Consumer Action

Published: May 2007

Many eligible seniors miss out on prescription drug reimbursement

More than 400,000 low-income seniors may have missed out on millions of dollars in prescription drug reimbursements, finds a recent Government Accountability Office study. These seniors make up a large group of older Americans who are dually eligible for Medicare and Medicaid.

Why were they overlooked? The federal government forgot to inform them that they could be reimbursed for past prescription drug purchases when they enrolled in Medicare’s drug benefit program. When seniors enroll in Medicaid, the law provides that their prescription drug purchases be covered retroactively to the first day of the month they became eligible—and the enrollment can take a month or longer.

Last year, the Centers for Medicare and Medicaid Services (CMS) received approximately $100 million from paid Medicare insurers to provide prescription drug coverage under Medicare’s “Part D.” But CMS didn’t inform eligible beneficiaries that they could seek reimbursement for some of their previously purchased prescriptions.

Medicare’s Part D prescription drug benefit plan covers millions of beneficiaries using private drug plans to offer benefits. To some critics, the complexity of Plan D has led to this oversight, as well as related confusion. Because there are more than 400 plan sponsors, low-income seniors can be overwhelmed by the dozens of plan options. And the confusion has even bred scams. Indeed, during the 2006 annual enrollment period some Part D sponsors told beneficiaries that a home visit was needed to enroll in one of their prescription drug plans. Then agents who made home visits engaged in a hard sell to often enroll the beneficiary in a private fee-for-service plan, according to Vicki Gottlich, an attorney with Center for Medicare Advocacy Inc.

For more information on Medicare’s prescription drug benefit plan, click on these links:

U.S. Department of Health and Human Services Medicare site

Center for Medicare Advocacy, Inc.

National Senior Citizens Law Center