Hawai'i seniors warned of Medicare drug gap

By Johnny Brannon
Advertiser Staff Writer

Nearly 175,000 Hawai'i senior citizens are expected to be eligible for prescription drug discount cards under a controversial Medicare overhaul bill approved by the U.S. Senate yesterday.

The discount cards should save beneficiaries as much as 25 percent on the cost of most prescription drugs, said Elvira Lee, community assistance chief of the state Executive Office on Aging.

The measure especially benefits the state's more than 36,000 Medicare beneficiaries who have no prescription drug coverage, and may improve coverage for others who pay to participate in private drug plans, Lee said.

Hawai'i is expected to save $102 million over eight years beginning in 2006, because Medicare will absorb some costs now covered by the state through Medicaid, she said.

But Greg Marchildon, state director of AARP Hawai'i, which advocates on behalf of retired people, said the bill clearly won't help everyone, and that many who qualify for its benefits don't necessarily need them.

A major goal is to have the state Legislature strengthen a Hawai'i drug program that has yet to be implemented, he said.

Hawai'i Rx, approved by the Legislature last year, would create a purchasing pool to negotiate discounts with drug manufacturers on behalf of members, who would be able to buy the drugs at local participating pharmacies at a discount.

Lingle criticized the program initially, but said this month she favors amendments to protect it from the type of legal challenges faced by a similar program in Maine. Hawai'i's program is to take effect in July.

The program should help middle-class seniors who do not qualify for benefits under the federal drug plan, Marchildon said. "The combination will put Hawai'i in the forefront of national healthcare policy, he said.

But Marchildon cautioned that some consumers might have better coverage through retirement plans or elsewhere, and participation in the state and federal drug programs is voluntary.

"If you are happy with what you've got, you don't have to leave," he said. "You have to think about where you are, and don't jump out of your socks."

AARP, which lobbied hard for the federal Medicare Prescription Drug and Modernization Act, has been criticized by some members who feel not enough seniors will benefit. Opponents also criticized $14 billion in incentives the bill awards to private insurance companies to compete with Medicare.

"Our feeling was, if you're waiting for a perfect bill, you're not going to get it," Marchildon said.

The bill largely benefits low-income beneficiaries and those who pay most of the cost of their prescription drugs, but leaves significant gaps for middle-income consumers, he said.

"Those folks who are basically living on a Social Security check and not much more are really going to be helped by this bill," he said. That amounts to some 12 million seniors nationwide, Marchildon said.

"If you're living on a fixed income like Social Security, and you're looking at a $200 or $300 drug bill out of pocket every month, (the benefit), of course, is going to be frankly spectacular savings," he said. "It's going to make a huge difference in the lives of the very poorest seniors in the state of Hawai'i."

The measure was strongly backed by Republicans and is expected to be signed into law by President Bush. Hawai'i's senators, both Democrats, opposed the bill and said it diluted the Medicare system's purchasing power by requiring that medications be purchased by regions, rather than by the system as a whole.

"With more individual buyers, pharmaceutical companies are more able than ever to raise their prices, because the individual regions will have less bargaining power," Sen. Dan Inouye said in a written statement.

He called the measure "nothing short of an attempt to compromise the integrity of the Medicare and Medicaid system as we know it."

Sen. Daniel Akaka said low-income Hawai'i seniors who get their medications through the state's Medicaid program will be worse off, because they will be charged co-payments.

"The intent of the legislation is to expand prescription drug coverage for seniors, not merely to shift the financial burden of existing coverage to the federal government," Akaka said in a speech Monday. "Many seniors will be forced to rely on Medicare, which will provide a less generous benefit than what they currently enjoy."

Pamela Cunningham, director of Hawai'i's Sage PLUS health insurance counseling program, said more information about implementing the federal drug benefits is expected in late December.

Reach Johnny Brannon at jbrannon@honoluluadvertiser.com or at 525-8070.