POLICY/PHARMA: Part D–Lying with numbers

The filthy commies at the Wall Street Journal are out doing themselves this week. Not only attacking Bill McGuire for being a(little bit too) successful capitalist, but now attacking our beloved government on the way it counts Medicare Part D enrollment. And boy is that 30 million number convoluted. Here’s the WSJ article basically in full liberated from behind their firewall. You may note that it’s basically what I, Kate and the rest of the gang over at TPMCafe’s Drug Bill Debacle blog, Joe Paduda and others have been saying for months—voluntary enrollment in this plan is low, and may be too low for it to avoid adverse selection. Read on to figure out how and why

Are Medicare Estimates Too High?Government Says 30 MillionAre Enrolled in the ProgramBy SARAH LUECKApril 21, 2006

At first glance, information released Thursday by Medicare seems to indicate that 30 million people are getting prescription-drug insurance from the federal health program for the elderly and disabled.

Not exactly.

Despite the headline on a government press release — “30 million Medicare beneficiaries now receiving prescription drug coverage” — a smaller number is actually enrolled in the new program, and some of that group had coverage before. As of April 18, 19.7 million beneficiaries are getting drug insurance from Medicare. Of that group, 5.8 million already had coverage from Medicaid, the state-federal program for the poor. An additional 6.8 million people are getting drug coverage from former employers; the coverage is partially subsidized by Medicare. That means a total of 26.5 million people now are benefiting from the Medicare drug program.

To get to 30 million, government officials also counted 3.5 million people who have drug coverage from the military’s TRICARE program or federal-employee benefits, but aren’t signed up for the Medicare benefit. Christina Pearson, a spokeswoman for the Department of Health and Human Services, says the Medicare beneficiaries, regardless of source of coverage, “were able to make the choice that works best for them” because of the new drug-benefit program.

To judge the progress of the enrollment effort, it’s important to account for Medicare beneficiaries who have drug coverage from other sources because they aren’t likely to sign up for the new program. In addition to the 3.5 million Tricare and federal government retirees, an estimated 5.8 million Medicare-eligible people get drug access through the Veterans Administration, their current employers or companies not taking a Medicare subsidy.

When people with other sources of coverage are added to people signed up for Medicare drug plans, about six million people remain, and presumably don’t have drug coverage. This group is the target of the massive campaign by the government, insurance companies and consumer groups to maximize enrollment by May 15.

The Medicare drug benefit has become a political issue, with Democrats criticizing it as too confusing for many seniors. Enrollment numbers, too, have become a flashpoint, with Bush administration officials saying they have “passed their projections,” as Health and Human Services Secretary Michael Leavitt said Thursday. A critic of the drug benefit, Medicare Rights Center President Robert M. Hayes countered, “Every few weeks the administration lowers its standard for success.”

Ms. Pearson, the HHS spokeswoman, said that’s not true. “We’ve consistently said our goal was 28 to 30 million,” she said. “And by any measure we’ve surpassed that goal.”

In fact, Mr. Leavitt and Medicare chief Mark McClellan, have used that estimate since last year, citing Wall Street analysts. A higher projection by Medicare actuaries, of 39 million, was published in the Federal Register in Jan. 2005. That, too, included retiree plans. Now, the actuaries’ projection is lower, at 37 million as of February. Medicare has not yet said why.

Dan Mendelson, president of Avalere Health LLC, a Washington-based consulting firm, and a former Clinton administration official, said the numbers are consistent with what he had expected. “I think they’ll pick up another group of enrollees before the deadline, maybe a million. Then everyone will squabble over whether it’s a big number of a small number.”

At the recent WHCC congress an audience member (well, as I had control of the question device I’d better admit that it was me) asked this question of Abby Block, the person at CMS who runs the program. Here’s the take from my post earlier this week.

There’s more than a little obfuscation about these numbers, especially the 29 million number. How many people over 65 now have drug coverage who did NOT have it before? Abby: that number cannot be determined! We know how many have enrolled but we don’t know what they had before

So rationally we know that only a maximum of 7 million people could have new coverage, and of course some of those had coverage anyway before even if it wasn’t as good. So as the bill is supposed to cost $900 billion over 9 years or whatever tehe final estimate was, we’re spending some undisclosed number north of $100 billion a year, to get drug coverage to less than 7m million people! This to me sounds damn expensive. Then of course cynics can note that not all that money is going to the patients. A few other people are getting their palms greased in the process. Another article in the WSJ today (this one’s free) points that out pretty clearly….and you know who they are!