Senators Want to Waive Fee for Late Medicare Drug Plan Enrollment

WASHINGTON – Elderly and disabled people who missed the deadline to enroll for the new Medicare drug benefit would not pay a penalty if they signed up later this year under legislation that Senate sponsors predicted would gain swift approval.

The deadline for signing up for Medicare drug coverage this year ended at midnight Monday.

Now that the deadline has passed, more Republican lawmakers are willing to go public with their opposition to penalizing those who decided to wait.

Click here for more information about the Medicare drug benefit.

Sen. Charles Grassley, R-Iowa, chairman of the Senate Finance Committee, said that waiving the penalty would encourage more Medicare beneficiaries to enroll in the program. He said that he would try to get the Senate to take up the measure within days.

However, the Bush administration responded to the bill by calling for patience from lawmakers until final enrollment numbers are determined.

"We don't have complete information yet," said Mike Leavitt, secretary of Health and Human Services.

That did not stop Leavitt from declaring enrollment efforts a success. He predicted the final days of the sign-up period would mean that about 38 million beneficiaries out of nearly 43 million would have some prescription drug coverage this year, either through Medicare, their employer or through another government program.

"This was a remarkable American moment, a de Tocqueville moment," Leavitt said.

Mark McClellan, administrator for the Centers for Medicare and Medicaid Services, said about 872,000 enrollments were processed in the final week of the sign-up period, and those numbers did not include the surge in the final 72 hours. He said that 143,000 people tried to enroll through the Internet on Monday alone.

Operators took calls from more than 640,000 people that day, he said. Those callers experienced an average wait time of about 12 minutes and 30 seconds before they could get through.

Among those who declined to enroll are an estimated 3 million who would qualify for extra help because of their income. The administration has already exempted them from the enrollment deadline as well as the late-enrollment penalty. That would leave at least 1.5 million people who would be subject to the penalty.

Sen. Max Baucus, D-Mont., said senior citizens had so many choices when it came to private plans offering drug coverage that some were reluctant to make a choice that could have been a bad one.

"Whatever the reason, I believe it's time to cut seniors a little slack," Baucus said.

Now that the first open enrollment period for the drug benefit has expired, beneficiaries -- with the exception of low-income people eligible for extra help -- cannot enroll in a plan until Nov. 15. Once their coverage began next Jan. 1, they would have to pay higher monthly premiums as a penalty for not enrolling earlier. The penalty equals 1 percent of the national average premium for each month of delay, or an additional fee of about $2.50 per month.

"I'll take anything I can get, and eliminating a 7 percent penalty on senior citizens' premium payments, that is not just for one year but that is forever, is clearly in the interest of our senior citizens," said Sen. Bill Nelson, D-Fla.

The senators who called for doing away with the late enrollment penalty said it would reduce payments to the government by about $1.7 billion over five years. They would make up for that loss by reducing the amount of money placed in a fund that encourages insurers' to participate in managed care for seniors. Some lawmakers argue that payments to the insurers are already more than adequate, and they would not be harmed through a reduction in the fund.

McClellan, however, voiced reluctance to that proposal. He said insurers participating in Medicare Advantage next year would see a smaller increase in their reimbursement rates, and "it doesn't seem like a good time to tighten down further."

The bill in the Senate would provide an additional $18 million for the Senior Health Insurance Assistance Program and Area Agencies on Aging. Lawmakers say both programs will play a crucial role in recruiting more low-income seniors to the drug benefit.