WASHINGTON — As the deadline for enrolling in the Medicare drug plan approaches, the government has announced that seniors and disabled beneficiaries may have to pay as much as 7% more for their benefits next year.
The early estimates of next year's cost increases come as officials are launching an all-out drive to get drug coverage for at least 90% of seniors, either through Medicare or an employer-provided retiree plan, by May 15.
The program has attracted about 30 million elderly and disabled people, officials said Thursday. "If we keep the same pace of enrollment, we have a shot at being able to achieve 90% of all seniors and [disabled] people in this country with prescription coverage," said Health and Human Services Secretary Mike Leavitt. "If we had said that a year ago, people would have thought we were overreaching."
To reach that goal, Medicare must sign up nearly 3 million people in about three weeks. Some lawmakers are seeking to extend the deadline to keep seniors who do not sign up in time from having to pay financial penalties.
Critics and independent experts said it might be difficult to reach 90% without a deadline extension, because the 30 million signed up so far included many people who already had coverage.
It is estimated that about a third of the current total previously lacked prescription benefits. The rest had been enrolled in other government programs and in employer-backed retiree health plans that are now receiving Medicare subsidies.
"They have not yet reached their coverage goal, but they are clearly moving closer," said Tricia Neuman, director of Medicare policy for the Kaiser Family Foundation.
When Congress created the prescription benefit program, it stipulated that the government would issue guidelines each year for raising costs. Lawmakers decided that the share paid by beneficiaries should be indexed to reflect annual increases in prescription drug prices and consumer spending on medications. Cost sharing for other Medicare benefits is regularly adjusted for inflation.
For the drug program, the 6.86% increase guideline for next year means that the current $250 annual deductible could rise to $265. Premiums and co-payments might also change.
And the coverage gap known as the doughnut hole could expand from $2,850 to $3,051 next year. After meeting the deductible, seniors would be covered for up to $2,400 of prescriptions, but beyond that they would have to pay the full bill until drug costs reached $5,451, with an out-of-pocket maximum of $3,850. Medicare would pay 95% of further costs.
