Posted At The Times-Picayune

By Bill Walsh

WASHINGTON -- Medicare won't begin paying for prescription drugs until Jan. 1, but the Bush administration already is ramping up an aggressive enrollment campaign aimed at the 43 million seniors and disabled people in the federal health insurance program.

The early start, which began in May, is an indication of the challenge the administration faces in getting out the word about a complex, potentially generous new health care benefit. Low-income people stand to gain the most, but they have historically proved to be the hardest to enroll in government assistance programs. The $1 billion outreach campaign will target them first.

"This has been a hard population to reach," said Mark McClellan, the Medicare administrator. "That's why we are starting more than seven months before to help them enroll." The drug benefit, passed by Congress in 2003, represents a new chapter in the 40-year history of the popular program. Medicare has never paid for outpatient prescription drugs. And in the past, any new benefits were automatically given to every beneficiary, no application required. The drug benefit signals the end of one-size-fits-all Medicare.

Array of choices

Under the new law, beneficiaries can stay in traditional Medicare and pay about $37 per month and a $250 deductible to have the government cover about three-quarters of their prescription drug costs. Or they can opt into any number of privately run Medicare Advantage health plans, all which will cover different menus of prescription drugs along with a variety of other health services.

"All 43 million people (in Medicare) have to look at it through the lens that applies to them," said Michael McMullen, Medicare's deputy director for beneficiary choices.

The array of choices adds a layer of complexity to the outreach. Under the new program, individuals with annual incomes below $14,355 and couples making less than $19,245 will be eligible for extra subsidies to cover the costs that the government doesn't pay, such as premiums, co-payments and deductibles. But they will first have to apply for the subsidies and then enroll in a Medicare Advantage plan.

That two-step process has people inside and outside the government worried that those most in need of the financial assistance won't get it. A survey in April by the nonprofit Kaiser Family Foundation found that 68 percent of Medicare recipients didn't have a good understanding of the new benefit and almost as many didn't know how it would affect them.

"Unfortunately, the steps of applying and enrolling are difficult for people to understand," said Vicki Gottlich, an attorney with the nonprofit Center for Medicare Advocacy. "Lots of people who are getting the applications now think that that's all they have to do."

Asset test

Adding to the complexity is an asset test, the first to be imposed on Medicare. While some beneficiaries may qualify for the extra subsidies by virtue of their income, they could be disqualified if their assets -- including stocks, bonds, bank accounts and life insurance policies -- are above a certain threshold. One study estimated that more than 2 million beneficiaries who would have qualified for assistance in paying their premiums and deductibles won't get it because of the asset test.

"It will have the effect of excluding people with low incomes from the low-income subsidy," Patricia Neuman of the Kaiser Family Foundation said.

Anticipating confusion over the subsidy eligibility rules, the administration is telling seniors to follow a simple rule about applying for the new benefits: When in doubt, fill it out.

Despite the limitations of the new program, it is expected to pay for up to 95 percent of the drug costs for millions of low-income Americans and pick up a sizable portion of the bills for millions of others. The National Council on Aging has estimated the average value of the benefit will be $2,100 a year.

Outreach effort

Borrowing a page from direct marketers, the Social Security Administration in May began mailing the first of 19 million letters to people who may be eligible for the low-income subsidies. The government has also trained about 1,900 groups nationwide to help beneficiaries fill out the application, which has a bar code that can be scanned on the spot without beneficiaries visiting a government office. Federal officials have adopted a grass-roots approach, enlisting churches, senior centers and pharmacists to help explain the process to seniors.

"We want (beneficiaries) to do it in their home or wherever they are used to going," said Beatrice Disman, director of the Medicare Task Force of the Social Security Administration. "The whole strategy was that people can help this population fill out the application."

At four pages, the application is simpler than the one used to evaluate eligibility for the drug discount card offered during the past two years. The administration was chastened by its experience with the drug card.

Although it offered a $600 annual subsidy to low-income people, only 25 percent of those eligible signed up. Sparse participation in federal entitlement programs is not unusual. Only 30 percent of seniors eligible for food stamps are enrolled in the program, which has been around since 1964.

To boost participation in the new program, about 7 million people who currently get their prescription drugs paid for through Medicaid will be automatically enrolled in the Medicare drug program. The challenge, advocates and officials say, will be signing up the other 7 million believed to be eligible for the special low-income subsidies.

"We believe this is the single biggest opportunity to help people with limited incomes on Medicare in the last 40 years," said Jim Firman, president and CEO of the National Council on Aging. "These people have to be found and enrolled. If they don't sign up, they don't get the benefit."