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Seventy-year-old Marion White sometimes has to ask her children to help pay for nine prescription medications she takes.
That's not surprising: White has no insurance for drugs, and her income is less than $12,000 a year.
But starting this year, she may get government help in paying for her medicines, through subsidies under the new Medicare drug benefit program.
After years of debate, Congress finally added outpatient drug coverage to Medicare, the federal health insurance program for the disabled and people 65 and older. White is precisely the kind of person many advocates of drug coverage wanted to help.
How much the new law will save her and other seniors will depend on the details, some of which have yet to be worked out. Meanwhile, White and other Medicare beneficiaries must navigate the complexities of the new benefit.
"I'm kind of lost on what's going to happen," White says.
It's a daunting challenge for seniors. First they must decide whether to sign up for Medicare's new drug discount cards --- available in June --- and choose the best card for them. Then they'll determine if they should take the full drug benefit, which becomes available in 2006. With that option, they'll calculate how they are affected by a "gap" where coverage stops, then starts again.
Though enrolling for the main drug benefit is voluntary, there will be a penalty for delay after the sign-up period begins in late 2005.
"I don't think this plan has been explained very well," says Helene Mills, 76, for whom a new multipurpose senior center in Atlanta was named to honor her years as an advocate for the elderly. "All these questions leave people in the dark."
Even health insurance experts wonder about the new law's impact.
"We are having a hard time getting our arms around the whole bill --- which is much more than the drug benefit --- and how seniors will ultimately be affected," says Bill Custer, a professor of risk management and insurance at Georgia State University.
Tricia Neuman, a vice president of the Kaiser Family Foundation, a nonprofit research organization, says the amount of savings under the drug discount cards will depend on the individual: the drugs he or she takes, whether those drugs are discounted, and how much.
"The math will likely vary from person to person," Neuman says. Discount card handy
The new Medicare discount card program "could be worth it," says Gloria Morrison, 73, of Decatur.
She has no drug coverage now and pays $170 per month for three prescriptions. The discount cards have an annual cost of no more than $30.
The discount card is intended to provide immediate help --- before the main program gets up and running --- to many of the estimated 15 million Medicare recipients who lack drug coverage. And the card plan got off to a fast start, as the federal Centers for Medicare and Medicaid Services started rolling out rules just two days after the bill was signed by President Bush.
The cards will be available in June, but there still are details to be worked out, such as what the cost will be and which private companies will participate. The cards and the drugs they discount will vary, so seniors have to compare cards and the medications they take to find the best deal. Medicare promises to provide information to help seniors choose.
The government estimates the cards will save seniors 10 percent to 15 percent off their total drug spending.
Even so, some experts question how much of a help the new cards will be. They say, for example, that the same savings may be available simply by shopping for the best price for a drug.
Clearly, low-income seniors like Marion White stand to benefit.
She spends $200 to $400 a month for her prescriptions and worked at an assisted living center until last year just to pay for medicines for blood pressure, thyroid and asthma problems.
The Atlanta resident's low income means she could qualify for a $600 annual credit on the card and have the card fee waived as well.
Seniors will be eligible for the $600 credit if their income is less than 135 percent of the federal poverty level --- $12,123 for singles and $16,362 for married couples. An estimated 4.7 million Americans are expected to get the subsidy.
The card program ends in 2006, when the main drug benefit begins. The 'doughnut hole'
Emile Cotton may fall into the "doughnut hole."
The doughnut hole --- or coverage gap for seniors after they've spent $2,250 out of pocket --- has been one of the chief causes for criticism of the main drug benefit.
After spending that much, seniors have no coverage until they pay the next $2,850 for prescriptions from their own pocket. Then coverage picks up again.
Ken Thorpe, an Emory health policy expert, says there is no drug insurance now that has such a gap. It's a result, he says, "of playing around with the drug design to keep [its total cost] under $400 billion."
Cotton, 78, of East Point spends up to $500 a month for about eight medications. She has no coverage now.
"I had to cut some prescriptions out because I couldn't afford them," Cotton says. She hasn't refilled a heart medicine because it's expensive, and she "stretches" other prescriptions by taking them less often than prescribed.
Cotton says her income is a little too high for her to get the Medicare subsidies.
She will pay the deductible and premiums, then get her first break: paying only 25 percent from $251 to $2,250. After that, she'll pay all costs out of pocket, as she does now, until her total spending reaches $5,100. Above that, Cotton will pay 5 percent of the next $900.
So instead of paying $6,000, if her spending is unchanged, Cotton will lower her tab by almost $2,000, spending $4,065 a year. And she'll keep getting 95 percent coverage if her drug spending escalates. Over the limits
Although Dorothy Benson will likely exceed the income and asset limits for subsidies, she could still get needed help for her drug bills after paying the deductible and premiums.
Benson, a longtime seniors advocate, says she spends about $195 for medications every month, or about $2,340 per year.
If the 82-year-old Alpharetta woman chooses the Medicare drug benefit, she will pay an estimated $420 a year in premiums and the first $250 she spends on drugs as a deductible.
Then Benson will pay 25 percent of the cost of her prescriptions from $251 to $2,250, or a total of $500.
If her drug spending remains the same, Benson will fall just over the edge of the doughnut hole, or coverage gap.
Still, the benefit will cut Benson's out-of-pocket spending almost in half. "That'll be pretty good," she says.
But once the full benefit becomes available, she'll probably want to decide quickly whether to enroll in late 2005. There's a penalty for waiting. Enrollees will pay higher premiums --- 1 percent more for each month enrollment is delayed --- for life.
Benson says seniors need individualized explanations of how the drug program will affect them. "Representatives should go out to every senior center and have seniors make an appointment with them," she says.
Helene Mills appears to be better off sticking with drug coverage through her former employer.
Mills, retired from the Internal Revenue Service, says her plan covers generics at $10 each and pays half the cost of brand-name drugs. She takes one of each, and her cost is $47.50 a month, or $570 a year.
That's less than the Medicare coverage's deductible and premiums, estimated at $670. So remaining in her current plan would seem to be a good deal for Mills.
Likewise, Janet Cukor has retiree coverage that now picks up 75 percent to 80 percent of the cost of her prescriptions, and she pays about $500 out of pocket a year.
"The biggest thing that bothers me is what our employer will do --- will they drop the retirees?" says Cukor, 79, of Chamblee.
Those with retirement coverage won't be subject to the late enrollment penalty if a former employer cancels coverage. And the Medicare plan does offer subsidies to employers to retain their retiree coverage.
But employers in recent years, citing costs, have dropped or cut back on insurance coverage for retirees. Only 21 percent of large employers still offer medical coverage to Medicare-eligible retirees, down from 40 percent 10 years ago, according to a recently released employer survey by Mercer Human Resource Consulting.
Seniors who lose benefits from former employers may suffer a big drop in coverage --- getting Medicare coverage of just 45 percent, on average, of their drug spending, compared with typical employer coverage of 75 percent, Thorpe notes. Big savings possible
When Medicare's full drug benefit begins in January 2006, Georgette Smith is in line for huge savings.
Now, Smith, 80, of Atlanta has no drug coverage for her six medications for blood pressure, stomach and cholesterol problems. She spends nearly $4,000 a year on prescriptions --- almost 45 percent of her income.
"If my house wasn't paid off, I wouldn't know what to do," Smith says, adding that her son recently helped her get one medication free from a drug manufacturer. Her family has also helped her pay for medications.
That new benefit in 2006 --- voluntary for the 40 million Medicare members --- will especially help low-income seniors who lack drug coverage now and have too much income to qualify for Medicaid, the health insurance program for the poor.
Seniors with incomes below about $13,000 for singles or $17,600 for couples in 2006 and assets under $6,000 for singles or $9,000 for couples will pay no premium or deductible for the Medicare drug benefit and will have no gap in coverage. They will pay $2 for generic drugs, $5 for brand-name drugs and nothing above the catastrophic coverage limit.
There's a lesser subsidy for people with slightly higher income and assets.
The asset restriction, expected to include liquid assets like savings, may be hard to meet for many low-income seniors. The asset test could disqualify many from maximum coverage, says Emory's Thorpe.
With income of about $750 per month from Social Security and a pension, and with few assets --- Smith's home likely won't count against her --- she would qualify for the low-income subsidy, and so her drug spending could plummet from $4,000 a year to $360 or less.
"I've been waiting for this for a long time," she says.
Copyright 2004 The Atlanta Journal-Constitution