Apr 3, 2006- Kaptur Issues Letter to HHS Secretary Leavitt

June 12, 2007
Press Release
April 3, 2006

The Honorable Michael Leavitt, Secretary
U.S. Department of Health & Human Services
200 Independence Avenue SW
Washington, DC 20201

Dear Secretary Leavitt:

Thank you for coming to our region to view first hand the implementation of the Bush Administration's Part D drug plan for people on Medicare. Taking the time to listen to people's concerns and working with Congress to achieve legislative and regulatory remedies to address the program's shortcomings can benefit Americans.

Reduce Costs Through Bulk Purchasing Agreements

Importantly, I urge you to join Members of Congress in supporting legislation to allow the Centers for Medicare and Medicaid Services to negotiate purchase price of pharmaceuticals and allow bulk purchase agreements to hold down prices to consumers. The rising costs of pharmaceuticals to consumers since the passage of this law demonstrates that much more must be done to achieve affordable prescription drugs for beneficiaries while controlling federal spending.

Standardize Plans

Until laws are able to be changed to provide an affordable, predictable Medicare Part D Rx benefit for all people who are eligible, streamline the confusing array of private plans by limiting their total number to ten, as we have accomplished with Medicare supplementary plans, this would greatly aid those trying to determine which PDP is best for them.

Ban Gifts

As you know, eight million people who were deemed as "dual eligible" and enrolled in both Medicare and Medicaid were required to sign up before January 1, 2006. They, along with people enrolled in a Medicare Advantage plan or whose employer-sponsored plan ceased coverage, comprise the bulk of people who have signed up. This most vulnerable group of people continues to have difficulty with plans in which they were enrolled and are prey to confusing solicitations from the private drug plan operators. Please let me suggest HHS should develop regulations limiting the way in which these companies can solicit. Full and clear disclosure should be required of what sign up in the PDP will mean for that individual. Such lures as taking people out to dinner, coming to their home, and gifts should be prohibited. Perhaps rules could be established like those put in place for Medicare supplemental insurance coverage solicitation.

Extend Deadline

Given the considerable difficulties people have had in trying to learn the details of the plan and the lack of information provided about the PDPs for which they might sign up, extending the deadline to sign up without penalty would help ensure that people to not rush to choose a PDP before the agency works out all of the program's problems.

Disclose Coverage Gaps in PDPs

Companies which do not offer gap coverage, such as AARP, should be required to make this fact very clear in writing. It should be clearly and simply stated what drugs are covered, what dosages of the drugs are covered, what is the true cost to the consumer, and whether the full cost of the drug or the consumer's out of pocket expense is the figure used in reaching the $2,250. It should also be stated clearly and boldly that the PDP may drop a drug from coverage, the terms under which the drug will be dropped, and what options exist for the consumer if the drug is dropped. Our office is already hearing from people who are nearing their $2,250 because the full cost of the drug is used though this fact was never explained to them. We are also hearing from people already getting letters-three months into the program-that drugs are being dropped, and these PDPs are not giving a sixty day notice.

Require Uniform ID Numbers

Many of the problems people have been experiencing when going to a pharmacy are the result of a multiplicity of ID numbers. There is no uniformity or conformity of a number the PDPs are using. Requiring all PDPs to use a person's Medicare ID number would be helpful. This requirement simplifies tracking for the pharmacist, ensures the enrollee knows the number, and makes it clear which number on the PDP card is the ID number. It also simplifies enrollment verification for SSA and Medicare.

Simplify Application

There continues to be a disconnect between agencies and PDP companies. SSA, Medicare, and state and county public assistance agencies need to be interconnected with each other and with the PDP companies through the use of one central application. Related to this problem is the flow of information between Medicare, SSA and county public assistance agencies which results in confusion about the program itself and subsidies to which people may be entitled. Perhaps the greatest barrier to people who are dual eligibles successfully transitioning to the PDPs is this lack of coordinated information. We would ask HHS to take a vested interest in ensuring the interconnectedness of all agencies involved and ensure that it occurs.

Expand Extra Help Eligibility

The other group of vulnerable people requiring attention are those whose income qualifies them for Extra Help but whose other resources disqualify them. You may know that 4.5 million people have -applied for Extra Help but only 1.5 million have qualified. HHS' own figures estimated that five million people were eligible for Extra Help. Generally, people whose incomes qualify them do not have much more than the assets allowed and if they do, these assets are not very liquid. Thus, a more realistic resource test should be developed. An alternative to be considered could be along the lines of the community spouse resource test used when one partner of a couple enrolls in Medicaid while in long term care. Or guidelines could be developed more in line with real-life expectations of the financial cushions people try to keep in place in the event of a catastrophic illness, death of a spouse, or protection against income reductions in older age.

Require Comparison of PDP To Existing Health Plan

People who have good existing drug coverage are being told they can sign up for a PDP and still retain their existing health benefits, such as people in the public employee retirement system and unions or employer-sponsored plans. As a result, people are signing up for a PDP and then losing their full health coverage. We would appreciate a written explanation from HHS as to how the PDP benefits interact with existing health coverage, and the consequences to that health coverage of signing up for a PDP.

Broaden Formularies of PDPs

You have replied to the issue of formularies in response to a previous inquiry from me. I will ask again that this issue be examined so that the PDPs offer broader formularies and do not restrict based on the dosage of a medicine. Particularly in the area of mental illness treatment, people are being forced to go without the vital medicine they can no longer afford. While Medicaid will assist those who are dual eligibles, those who are not-such as people enrolled in a Medicare Advantage plan-find they must pay the full cost of their medicine or go without. For most it is no choice, and they are forced to go without.

Expand Resources To Counseling Agencies

Finally, and importantly, agencies providing counseling to people trying to understand the program must be appropriately supported. Already stretched budgets are stretched beyond capacity as these agencies help people. In our own region, the Area Office on Aging and the Ability Center of Greater Toledo have fielded inquiries and spent two hours per person for thousands of people. This burden must be properly compensated by HHS.

Thank you for your attention to these issues. I look forward to your reply, which I will share with our community and the agencies serving people on Medicare.

Sincerely,
Marcy Kaptur
U.S. Representative