March 12, 2004                          

"Medicare Beneficiary Outreach and Education Efforts"

The Alliance to Improve Medicare (AIM) hosted a briefing on education efforts for the new Medicare program enhancements. Speakers included Julie Goon, Director of Medicare Outreach, HHS Centers for Medicare and Medicaid Services; Brian Robinson, Press Secretary, Office of the Honorable Phil Gingrey (R-GA); Paul Dennett, Vice President, Health Policy, American Benefits Council; and Scott Parkin, Vice President, Communications, National Coalition on Aging on behalf of the Access to Benefits Coalition.

Ms. Goon described efforts to inform Medicare beneficiaries about the new Medicare benefits, focusing her remarks on the rollout of the new Medicare-approved drug discount cards. She stated that discount card activities represent the single largest effort ever undertaken for a new program. She reported that discount card options would be announced in April with enrollment beginning on May 3, 2004.

Ms. Goon noted that education and outreach efforts are focused on: 1) development and dissemination of effective messages and materials to target audiences; and 2) coordination of education efforts to reduce duplication and ensure consistency.  HHS officials are coordinating outreach efforts through the departments of HUD, Labor, and Education, as well as agencies including the SSA, Indian Affairs, and Women's Health.  Target audiences include both low-income seniors and groups, such as health care providers, who interact regularly with seniors.

CMS, according to Ms. Goon, will use several channels to disseminate information about the new cards, including 1-800-Medicare, www.medicare.gov, list serves, print materials, television and print ads, and community-based outreach. She also described the new price comparison database that will be available for seniors to compare potential discount card savings. The price comparison, to be available on the www.medicare.gov site, will allow comparisons by zip codes and by specific drugs. The price comparison database will allow beneficiaries to choose the discount card that will best meet their needs based upon the medications prescription by their doctors. Seniors without Internet access will be able to utilize the database information through 1-800-Medicare.

Finally, Ms. Goon reported that CMS is training over 1,400 customer service representatives for the 1-800-Medicare site. These representatives will be trained to answer specific questions about the discount cards and other Medicare enhancements.  Training is also planned for CMS regional office employees, health care professionals, pharmacy professionals, state officials involved in seniors' programs, and other community-based partners.

Mr. Robinson stated that Representative Gingrey (R-GA) has utilized a grassroots and multi-media approach for outreach on the new Medicare law, including over 30 Medicare workshop events, two franked mailings, a public service announcement, and numerous letters to the editor of local newspapers.  Mr. Robinson stated that Rep. Gingrey's approach is to educate seniors and share facts about the new law, not to "sell" the proposal.  He reported that seniors remain concerned about three aspects of the new law including retiree health benefits, coverage for specific illnesses, and the overall cost of the new benefits. He cautioned that individuals or Members hosting Medicare events should be prepared to answer questions on these topics.

Mr. Dennett noted that employer sponsored health plans provide supplemental coverage to approximately 30% of Medicare seniors. Nearly all of these plans (93 %), according to Mr. Dennett, cover prescription drugs.  He noted that retiree health benefit costs increased by over 13% in 2003, that retirees share of premiums and cost-sharing continues to increase, and that coverage for current retirees is much more secure than for future retirees.

Mr. Dennett outlined six options available to employers offering retiree health benefits under the new Medicare law. He focused specifically on the "centerpiece of the Medicare law", the employer subsidy offered for prescription drug coverage. Beginning in 2006, according to Mr. Dennett, if a retiree is enrolled in an employer sponsored health plan, Medicare will reimburse the employer for 28% of the annual prescription drug claims between $250 and $5,000 of that employee, up to $1,330. The employer's prescription drug coverage must be at least actuarially equivalent to the Medicare prescription drug benefit.  Employees must not be enrolled in either a new prescription drug plan (PDP) or a Medicare Advantage (MA) plan.

Other options available to employers and outlined by Mr. Dennett included: employer payment of Medicare premiums; employer-provided supplemental Medicare coverage; PDP or MA plan waiver for specific employer groups; employer waiver to sponsor own PDP or MA plan; and employer sponsored health savings accounts (HSAs).

Finally, Mr. Dennett noted that U.S. companies who provide retiree health benefits, including Kodak and Dupont, are examining these options under the new Medicare law and communicating with their retiree populations about their health coverage.

Mr. Parkin stated that the Access to Benefits Coalition seeks to ensure that low-income Medicare beneficiaries know about and can make optimal use of new Medicare prescription drug benefits and all available resources for saving money on prescription drugs.

He noted that the new Medicare law is the single most important opportunity to help low-income Medicare beneficiaries in the past 35 years.  Mr. Parkin stated, however, that most beneficiaries are confused and that few low-income beneficiaries are aware of the $600 subsidy available to them. The challenge, according to Mr. Parkin, is to successfully implement and enroll seniors and low -income beneficiaries in two programs: the discount drug card in 2004 and the prescription drug plan in 2006.

Mr. Parkin stated that outreach to low-income beneficiaries is necessary.  He reported that 7.4 million low-income beneficiaries will be eligible for the $600 annual subsidy but that CMS estimates that 2.7 million of these beneficiaries will fail to enroll and will forfeit the subsidy. Additionally, an estimated 14.1 million seniors will be eligible for the full low-income benefits of the prescription drug plan beginning in January 2006. Mr. Parkin reported that CBO estimated that only 70% of eligible beneficiaries would likely receive these benefits in the first seven years of the program.