Study says Medicare drug plan saves cash

The much-criticized Medicare drug benefit program that began last year has enrolled the vast majority of eligible people in Massachusetts, and saved the state more money -- about $76 million -- than planners predicted, according to a study being released today.

But even though nearly 800,000 state residents are participating in Medicare "Part D," another 125,000 who get Medicare still aren't signed up, and thousands of those who are enrolled qualify for low-income subsidies that they haven't received, according to the study by Massachusetts Health Pol icy Forum and Massachusetts Medicaid Policy Institute, two nonpartisan think tanks.

The report gives the Medicare drug plan mixed grades. While many seniors have benefited, the report says the program is too complicated and beneficiaries have to re evalute their drug coverage every year to ensure they're in the right plan.

"We really see a lot of people who aren't enrolled and who aren't receiving their low-income subsidies," said Cindy Parks Thomas , co author of the report and senior scientist at the Schneider Institutes for Health Policy at Brandeis University. "These people might just be the worst anecdotes, or they could be the tip of the iceberg."

The federal Medicare drug plan that was enacted into law in 2003 and went into effect in January 2006 is one of President George W. Bush's most significant domestic initiatives. But the plan has been criticized from the start by healthcare advocates because it relies on insurers and pharmacy benefit companies to deliver drugs to seniors. The result has been dozens of competing plans in each state, each with its own set of coverage rules. Choosing plans has been laborious even for computer-savvy seniors.

The report said a state law providing seniors with emergency drug supplies when there are problems confirming beneficiaries' coverage was crucial.

"Legislation creating an emergency safety net was critical to maintain access for beneficiaries during the initial transition to Part D," the report says.

The report also highlights other persistent problems with the plan, including:

Errors deducting premiums from Social Security payments of seniors.

The lack of coverage for name-brand drugs for beneficiaries who fall into the "doughnut hole," -- or the gap in which some beneficiaries must pay all of their drug costs out of pocket.

Price increases imposed by some drug plans.

Some companies that provide prescription drug coverage to retirees are eliminating the benefit, shifting the burden to Medicare and taxpayers.

A panel will discuss the study this morning at a breakfast meeting arranged by the health policy groups. In notes prepared for the discussion, the local Medicare chief, Dr. Charlotte Yeh, said that 80 percent of Part D beneficiaries are satisfied with their current drug coverage, and the number of seniors who cut pills in half and take lower dosages to make drugs supplies last longer has declined.

Yeh, regional administrator for the Centers for Medicare and Medicaid Services, will also say that Medicare needs to improve its computer systems, and is working cooperatively with state insurance regulators to ensure the health insurers follow the rules. She also acknowledges that Medicare must keep reaching out to seniors who qualify for low-income aid.

Robert Hayes , president of the Medicare Rights Center, an advocacy group, said the failure to get low-income seniors into subsidized coverage is the biggest failing of Medicare Part D.

"We're not serving the people who need the benefit the most," said Hayes. "There should be automatic enrollment of people who the government already knows are poor enough to qualify for the program."

The report said the experience rolling out the Medicare drug benefit offers lessons for state officials implementing the law that would extend healthcare insurance to all Massachusetts residents. The same problems that have plagued the Part D program could create problems for healthcare reform.

In particular, the report said the state should test its computer systems before the reform law is fully implemented; extend the transition period to maximize enrollment; and pay attention to low-income residents and minorities to ensure that as many people enroll as possible.

Jeffrey Krasner can be reached at krasner@globe.com.