More than 43 million US senior citizens have started choosing a new prescription drug plan under the biggest change to the country's Medicare scheme since 1965. But many are finding the choice of different schemes bewildering.

Senior citizens can join without penalty as late as 15 May 2006, but for coverage to begin by 1 January 2006, they must select by the end of this year. The drug benefit is going to cost an estimated $724bn (£421bn; €615bn) over 10 years, as senior citizens have on average six prescriptions each. Some say it is President Bush's biggest domestic achievement. Up to now, the Medicare scheme, which provides health insurance for senior citizens, has reimbursed only a limited number of drugs.

The federal Centers for Medicare and Medicaid Services have issued an official 100 page handbook entitled Medicare & You 2006 to every Medicare beneficiary. It explains that insurance companies and other private companies are working with Medicare to offer the plans.

Comparing one plan with another is confusing, because people enrolling must balance how much risk they are willing to absorb, against how much they are willing to pay in monthly premiums ranging from $10 to $70. Each insurance company offers different plans, varying from state to state.

Josephine Slosky complains about the complexity of Medicare plans at a meeting in California

Credit: DAMIEN DOVARGANES/AP

On 13 November 2005, the front page headline in the New York Times said, “Confusion is rife about drug plan as sign-up nears.” When asked about beneficiaries' confusion, Michael Leavitt, secretary of the US Department of Health and Human Services, said, “Health care is complicated. We acknowledge that.

“Lots of things in life are complicated: filling out a tax return, registering your car, getting cable television. It is going to take time for seniors to become comfortable with the drug benefit.”

In fact, more than 61% of seniors say that they don't really understand the benefit, according to a survey released last week by Kaiser Family Foundation, a non-profit foundation focusing on health care, and the Harvard School of Public Health. Only 20% of those polled said that they plan to enrol.

The yearly deductible charge (the amount the enrollee must pay before the plan starts to pay for any medicines) varies up to $250. If the total drug costs in 2006 add up to $2250, Medicare covers most of the drug costs. After that, enrollees must pay all costs out of their own money for brand name drugs until they reach $5100, a threshold that has been nicknamed “the doughnut hole.” After that, the “catastrophic drug coverage” scheme automatically pays 95% of remaining costs until the end of the year.

If only 20% or even 30% of senior citizens sign up, that will bode ill for the future of the programme, because the people most likely to sign up are the people with high drug expenses. “You don't have insurance if you don't spread the risk among people who are healthy,” said John Rother, policy director of the American Association of Retired Persons.