Headaches likely as citizens try to grasp Medicare reforms

Published: Friday, July 29, 2005 5:26 p.m. MDT
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Upcoming changes to government-sponsored insurance programs will drastically alter the way the elderly, low-income and disabled Americans pay for and fill their prescriptions, but it will not be without a lot of confusion first — even for the man who likely understands the system better than anyone else in Utah.

"How do you understand this thing?" Michael Deily, director of health-care financing for the Utah Health Department, rhetorically asked lawmakers Thursday.

The Medicare prescription drug benefit plan, to be rolled out this fall, is so complex that even Deily had a tough time explaining it recently to his 86-year-old father, a retired aerospace engineer, and stepmother, a former schoolteacher. And that's after reading the law and ensuing regulations many times and discussing it time and again with federal officials, he said.

"That gives me a lot of pause," Deily told members of the state's Health and Human Services Appropriations Subcommittee.

By year's end, some quarter of a million Utahns will see drastic changes to their government-sponsored insurance benefits under the Medicare Modernization Act of 2003. Co-sponsored by Sen. Orrin Hatch, R-Utah, and hailed by President Bush as "the greatest advance in health-care coverage for America's seniors since the founding of Medicare," the legislation added prescription drug coverage for some 43 million elderly and disabled Americans.

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But getting all those people signed up for the new program will be tough and will require collaboration at all levels of government, experts said Thursday.

"If there were a theme that might be put on this, it might be 'Mission Impossible,' " said Alex Trujillo, regional administrator for the Centers for Medicare and Medicaid Services. "(But) we don't have the option of backing off and saying we can't do it."

The benefit plan is available to all recipients of Medicare, a federal insurance plan for disabled Americans as well as those 65 and older. Some recipients of Medicaid, a joint federal and state program for low-income individuals, will also qualify for the program.

With the federal government taking on the prescription drug costs of those "dual-eligible" people, the program is touted as a way to save states money. However, other factors will drive costs up for states, leaving the exact budget impact up in the air for most states.

Utah will either lose money or break even for the first several years, Deily said, before seeing any kind of profit. Other states are projecting massive losses, such as an estimated $50 million in California, he said.

The first phase of the act called for eligible beneficiaries to sign up for a Medicare prescription drug discount card, which they could present at participating pharmacies to save money on medication between June 2004 and the end of this year. In Utah, 20,000 people signed up for the discount cards and another 4,500 took advantage of a $600 transitional benefit for low-income seniors and those with disabilities.

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