Initial Part D Enrollment Numbers Indicate Strong Retiree Participation

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http://tricare.osd.mil/eenews/downloads/011206InsideCMS.doc

Inside Washington Publishers/Inside CMS

January 12, 2006

INITIAL PART D ENROLLMENT NUMBERS INDICATE STRONG RETIREE PARTICIPATION


More than 21 million beneficiaries have so far signed up for Medicare's new prescription drug benefit, according to the first available enrollment figures issued by CMS Dec. 22. But beneficiary advocates contend that CMS is inflating the true enrollment total by including seniors who already had some type of drug coverage.

Of the 21 million who have joined the program, 11.1 million are retirees and the rest are either Medicare Advantage plan enrollees or dual eligibles who were automatically signed up for Part D. Only 1 million of the total tally signed up voluntarily.

CMS chief Mark McClellan and HHS Secretary Michael Levitt Dec. 22 revealed the number of seniors who signed up for coverage between the Nov. 15 enrollment kick-off and Dec. 13. The CMS chief said he was pleased with the high number of enrollees so far and expected another enrollment spike in April and May, toward the end of the six-month open enrollment period.

CMS had several hundred thousand drug plan applications in the pipeline and was receiving tens of thousands more per day, said McClellan.

The bulk of the enrollees signed up by Dec. 13 were retirees, totaling just over 11 million. In a release, CMS broke down this number by employer or union retirees that qualified for the employer drug subsidy, employers that are supplementing Part D coverage, and federal retirees. CMS data show 5.9 million retirees are enrolled via employer subsidy coverage and 3.1 million via federal programs such as the Department of Defense's health plans, TRICARE and the Federal Employee Health Benefit Program.

The CMS chief noted that outside groups had predicted employers would drop retiree drug coverage for Medicare eligibles, but the agency's initial figures showed that employers and unions were taking advantage of the Part D subsidy available to them and continuing retirees' current coverage.

"This is unexpectedly strong retiree participation," McClellan said. "It was a concern that employer coverage would be dropping, that has not happened."

Beneficiary advocates were quick to point out that of the approximately 21 million beneficiaries enrolled, 20 million already had drug coverage of some kind. For instance, 6.2 million dual eligible beneficiaries and 4.4 million Medicare Advantage beneficiaries were auto-enrolled. Also, CMS included the 3.1 million beneficiaries with federal drug coverage who will continue to get drug coverage under TRICARE not Medicare.

Excluding both of these categories leaves just 1 million beneficiaries who signed up on their own.

"I think it serves no one to over-estimate the number who have enrolled," a beneficiary advocacy representative said.

"Rather, we should all recognize the significant barriers to understanding the program, to identifying one's choices, and to enrolling. The Administration should move to expand the period during which people can enroll without a penalty."

Beneficiaries face a 1 percent per-month Part D premium hike for enrolling after May 15.

One advocacy source did point out that the Part D benefit will mean improved drug coverage for the 4.4 million Medicare Advantage beneficiaries enrolled so far.

In the final drug benefit rule issued last January, CMS estimated that 91 percent or around 39 million Medicare beneficiaries would have drug coverage either through Part D or through employer subsidies. However, McClellan said Dec. 22 that CMS now expects 28-30 million beneficiaries to sign up for the benefit during the first year.

McClellan acknowledged that the initial enrollment period divided beneficiaries into those who had drug coverage and those who did not, but predicted that the remaining beneficiaries -- 8-10 million -- will sign up for stand-alone prescription drug plans (PDPs) and MA-PDPs.