As enrollment in Medicare’s new prescription drug benefit lurched to a conclusion May 15, the University of Minnesota, Center for the Study of Politics and Governance and National Academy of Social Insurance, held a major symposium titled, “Reforming Medicare: Where Do we Go from Here?” Initial enrollment in the Medicare prescription drug benefit has ended but public debate on the future of Medicare is just getting underway.

A National Academy report discussed at the symposium focused in part on the recently released 2006 Medicare Trustees Report that the Medicare Hospital Trust Fund (Medicare “A”) will begin drawing on its reserves within the next four years and be bankrupt within the next 12. The Medicare Modernization Act requires Congress and the president to act to reverse this trend if it is not brought under control by next year.

In the debate over beneficiary sign-up rates and confusion about the enrollment process, it was easy to overlook a number of critical questions about the benefit’s long-term value. The Senior Federation and Medicare Justice Coalition can now focus on the question of whether or not enrollees were better off before Part D. Some of the issues that need to be resolved are:

• Is Part D using public dollars efficiently?
• Does the benefit adequately meet the needs of Medicare beneficiaries?
• Are all low-income beneficiaries adequately protected?

Many unknowns remain about the expense of Medicare Part D for the American taxpayers and whether these dollars are being used wisely.

Medicare Part D is a very costly program with ten-year estimates exceeding $735 billion. The Congressional appropriation was $400 billion. Initial estimates about actual discounts negotiated by prescription drug plans range between 8-15 percent, depending on who you ask. At the same time, negotiated prices by our government for the armed forces or negotiated rates by many other countries range between 40 and 60 percent.

Actuarially, Medicare Part D benefits will pay for about 50 percent of a senior’s drug costs. A USA Today story reports that one out of five enrollees will typically pay more for their prescriptions under Part D than they did before Part D. As most know by now, there is no uniformity in benefits, and comparing the 67 options available in Minnesota is a time-consuming and difficult undertaking. This lack of any uniformity has been a barrier to enrollment.

Knowing more about how low-income Medicare beneficiaries are faring is particularly critical. By early May fewer than 80,000 low-income Minnesota seniors were receiving Medicare Part D Extra Help. Many people who were denied Extra Help benefits were denied because their assets exceeded federal limits.

A Fix Medicare Rx Campaign is being launched by the Minnesota Senior Federation and Medicare Justice Coalition to demand positive action by Congress to fix injustices in Medicare financing, to provide a responsible and effective drug benefit, and to preserve the Medicare system for the years ahead. The campaign is encouraging all concerned to immediately contact members of our congressional delegation as well as candidates for office to take specific action to protect and enhance Medicare (see Fix Medicare Rx Call to Action.) MJC/MnSF Fix Medicare Rx Campaign Postcards are available through regional Federation offices. 

The Medicare Modernization Act represents the largest expansion of benefits in the program’s history. Now it is time to make sure that everyone eligible has access to these benefits and ensure that the benefit provides efficient, high-quality coverage.