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NY Consumer Group Challenges Medicare Enrollment Numbers

Philadelphia Seniors Sue to Stop "Passive Enrollment"

February 21, 2006

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An analysis of the Medicare drug benefit enrollment numbers being touted by the Bush Administration reveals that only 3.2 million older and disabled Americans have drug coverage for the first time, according to the Medicare Rights Center.

Meanwhile, a seniors' group in Philadelphia has filed a class action lawsuit challenging the procedure by which Pennsylvania residents eligible for both Medicare and Medicaid were enrolled in Medicare HMOs.

As many as 19 million people around the country have yet to sign up for the drug benefit available through private drug plans, and at least 7.5 million of these older and disabled Americans have no drug coverage at all, the Medicare Rights Center said.

"The Bush Administration's inflation of enrollment numbers disguises the problems that plague this privately-administered drug benefit," said Robert M. Hayes, the organization's president.

"Deception will do nothing to help older and disabled get the medications they desperately need," Hayes said.

The Bush Administration reports that 24 million people have the Medicare drug benefit, but the consumer group's analysis shows that only 14.3 have it. About 10 million people reported to have Part D coverage actually have retiree health benefits from their former employer or union.

Most people with the drug benefit known as "Part D" were auto-enrolled because they have both Medicaid and Medicare (6.2 million), or were in a Medicare private health plan (4.5 million), from which they got some drug coverage.

Of the 3.6 million people who reportedly "voluntarily" enrolled in a stand-alone private drug plan, about 330,000 were enrolled through their state pharmaceutical assistance program and another 78,000 are covered by employers who transformed their employer coverage to a Part D plan.

The full text of the Medicare Rights Center's analysis of the drug benefit enrollment numbers, is available online at http://www.medicarerights.org/policy_enrollment_brief022006.pdf.

Lawsuit Challenges Procedure

The Pennsylvania class action challanges the Center for Medicare and Medicaid Services' (CMS) "passive enrollment" of 110,000 dual eligibles in Pennsylvania into Medicare HMOs.

CMS allowed 6 insurance companies which run both Medicaid and Medicare HMOs in the same area to send notices last October to duals who were in their Medicaid HMOs and who had original (fee-for-service) Medicare, telling them that they would be enrolled in that company's Medicare HMO effective January 1, 2006 unless they contacted the company by the end of October to say that they did not want to be enrolled.

The notices were confusing to many seniors, and when consumers called the insurance companies to say that they did not want to join the HMO, many of them were misled or subjected to an aggressive sales pitch, the suit charges.

"Passive enrollment has caused many people to have difficulty obtaining access to their health care providers, because they're not in the patient's new HMO's network," said Pedro Rodriguez of the Action Alliance of Senior Citizens of Greater Philadelphia.

"There have also been a number of problems getting medications, despite the fact that the HMOs promised to pay for all of the medications the members received while in the Medicaid HMO," Rodriguez said.

The suit charges that CMS had no legal authority to implement passive enrollment.

The lawyers have obtained documents in discovery which show that CMS decided to approve passive enrollment after getting lots of pressure from the managed care companies to do so, Rodriguez said.

A hearing on a request for a preliminary injunction is scheduled for March 7.

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