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Bush Relents Slightly on Medicare Drug Plan Deadline

by Jessica Azulay

May 10, 2006 – With millions of eligible seniors not signed up for Medicare’s new prescription drug coverage, the Bush administration is backing off a bit on next week’s deadline for lowest-income seniors.

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While some scramble to wade through the complex sign-up process and the White House makes a final push to convince people to join, advocacy groups are raising calls for a continuance.

Most seniors who do not join by next Monday’s deadline will face penalties if they ever do join the program – a premium tacked onto their monthly bill of one percent for each month they wait. For instance, if an individual waits seven months to sign up, they will pay a 7 percent monthly premium for the duration of their enrollment in the plan.

The administration has said the penalties act as an incentive to get people to sign up. Touring Florida in a last-minute push to get seniors on board, Bush said the May 15 deadline was "important" because "deadlines help people understand there's finality and people need to get after it."

Sunday, several hundred protesters from all over the nation descended on the Virginia home of Health and Human Services Secretary Michael Leavitt to demand a deadline extension. Leavitt was not there. The demonstration was organized by National People’s Action, a coalition of community organizations.

Under intense pressure from advocacy groups and some members of Congress, the administration clarified yesterday that very low-income seniors eligible for special subsidies under Medicare Part D would not be held to next week’s deadline, though a spokesperson for the Department of Health and Human Services suggested it was a conveniently pragmatic decision.

Most seniors who do not join by next Monday’s deadline will face penalties if they ever do join the program.

"It would cost more to collect it than it would be to actually have the value of that penalty collected," Julie Goon, senior advisor to Health and Human Services Secretary Leavitt, explained to White House reporters yesterday. "So for low-income people, they're not going to have to worry about the May 15th deadline, and they're not going to have to worry about paying a penalty if they don't get enrolled right away." That exception applies to people with annual incomes below $15,000, she said.

According to a report released yesterday by the national healthcare-consumer advocate Families USA, only 24 percent of the 7.2 low-income seniors eligible for the subsidy had enrolled by the end of April.

Meanwhile, opponents of the Medicare bill are keeping up the heat. Today groups plan to take their protest to Capitol Hill. The Campaign for America’s Future, a liberal advocacy organization, expects hundreds of seniors and dozens of lawmakers to rally in the Russell Senate Office Building.

While calling for a deadline extension, the Campaign for America’s Future has also said the Medicare drug plan should be reworked.

"The simplest way to reduce the cost of prescription drugs would've been to require Medicare to negotiate lower prices from drug companies like the Veterans Administration does for veterans, and by allowing seniors to choose their drug plan directly from Medicare, instead of from a private insurance company," said Campaign co-director Roger Hickey in a March statement announcing a multi-organizational push to reform the Medicare Modernization Act. "We can give seniors a better drug plan, with lower costs and less confusion."

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The NewStandard ceased publishing on April 27, 2007.


This News Report originally appeared in the May 10, 2006 edition of The NewStandard.
Jessica Azulay is a staff journalist.

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