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WYDEN, SNOWE
URGE HHS SECRETARY LEAVITT TO SUPPORT
EXTENSION OF MEDICARE DRUG BENEFIT DEADLINE
WITHOUT PENALTY
Senators Send Letter to Secretary Today;
Deadline for Seniors to Sign Up for Part D is Set for May 15th,
Just Over a Month Away
April 4, 2006
Washington, DC – Today, U.S.
Senators Ron Wyden (D-OR) and Olympia J. Snowe (R-ME), both members
of the Senate Finance Committee, urged Health and Human Services
(HHS) Secretary Michael Leavitt to support an extension without
penalty of the enrollment period for those seniors signing up
for the Medicare Drug Benefit through December 31st of this year.
The Senators are concerned that without an extension, the cost
to seniors could be devastating, leading many to not sign up for
the benefit and undermining the program as it gets off the ground.
The deadline for signing up is May 15th.
“It’s time to get the
drug benefit on track,” said Wyden. “The Administration
needs to step up and make the benefit work for seniors, instead
of trying to earn a buck off of seniors. By extending the deadline,
we can ensure that seniors have the chance to get more affordable
access to prescription drugs.”
“If this Medicare drug benefit
is to meet its goal of helping our nation’s seniors, then
it only makes sense to extend the deadline through December 31st
without a penalty,” said Snowe. “The potential impact
of inaction could be great. We need to ensure that as many seniors
sign up for this program as possible – that would lead to
a stronger, healthier benefit with a bright future. I know that
the Administration wants to ensure that this program is an overwhelming
success – as I do – but unless we take some common-sense
steps like extending the deadline, the public’s confidence
in the program could be disastrously undermined.”
The Senators note that while the
Congressional Budget Office (CBO) estimates that the cost of extending
the enrollment period without penalty through December 31 will
reach $3.4 billion over ten years, this primarily represents lost
revenues to the federal government from seniors having to pay
late enrollment penalties.
CBO also reported that extending enrollment would shift the current
risk pool from a relatively high risk to a lower risk profile,
as an additional estimated 1.1 million lower risk individuals
enroll. This helps avoid adverse selection, and ensures the sustainability
of Part D.
The following is the full text
of the letter Snowe and Wyden sent to Secretary Leavitt today:
The Honorable Michael Leavitt
Secretary
U.S. Department of Health & Human Services
200 Independence Avenue, S.W.
Washington, D.C. 20201
Dear Secretary Leavitt:
We are writing to express our concern
regarding the imminent deadline for Medicare Part D enrollment
which confronts America’s seniors. As you know, beneficiaries
who enroll after May 15, 2006 face a penalty of one percent per
month in the cost of their monthly Part D premiums.
We are pleased to see so many benefit
from assistance with the high cost of medications. Making a prudent
enrollment choice takes time, and it is clear that the implementation
of the Part D benefit relied upon resources which seniors either
do not have, or are reluctant to use. Beneficiaries predominately
require personal assistance requiring more time and resources
than can be offered by May 15. It is unfair that seniors should
be penalized for the complexities and problems which have plagued
the implementation.
Maintaining the existing deadline
would impose a great cost on our seniors. The Congressional Budget
Office estimates the cost of extending enrollment without penalty
through December 31 will reach $3.4 billion over ten years. This
primarily represents lost revenues from the permanent penalties
which would otherwise be imposed upon America’s seniors.
Many seniors who fail to enroll by May 15 will question whether
the complexity of this program was designed to their detriment,
when they find themselves ensnared in late enrollment penalties
for life. The finding that the generation of substantial late
enrollment revenues from seniors appears to be a part of the HHS
budget forecast is troubling indeed. Part D was designed to help
Medicare beneficiaries, not generate budget revenues through such
penalties.
An unreasonable deadline has another cost as well. CBO has told
us that extending enrollment would shift the current risk pool
from a relatively high risk to a lower risk profile, as an additional
estimated 1.1 million lower risk individuals enroll. This helps
avoid adverse selection, and ensures the sustainability of Part
D. That sustainability is crucial, and broad participation by
seniors is essential to both realize the great potential of a
prescription drug benefit and to maintain fiscal responsibility.
While a deadline for enrollment
is necessary, it must be a realistic one. We urge the Administration
to support an extension of the enrollment period without penalty
through December 31.
Sincerely,
OLYMPIA J. SNOWE RON WYDEN
United States Senator United States Senator
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