Penalties for Missed Medicare Drug Deadline May be Eliminated

Lawmakers are pushing to eliminate penalties for seniors who failed to enroll in the new Medicare prescription drug benefit by the May 15 deadline.

Tens of thousands of seniors hustled to call Medicare's customer service operators or enroll online before the midnight cut-off time, but many were so overwhelmed by the complexity of Medicare Part D and the variety of choices available, that they couldn't make a decision.


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Democrats and some advocacy groups are pressing for an extension of the deadline and an end to the permanent surcharge of 1 percent of the premium cost for each month of delay. The next enrollment period does not begin until Nov. 15, with no coverage until Jan 1.

U.S. Rep. Nancy Johnson, R-Conn., told the Associated Press that she plans to introduce legislation to waive the penalty, joining a small group of Republican lawmakers who have differed with President Bush on keeping the deadline and late-enrollment penalty in place.

"The bottom line is this is a democracy, and the Congress responds to the people and shapes the program so it's good for them," said Johnson, who heads the House Ways and Means' subcommittee on health.

According to the New York Times, one idea that is gaining ground is to retain the May 15 deadline and the Nov. 15 enrollment start-up date, but eliminate the penalty for those who sign up at the end of the year.

U.S. Rep. Charles Rangel, D-N.Y., called it “improper and wrong” to penalize the nation's oldest citizens. “I really think it's a cruel thing to penalize people for what has been admittedly a very complex procedure, in order to get the drugs.”

One leading critic, Robert Hayes, president of the Manhattan-based nonprofit Medicare Rights Center, called the prescription plan overly complicated and said it was the largest expansion of the program in its 40-year history, the Journal News of White Plains, N.Y., reported. He told a crowd of supporters, "I think most of us would agree with the Princeton professor who said maybe we shouldn't let people who don't believe in government design programs."

Meanwhile, owners of independent pharmacies say Part D hurts their businesses because drug reimbursements are low and payments are delayed.

“Medicare Part D pays me, at most, $5 above the cost of a patient's medication,” said Jennifer Rich, owner of Jennifer's Pharmacy in Clayton, Mo. “With that $5, I'm expected to pay my costs and overhead, including salaries. Of course, it doesn't cut it," she told the St. Louis Business Journal.

Tom Hunt, owner of Lindenwood Drugs in southwest St. Louis city, told the newspaper that he began submitting Part D drug claims in January but wasn't reimbursed until late March or early April. "It doubled my receivables for the first part of the year."

Bush administration estimates say 6 million Medicare beneficiaries have no prescription drug coverage. The estimates also say that about 10 million people now have drug coverage who did not have it last year, the AP reported.

Jeff Hall, spokesman for the Centers for Medicare & Medicaid Services, told the Journal News, "Is it perfect? No, but for millions of people who did not have prescription coverage it is a godsend."

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