Despite Outreach, Poor Seniors Miss Out On Low-Cost Coverage

A $400 million campaign by the Bush administration to enroll low-income seniors in prescription drug coverage that would cost them just a few dollars per prescription has signed up 1.4 million people, a fraction of the 8 million eligible for the new coverage.

At this rate, by some calculations, the government is on track to spend about $250 for each person it enrolls, and even then it would have only 2 million poor senior citizens taking advantage of what is perhaps the most generous government benefit available today.

"It's a very, very good benefit," said Deane Beebe, whose organization, the Medicare Rights Center, has been critical of many aspects of the new Medicare drug program, called Part D. "It's probably the best thing about Medicare Part D, except that most people don't know about it or don't know how to apply for it or are not comfortable or capable of applying."

When Congress enacted the first-ever drug plan for Medicare's 42 million beneficiaries, it created a tiered system in which the poorest and sickest seniors pay the least. About 6 million elderly and disabled people were switched from state Medicaid programs to virtually free Medicare coverage. Retirees at the high end of the income scale have the option of purchasing a plan with standard out-of-pocket costs such as monthly premiums, deductibles and co-payments.

The group sandwiched in between -- those earning too much for Medicaid but less than $19,000 -- qualify for coverage with no premiums, no deductibles and co-payments of less than $5. Congress gave the Social Security Administration $500 million primarily to identify and enroll them.

But as in earlier efforts to register low-income Americans in programs such as food stamps or children's health insurance, officials have encountered myriad challenges. The group of seniors eligible for the subsidies dubbed "extra help" tend to move often, may not speak English, sometimes suffer from mental impairments or do not want what they perceive to be a government handout.

Across the nation, the administration has turned to hundreds of community groups to help sign people up. At the Educational Organization for United Latin Americans in the District's Adams Morgan neighborhood, Mirian Barrios brings clients to her computer and makes her pitch, usually in Spanish. Explaining the program, collecting financial data for the application and finally choosing a drug plan often takes four one-on-one meetings, she said.

"I have more trouble signing people up for the extra help," Barrios said. "They don't want to release information like their bank statements or they are afraid they will lose some of the benefits they already have."

Digna Tate, a 72-year-old Cuban American who speaks English and has been in the United States for decades, said she was intimidated by the whole process. "If it weren't for Mirian, I wouldn't have the Medicare plan," she said, after eating lunch at the center.

Even Medicare chief Mark McClellan acknowledged that it is difficult marketing to this skeptical group. "Some people think it's too good to be true," he said in an interview.

The task has proved to be so daunting for the Social Security Administration (SSA) that one high-ranking official wrote a desperate e-mail this month describing overwhelmed telephone lines, heavy backlogs, and visits to field offices that jumped from 140,000 people a day in the fall to 200,000 in January.

"Those of you on the front line have been expressing your deep concern that SSA is not positioned well to help people understand, enroll in and negotiate" the discount drug program, wrote Linda McMahon, deputy commissioner of operations. "Now we are seeing the consequences of that fact.

"It's not a rosy picture, and the news doesn't get better," she continued, warning that other projects, such as processing disability reviews, will be cut back as a result. "I won't try to kid you. This is going to be a very difficult year."

Social Security spokesman Mark Hinkle verified the authenticity of McMahon's e-mail but said it was a broader assessment of budgetary pressures. He characterized the Medicare difficulties as a "blip on the screen."

Not all of the $400 million spent by Social Security has been for the subsidized program, said Beatrice Disman, who is overseeing the agency's Medicare task force. Social Security has helped enroll some Pentagon retirees and had to devise a new computer system for deducting the Medicare premiums of wealthy retirees from their monthly Social Security checks. But the agency's primary assignment has been implementing the drug coverage for poor seniors.

For that, the agency bought computer systems, hired 2,500 employees, participated in 65,000 informational meetings and sent at least one letter to each of 19 million retirees who might qualify for the subsidized coverage. The goal, said Hinkle, was to cast as wide a net as possible.

The trouble is, said James Firman, president of the National Council on the Aging, it looks as though that net pulled in so many ineligible people that Social Security spent an enormous amount of time and money to process them. It has rejected close to 70 percent of applicants.

"The real problem is that 2 million to 3 million people that responded weren't eligible," Firman said. Social Security "probably spent $50 on each doing the proper follow-up," he added. "That's a very expensive mistake, especially when you think about the backlog."

The council provided a report to Social Security last spring outlining a recruitment strategy that Firman said would have enrolled millions more seniors and cost about $100 per person. They key involves using "trusted intermediaries," such as volunteers at community centers, to work individually with each client, he said. Mass mailings, group meetings and advertising are insufficient when dealing with a hard-to-reach population and an application that involves supplying both income and asset data, Firman said.

More than half of the applications were rejected because a person had more than $11,500 in assets, not including a primary home or car, Hinkle said.

"People get confused about reporting their assets," said Tom Paul, who is overseeing Medicare enrollment at UnitedHealth Group. "Not everyone knows the face value of their life insurance policy."

Despite the difficulties, several insurers are hoping they may be more successful than the government, said Reed V. Tuckson, a senior vice president at UnitedHealth Group. Legitimate criticism of the program, however, should not prevent low-income seniors from enrolling in what is virtually free drug coverage, he said. "If what gets lost is [getting] people enrolled, that would be a terrible outcome."