CMS’s Medicare and You 2006 Contains Significant Error that Affects Low Income Beneficiaries Enrolling in Part D Plans

Issue 29, Autumn 2005

CMS’s Medicare and You 2006 Contains Significant Error
that Affects Low Income Beneficiaries Enrolling in Part D Plans

by Alison Hirschel, MPLP Elder Law Attorney

The Centers for Medicare and Medicaid Services (CMS) has recently acknowledged that the Medicare and You 2006 handbook it sent to more than 40 million Medicare beneficiaries contains a significant error that may be detrimental to beneficiaries with income below 150 percent of the Federal Poverty Level. The handbook, which is considered a major tool in educating beneficiaries about the complicated new Part D program, erroneously states that the full premium for beneficiaries who qualify for the Low Income Subsidy will be paid for the beneficiary in all prescription drug plans. In fact, approximately 60 percent of the plans would require additional payment from these low income participants. Currently, the Handbook is the only comprehensive list of drug plan choices that CMS plans to send to beneficiaries, so this significant error could cause great confusion and additional expense for these needy beneficiaries.

Among the estimated 14 million Low Income Subsidy recipients are almost 7 million dual eligibles, all of whom qualify for the subsidy. These individuals will be automatically enrolled in a prescription drug plan in which their full premium is covered, but since the enrollment is random, the plan in which they are enrolled might not meet their needs. These beneficiaries will be permitted to select different plans at any time and are likely to want to do so if the plan into which they are enrolled does not cover their medications or work with their local pharmacy. However, if they rely on the erroneous information in the handbook, they might unwittingly choose to switch to a plan that better meets their needs but which will obligate them to pay premiums. Other Low Income Subsidy recipients will not be automatically enrolled in plans and will need to choose a plan to receive Part D benefits. Many of these individuals might be misled by the handbook and fail to realize that the majority of available plans will require them to pay premiums.

Although CMS has acknowledged its mistake and posted information about it on its website, it is not clear that beneficiaries will learn the truth about premium costs in the different plans. Individuals calling Medicare’s toll free line will only be given specific premium information if they ask about a specific plan. Callers will also be told that they may contact the organizations offering the plans for more information but some advocates fear these calls will result in beneficiaries being subjected to sales tactics and marketing ploys instead of straightforward information about premium costs.

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