GOP Consider Removing Penalty for Missing Medicare Drug Deadline

Under election-year pressure, congressional Republicans are considering elimination of the financial penalty for seniors who miss a May 15 enrollment deadline under the new Medicare prescription drug program.

The deadline itself would remain in effect, officials familiar with the discussions said Friday, meaning that most eligible seniors who do not sign up by May 15 would have to wait until Nov. 15 before they could do so.

However, a penalty equal to 1 percent of premium costs per month would be waived once enrollment reopened.

The drug program is voluntary, and individuals who never enroll would not incur a penalty.

Several lawmakers as well as aides declined to discuss potential changes, saying they did not want to discourage enrollment over the next three weeks by any of the estimated seven or eight million seniors who lack coverage. Administration officials have said as many as 400,000 a week have been signing up as the deadline approaches. "The deadline serves a valuable purpose in motivating people to pay attention," Kathleen Harrington, an official at the federal Center for Medicare and Medicaid Services, said earlier this week.

At the same time, Sen. Jon Kyl, R-Ariz., said he was "in favor of doing something" to help those who miss the deadline. He said he was concerned that the penalty becomes stiffer the longer a senior waits to enroll. "At some point, it becomes a disincentive" to enrollment, he said.

In the House, Republican Reps. Jeb Bradley of New Hampshire and Jim Gerlach of Pennsylvania support legislation to push back the penalty until Jan. 1, 2007. Bradley earlier introduced a bill to change the deadline but conceded this week that is unlikely. "We should at least waive the late enrollment penalty," he said, citing confusion expressed by some seniors about enrollment.

Elimination of the penalty would mark another in a series of gestures aimed at answering Democratic critics and easing the concerns of Republican lawmakers headed into a difficult campaign.

Mark McClellan, head of the Centers for Medicare and Medicaid Services, has said he expects there will be fewer drug plans for consumers to choose from next year. Even Republican supporters of the program have expressed sympathy with seniors who complain about a bewildering number of choices they now confront.

On a second issue, CMS announced earlier this week that drug plans seeking to stop covering certain drugs would generally have to wait until the end of the year. That would allow those enrolled to shop for an alternative plan beginning Nov. 15 while retaining coverage they currently have.

The drug program was born in political controversy and remains at the center of partisan conflict. Republicans say it provides a benefit that seniors long lacked and sought: lower-cost prescriptions. Democrats argue the program benefits the drug and insurance industries to the detriment of older Americans.

House Democrats, in particular, have said they intend to make an issue of the program in this fall's midterm elections. At the same time, some members of the rank and file have tried to straddle the issue — telling their constituents why they voted against it, while encouraging them to sign up if it would benefit them.

Public sentiment was pessimistic when the drug program began earlier this year, as beneficiaries and pharmacists complained about improper denials of coverage, computers programmed with incorrect enrollment information, and telephone help lines that rang interminably without answer.

More recently, polls have shown seniors responding favorably once in the program.

The most recent government figures show 30 million seniors have drug coverage under Medicare, including 8.1 million who signed up for the new stand-alone plan. An additional 5.8 million have benefits from other sources, including the Veterans Administration.

Some of those who lack coverage are low-income people who qualify for large government subsidies but are particularly difficult to bring into the system. Others presumably are not interested in purchasing coverage.

Congressional aides said that most seniors who are eligible for coverage and do not enroll until after May 15 will be required to pay a penalty equal to 1 percent of the average statewide premium, multiplied by the number of months they wait. They said proceeds would go to the government rather than insurance companies.