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Firms Drop Drug Coverage, Force Medicare Enrollees to Join Plans

Posted on: Monday, 31 October 2005, 21:00 CST

By Jean Fisher, The News & Observer, Raleigh, N.C.

Oct. 31--This January, the federal government will begin to pay a portion of Medicare enrollees' prescription drug expenses. Some companies that provide retiree health insurance have decided that means they no longer have to.

Emily Matthews of Fuquay-Varina, 65, has retiree health insurance, including drug coverage, through Great American Insurance. That's where she worked as an audit examiner for 33 years.

This spring, she got a letter saying drug coverage will be dropped Dec. 31. For her future prescription needs, the company suggested she sign up for one of the Medicare-approved drug plans many private insurers are now offering.

It was not good news.

Matthews takes at least seven prescription drugs -- for glaucoma, blood pressure, cholesterol and allergies, among other problems. Most of them are brand-name medications. She pays about $200 a month in co-payments under her retiree coverage but estimates the retail cost of the medicine at about $1,000 a month.

Based on her current needs, Matthews would pay nearly $3,000 more annually under the coverage being introduced by Medicare, the federal health insurance program for the elderly and disabled.

Medicare enrollees may sign up for the coverage beginning Nov. 15. Benefits are available Jan. 1.

"This is going to be just awful for me," Matthews said. "I don't know how I'm going to manage."

DuPont, the chemical manufacturing company, will continue to help retirees with prescription expenses but will require them to sign up for the new Medicare drug coverage to receive assistance.

Rose Barfield, 80, who worked at DuPont's plant in Kinston for nearly 30 years, isn't sure how the changes will affect her or her husband Milton, 84. She hasn't decided which Medicare drug plan would be best for them -- there are 38 plans available to North Carolina Medicare enrollees.

"I think it's horrible for old people to have to go through all of this," said Rose Barfield.

About 8 percent of companies that provide drug coverage to retirees plan to discontinue prescription benefits as of Jan. 1, according to a survey conducted last year by the Kaiser Family Foundation. Another 17 percent will require retirees to sign up for Medicare drug coverage but will help defray out-of-pocket costs. Most employers will continue to provide drug coverage.

That could change as companies better understand the effect of the new Medicare coverage, said Michelle Kitchman Strollo, a policy analyst with Kaiser.

"To some extent, employers are still figuring this out," she said.

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DD,

Source: The News & Observer

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