Medicare Part D: Watch Those Numbers

What happens to the drug benefit depends on how many people enroll. So far, that’s not many.

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In the short run, what happens to the drug benefit depends critically on enrollment, enrollment, and enrollment. Yet voluntary enrollment in the benefit has been sluggish so far at best.

If beneficiaries enroll steadily despite their confusion, irritation, and the deserved bad publicity for the benefit as it has gone “live,” the market-based design will have a chance to work temporarily—probably until the federal government stops assuming much of the insurers’ risk. Insurers flocked to the benefit in large part because there was some chance that they could make money without much chance of loss. If enrollment is robust, drug companies will compete to offer lower prices, premiums will remain relatively low, plans will stay in the market, and beneficiary dissatisfaction with the program will subside. If enrollment continues to flag, premiums will rise, plans will pull up stakes, and the future of the benefit will be in more immediate jeopardy.

As it stands, due to the complicated design and the ham-handed implementation of the benefit, the rollout seems almost calculated to reap successive waves of bad publicity. First we saw the mystifying two-stage sign-up process for dual eligibles, followed by the announcement of participating drug plans without adequate supporting information, and then the bungled transfer of beneficiaries from Medicaid to Medicare. Another round of negative publicity may predictably ensue in May, when beneficiaries who haven’t yet signed up face late enrollment penalties.

The drug benefit’s implementation has been so feckless that one might think—even making reasonable allowance for bureaucratic snafus—that the success of freestanding drug plans is not the administration’s intent. Instead, it may be pursuing a more longstanding goal—increasing enrollment in private Medicare managed care plans. Compared to negotiating the labyrinth of premiums and cost-sharing arrangements in the standalone prescription drug plans (PDPs), joining a Medicare HMO is a snap.

This migration toward comprehensive private plans might already be in the works. As an article in yesterday’s Wall Street Journal points out, Humana plans to use the lure of low premiums for its PDPs as a loss leader for its more profitable Medicare Advantage (MA) plans. To be sure, this may only be one insurer’s gamble, but the enrollment numbers for MA plans bear watching.

One other enrollment number, sadly, stands out: the relatively low number of low-income Medicare beneficiaries who have successfully applied for subsidies. Just 1.1 million of the 4.6 million HHS projected last year would receive this subsidy in 2006 have been approved thus far. Since these are the beneficiaries who stand to gain the most from the drug benefit, this slow take-up rate is especially troubling.  

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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