a lifetime penalty of1 percent for every month they wait thereafter.

"If it really was good coverage they wouldn't need to scare you into buying it," said Robinson, whose group opposed many of the terms in the 2003 legislation that created the new drug benefit.

The new benefit takes effect Jan. 1 for those who enroll now. It adds prescription drug benefits to the existing Medicare benefits available to U.S. citizens at age 65 and to some disabled people younger than 65.

Unlike the hospital benefits automatically available to all U.S. citizens at age 65 under the original Medicare provisions, enrollment for the new drug benefit is neither automatic nor straightforward.

The federal government will subsidize and administer the new drug plan, just as it does the rest of Medicare. But private insurers, not the government, provide the coverage.

The Bush administration has touted big savings for enrollees. "But that really isn't true," Robinson said.

Savings for most enrollees range from 20 percent to40 percent, far less than the50 percent to 60 percent savings available by mail order from Canadian pharmacies, Robinson said.

The legislation that created the new benefit prohibits use of drugs imported from pharmacies in Canada. A provision that would have allowed the government to negotiate lower prices from drug companies was nixed from final legislation.

Robinson said the legislation was a gift to drug and insurance companies. Insurers would have had little or no role in a government-run program.

"They clearly had a top priority to privatize this," Robinson said.

Legislation aimed at extending the May 15 enrollment deadline to the end of 2006 has faced opposition from leadership in the U.S. Senate and House of Representatives.

Some lawmakers have called for a redesign of Part D to create a streamlined program administered by the government.

"Politically, this story isn't finished being written," Robinson said.

Sharon Soderberg, who also is helping her 89-year-old-mother choose a drug plan, said she and her husband haven't decided what to do.

"We're working on it," Soderberg said.