Nearly 165,000 PACE or PACENET members will receive letters this month that outline their options as the state works to combine its drug assistance programs with the Medicare prescription drug benefit known as Part D.

The letters, scheduled to be mailed next week, will specify one of nine private plans offering Part D benefits that state officials believe will best meet a PACE or PACENET recipient's needs.

Recipients will have 10 days to notify the state if they don't want to be enrolled in the specified plan. The letter provides a toll-free number that recipients can call.

Those who take no action will be automatically enrolled in the suggested plan.

"You will then receive an identification card directly from the Part D plan," the letter reads, noting that recipients should show both that card and their PACE or PACENET card to the pharmacist when they have their prescriptions filled.

Officials expect most recipients to accept the suggested plan and notice little, if any, change in their coverage under the merged program. Because the federal program would be covering part of the state programs' cost, the state could save nearly $170 million a year.

State legislation approved recently helped clear the way for the merged program. The state programs would cover drugs not covered by Part D, pay deductibles and provide coverage through a gap known as the doughnut hole.

While many people enrolled in PACE, which serves low-income Pennsylvanians 65 and older, and PACENET, which serves people with somewhat higher incomes, will be receiving the letters, about an equal number will not.

Among them are about 130,000 people in Medicare Advantage plans that often provide both medical and prescription drug coverage through Part D. Still, state officials want them to sign up for Part D if they haven't and if the coverage is offered by their plan, said Tom Snedden, PACE program director.

Another 10,000 PACE or PACENET recipients won't be automatically enrolled in Part D because they didn't work enough hours to qualify for the federal program, Mr. Snedden said.

Officials also don't plan to enroll in Part D about 22,000 PACE or PACENET recipients who currently don't use prescription drugs.

While the Part D plans would benefit if they enrolled those people, Mr. Snedden said doing so would mean that the state would have to pay their monthly Part D premiums.

"We don't want to be unfair to the plans," Mr. Snedden said. "On the other hand, we want to be as cost-efficient as we can. Why pay premiums for people not using the benefit?"

State officials plan to review that decision in a few months, he said, and may modify it if the plans can show they are struggling to make a profit on the state's PACE and PACENET programs.

The state would automatically assign most PACE and PACENET recipients to plans operated by several companies, including Highmark Inc., the region's dominant health insurer.

The state based those assignments on plans that provide access to pharmacies used by PACE or PACENET recipients and the best coverage of recipients' drugs, Mr. Snedden said.

Humana would be allocated nearly 39,000 PACE or PACENET enrollees under its Standard and Enhanced plans, and Highmark nearly 38,000 under its BlueRx Basic plan. Independence Blue Cross would receive nearly 37,000 enrollees through its AmeriHealth Advantage plan, and United HealthCare about 31,000 enrollees through its PacifiCare Saver plan and two Ovations plans.

First Health's Premier plan would receive about 11,000 enrollees, and one of MemberHealth's Community Care Rx plans would receive about 8,300.

Denise Grabner, a Highmark spokeswoman, said the company was pleased, but noted that the numbers could change if PACE or PACENET recipients select other coverage.