May 2, 2006 > Don't get caught in the last-minute chaos
Don't get caught in the last-minute chaos
by Grace-Marie Turner
The final days leading up to May 15 will almost certainly be chaotic at Medicare offices. That's the deadline for seniors to enroll in the new prescription drug benefit without paying a penalty of higher premiums. Phone lines will be jammed and websites will be clogged. The organizations now helping seniors sign up will be overwhelmed by the last-minute rush to enroll.
That's why seniors shouldn't wait until May to pick a plan. The final month of the penalty-free sign-up period is almost here. But while more than 27 million seniors are now participating in the new drug benefit, millions more eligible seniors have yet to enroll.
Why are so many ignoring a program specifically designed to save them money? Perhaps it's because the newspapers and airwaves are filled with criticisms that the drug benefit is just not good enough. A recent poll found that an astounding 41 percent of drug benefit enrollees thought that political attacks on the program made other seniors less likely to sign up. That's a real shame, because it doesn't matter whether the program could benefit from some tinkering in the future. What does matter is that the drug benefit is a valuable insurance policy right now. Those with medium and small drug bills are able to buy peace of mind against future medicine costs for a reasonable price. Those with large drug bills get substantial help with their expenses right away.
Seniors who don't sign up by the May 15 deadline simply won't get as good a deal as those who do. They'll have to wait until the next enrollment period in November for their next chance to sign up. And their premiums will increase by at least 1 percent every month they delay, adding at least 6 percent to the cost.
Seniors who are feeling skeptical or confused should listen to those who already are enrolled. New enrollees in the Medicare drug benefit are overwhelmingly satisfied.
A survey by America's Health Insurance Plans found that 84 percent of those who have enrolled had no trouble signing up or using their benefit. Only 3 percent of seniors polled had trouble enrolling. Most seniors, 85 percent have experienced no problems using their new benefits, and 59 percent are already saving money.
The drug benefit is offering more and better choices than anyone anticipated when Congress crafted the program. The government estimated that seniors would pay $37 a month in premiums for their Medicare drug coverage. But the average premium has turned out to be much lower - $25 a month.
Competition among the private insurers offering plans has resulted in some great deals. Some prescription drug plans, for example, cost as little as $5 a month. Others eliminate the $250 deductible before coverage kicks in - so seniors can enjoy covered from the very first dollar they spend.
Some plans are even providing drug coverage in the infamous "doughnut hole" - the gap in the standard plan where insurance coverage is interrupted between moderate and high drug expenses.
Even The New York Times, the venue of choice for many of Medicare's critics, is finally coming around, recognizing that seniors are benefiting enormously under the program. The paper recently reported, "Those who have signed up say the total cost of all their drugs under Medicare is often less than the amount they were paying for just one prescription in the past."
The Times gave the example of a couple that together takes 24 medications. With the new benefit, their drug bills "will plunge to $4,900 or less a year, from more than $25,000." That's an incredible savings.
It would be a real travesty if political attacks kept some seniors from seeing real savings on their prescription drug bills. With premiums starting at less than $5 a month, they have next to nothing to lose by signing up. By law every plan must offer access to drugs in every medical category. And once you enroll, you can switch plans.
Seniors shouldn't wait until May 16 to realize what millions of others already have - perfect or not, the new Medicare drug benefit is a good deal.
Grace-Marie Turner is president of the Galen Institute, a non-profit research organization that focuses on free-market ideas for health reform. She can be reached at firstname.lastname@example.org.