SeniorCare enrollees face costlier program
March 13, 2011- Gov. Scott Walker's proposed two-year budget would effectively end the state's SeniorCare prescription drug program in its current form, forcing tens of thousands of people to enroll in more-expensive private plans available through Medicare Part D.
The SeniorCare program, introduced in 2001, provides low-cost prescription drug coverage to low-income people over 65. About 91,000 people are in the program, and for most of them, switching to private coverage could cost hundreds of dollars more per year.
"Most people now in SeniorCare will not be better off in Medicare Part D," said John Hendrick, governmental affairs director for the Coalition of Wisconsin Aging Groups.
The least expensive prescription drug plan through Medicare Part D in Wisconsin this year costs $177.60 and has a $310 annual deductible as well as co-pays. Most cost more: The average plan costs $43.96 a month, or $527 a year, based on estimated enrollment, according to the Kaiser Family Foundation.
In contrast, almost 40,000 of the people in the SeniorCare program – those with household incomes below $17,424 for one person and $23,536 for two people – pay only a $5 co-pay for generic drugs and $15 for branded drugs, plus a $30 annual enrollment fee.
The governor's budget proposal would require people to enroll in a Medicare Part D plan offered by private companies and would limit SeniorCare to providing supplemental coverage.
The administration has said that people won't see any change in benefits – a contention that advocates for seniors challenge.
"It is deceptive to our consumers to say that their benefits aren't going to change," Hendrick said. "They are going to see a lot of change."
The Walker administration estimates that its proposal will save the state $15 million in the next two-year budget. But the savings could be much higher if few people opt to remain in SeniorCare after being forced to enroll in a Medicare Part D prescription drug plan.
"It's such a substantial change in the program that enrollment will be substantially reduced," Hendrick said.
The SeniorCare program is supported by state and federal dollars, rebates from drug manufacturers and the $30-a-year enrollment fee.
The state budgeted $28.4 million for the program in fiscal 2010 and $33.1 million in fiscal 2011. The actual cost has turned out to be less, so the program has a roughly $20 million two-year surplus.
The proposed change could mean $100 million in additional revenue for the private companies that sell prescription drug plans in Wisconsin. That estimate is based on the average premium and Medicare's projected payments to the companies. Only a fraction of the revenue would become profits.
Dennis Smith, the secretary of the Department of Health Services, said people with limited incomes would save money by enrolling in Medicare Part D because they would be eligible for subsidized coverage.
Those subsidies, however, are limited to people who have almost no savings: individuals with incomes of less than $16,335 a year and less than $12,510 in savings.
A person with an income of $12,000 a year – but $15,000 in savings meant to last the rest of his or her life – would not be eligible for a subsidy.
"You really have to have almost zero assets to qualify," Hendrick said.
Under Walker's proposal, SeniorCare would continue to provide supplemental coverage for people who reach the Medicare Part D "doughnut hole" – costs between the initial coverage limit of $2,840 and the $6,448 threshold at which catastrophic coverage kicks in.
How the supplemental coverage would be structured is still being worked out.