Unintended Consequences of Medicare Part D
In an article, “How The Medicare Doughnut Hole Is Making American Seniors Sick,” Jeremy Cockerill talks about the heath consequences of seniors hitting the donut hole under Medicare Part D. He says,An estimated 7 million Medicare Prescription Drug Plan beneficiaries will hit the coverage gap in 2007. Hitting the doughnut hole can have very serious health consequences for seniors. In fact, it can even potentially result in death.
He quotes a 2006 study published in the New England Journal of Medicine called, "Unintended Consequences of Caps on Medicare Drug Benefits," that found that drug plans with a cap on drug coverage (such as the doughnut hole in the Medicare Drug Plan) have an annual death rate that is 22% higher than plans that do not limit drug benefits. In addition, the study found that individuals whose benefits were capped were less likely to adhere to their long-term prescription drug therapies once they reached the coverage cap. This led to significant increases in hospitalizations and emergency room visits.
Cockerill suggests that by creating a gap in coverage in Part D, Congress actually created the potential for a major health crisis for seniors once they hit the doughnut hole. As drug prices continue to rise each year, seniors will be at greater risk of hitting the donut hole and being unable to afford their medications while there. From April 2006 to April 2007, Medicare drug plan prices increased 9.2% on the top 15 drugs prescribed to seniors.
Cockerill concludes,
These price increases, combined with the doughnut hole, will lead to a vicious cycle of non-adherence to drug therapies and poor health outcomes. During the time of year when seniors are hitting the doughnut hole (usually in the late summer and fall months) many will simply stop taking their medications. Come January, when a new Medicare benefit year begins, seniors will start up their therapies again. That is, if they were able to survive the doughnut hole.
With the death of my step dad, I’ve been less aware of the donut hole this year. But obviously it continues to be a problem.
Labels: Medicare Part D
Thursday, February 01, 2007
Good Report for Medicare Part D
The Centers for Medicare and Medicaid Services (CMS) reported that more than 39 million Medicare beneficiaries are enrolled in Medicare prescription drug plans.According to CMS, the average monthly price of premiums under the drug plans declined by $1 to $22 per month, compared to last year -- 42% lower than original estimates. Beneficiaries on average are saving $1,200 annually. According to a CMS tracking survey, about 75% of Medicare beneficiaries enrolled in a drug plan reported satisfaction with the benefit.
Sounds like maybe it ain’t broke…
Labels: Medicare Part D
Friday, January 12, 2007
Medicare Part D Negoiated Prices will Hurt Elderly
The House of Representatives today passed H.R.4, which would require the Secretary of Health and Human Services to negotiate prices with drug companies. The negotiated prices would be standardized across the U.S. for Medicare Part D beneficiaries.Republican opponents say the bill, which passed 255-170, would actually raise drug prices and retard pharmaceutical competition, putting a crimp in research on new drugs. Actuaries from the Centers for Medicare and Medicaid Services (CMS) agree.
In an OpEd for The Hill, Sally C. Pipes, president and CEO of the San Francisco-based Pacific Research Institute and author of “Miracle Cure: How to Solve America’s Health-Care Crisis and Why Canada Isn’t the Answer” challenges the wisdom of Nancy Pelosi’s “fix” for Medicare Part D. Her article is well worth the read as she points out that negotiating Part D will result in a restrictive formulary and lowered life expectancy.
U.S. Centers for Medicare and Medicaid Services (CMS) Acting Administrator, Leslie Norwalk agrees. She said that the only leverage in bargaining for discounts with drugmakers is to block some products from the list of covered drugs.
They're right. Government involvement in health care has done nothing but increase costs since its passage in 1965. Not because more people are covered, but because when you have such a huge purchaser of any good or service, that purchaser can dictate prices even to the detriment of the supplier.
In health care, Medicare and Medicaid have not covered their costs since their inception. The difference is shifted to private insurers and patients without insurance, resulting in more people without health insurance. And of course, those pockets are not endlessly deep, so we’ve seen providers go out of business as well as a significant increase in overall health care costs.
In the fifteen years following the passage of Medicare and Medicaid in 1965, expenditures for health care in dollars increased nearly sixfold, and health care costs rose from 6 percent to 9 percent of the country's gross domestic product (GDP). In the next 20 years, costs increased another fivefold, and more than doubled as a percent of GDP.
U.S. Health Care Costs
Dollars Percentage of GDP
1950 $12.7 billion 4.5 percent
1965 $40 billion (est.) 6 percent
1980 $230 billion 9 percent
2000 $1.2 trillion 14 percent
Anything the government does to require price negotiation will do more harm than good for both seniors and the rest of us. Medicare Part D is bad now; under the Democratic plan, it will only get worse.
Labels: elderly parents, health care costs, Medicare Part D, universal health coverage
Saturday, December 23, 2006
Medicare Part D and Merry Christmas
Just a quick reminder. You (or your parents) must sign up for Medicare Part D or make any plan changes before December 31.We just got back from visiting my parents for the family Christmas. It went very well, but every time I visit, I see little signs of decline in both Mom and Dad. Subtle, small, but visible.
I want to wish all of my wonderful readers a very Merry and Blessed Christmas. Enjoy your family and friends. They are gifts to you, and you are a gift to them.
Labels: Medicare Part D, prescription drugs
Monday, December 11, 2006
Medicare Soup - A, B, C, D
I’ve spent the evening on the Internet and still have few answers. A salesman from Mom’s HMO visited her last week. Apparently they are now offering a PPO option. Mom mailed me the materials, which don’t tell me a lot. This plan seems to have no premium, but doesn’t list the Part B premiums and is unclear on the Part D premiums.I called the salesman, who knew almost nothing. He said this is a Medicare Part C plan. I didn’t realize there was a Plan C. My research tonight showed me that Part C is the Medicare Advantage Plan, which is what their HMO plan is, which is different from a Medigap plan. I thought the HMO was a Medigap plan.
I asked for a side-by-side comparison between the HMO and PPO. That seems reasonable, since the same company is offering both plans to the same clients. It would make sense to offer a comparison so seniors can make an informed choice. Well, the salesman didn’t have or know of any such comparison, but assured me that the PPO plan is better. It has to be. “They can’t offer a plan unless it’s better. There are insurance laws, right?” Right…
This plan seems to have higher co-payments for many services, but also has an annual out-of-pocket maximum of $3,200. So depending on utilization, you might come out ahead. Or not. And there’s still no provision for coverage in the donut hole.
I finally found a side-by-side on the company’s website, about six layers deep. It gives me more information than I had before, but is still lacking. I continue to be amazed at how confusing all this Medicare stuff is. And I have a degree in hospital administration! There’s no way any of the seniors I know would be able to figure it out.
So tomorrow, in the midst of my workday, I need to find time to call the company and ask more questions. I hope I don’t have to sit on hold for 20 minutes, which is what usually happens. And so far, I’ve not been impressed with the knowledge (or lack thereof) of the employees I’ve spoken to. When I was trying to get information on Part D, it took three calls to find an employee who even understood my questions, which were clearly not part of their memorized scripts. So I hope I can find someone who can help me so I can get back to work.
Labels: Medicare, Medicare Part D
Thursday, December 07, 2006
Medicare Web Tool Estimates Prescription Drug Costs
The Medicare website has posted a new cost estimator tool to help seniors estimate monthly and annual expenditures for prescriptions drugs based on the drugs beneficiaries take and their pharmacy.The estimator tool can help seniors choose insurance plans and figure out when they may fall into the "donut hole," the coverage gap in Medicare's prescription drug benefit. It also helps them to compare Part D plans and search for drug costs, providing a detailed explanation of its cost estimates. The site is updated every two weeks using new information provided by the plans.
This may be helpful as a starting point, but since insurance plans can change their prices during the year, actual costs might be lower or higher than the cost estimator's predictions. So how does this help?
Labels: Medicare Part D
Thursday, November 09, 2006
AARP and Medicare Part D
I get tired of writing about Medicare Part D, but seriously folks, it’s a huge decision, as some of us learned this year. And it’s way too complex for any elderly person I know to understand. Another problem seems to be that we’re shooting at a moving target. The plan you had last year may change in any of several ways. And from what I’ve heard, they can even change during the year.AARP provides an easy-to-understand synopsis of the program. Please don’t just assume that you’ll do what you did last year.
Now I need to get my mom to send me the materials from their plan so I can see what changes they’re making and then compare them with the others in the area. Problem is, my folks are in an HMO. I wonder what happens if you opt out of the HMO’s Part D plan but want to stay with the HMO. Anyone know?
Labels: AARP, Medicare Part D
Monday, November 06, 2006
More Medicare Part D
David at The Delaware Right makes a very good point that prior to Part D, there was nothing for many seniors. For them, what we have now is definitely better. He’s right. $2250 in coverage is better than nothing. Amazing how quickly we grow accustomed to "entitlements!" However, I still think the plan is too confusing for mere mortals (especially confused 85-year-olds) to understand.Unfortunately, my parents had better coverage before with their Medigap program and are now in the donut hole, so it's easy to be critical. I was suspicious when their plan announced that they were adopting the Medicare Part D plan. I’m sure it is better for those whose prescription drug use is low, but it’s sure a kicker for those who have several branded meds for which there is no generic.
Here’s what we’re doing: As much as my mom hates to ask for help (and she feels that asking is begging), I’ve convinced her to ask all of my step dad’s doctors for samples of all of his meds. Even if Doctor A didn’t prescribe the drug, he may have samples while the prescribing doc doesn’t. Many of the drug companies have plans were seniors in the donut hole can ask them directly for help, but since they also provide physicians with samples, that’s the easiest way for seniors to meet the need for the next two months.
Labels: donut hole, Medicare Part D
Saturday, November 04, 2006
The Complexities of Medicare Part D
Forgive me if I sound like a broken record. I know that many of my posts relate to the Medical Prescription Drug Plan. I guess I continue to be appalled at the complexities and the fact that mere mortals don't have a hope to understand it. Here’s yet another article trying to make the complex understandable.Frankly, I still have my head in the sand. I’m not pleased with the plan my parents have, but I don’t know if I have the time or energy to try to find something better. And as the author points out, it seems that the plans reserve the option to change in the in middle of the year, but the beneficiaries don’t have that option. Go figure!
Labels: Medicare Part D
Monday, October 30, 2006
AARP Polls Members re: Medicare Prescription Drug Plan
A new AARP poll indicates that only 46% of Americans age 61 and older think Medicare’s prescription drug plan will be a good thing for older Americans who have difficulty paying for their prescriptions. These older people are even less likely than baby boomers, not yet eligible to participate, to give it a favorable rating. Twenty-six percent of those age 42 and older in this survey think the program is bad for older Americans.This is not surprising as more seniors fall into the donut hole and realize that the Plan is not all it was cracked up to be.
Open season begins November 15. If you are not pleased with your plan, Watch your mail for the Medicare & You handbook and for information from plans in your area. Complete the Rx Enrollment Check-up. You can also review and compare plans on cost and coverage at the Medicare website on the web. This site offers lots of helpful information for seniors. Decide what plan you want for 2007. If you’re satisfied with your current plan, there is no need to re-enroll.
Labels: AARP, donut hole, Medicare Part D
Thursday, October 05, 2006
With an Eye Toward Our Future
As I’ve been consumed this week dealing with the donut hole (and not finding good solutions yet), today there’s news for those of us who are baby boomers. The experience with our parents has probably already taught us that we can’t depend on Medicare and Social Security to cover everything, even though my mom feels that they should. But soon, these concerns will apply to us as well.According to a story from the Wichita Eagle, about the time that three million baby boomers become eligible for Medicare benefits next year, the federal insurance program is proposing to cut payments to physicians by 5.1 percent. This marks another round of proposed decreases in reimbursement rates to doctors, mandated by what physicians call a perpetually flawed formula and once again threatening access to care as fewer doctors say they can afford to see patients with Medicare.
When I worked in health care years ago, both Medicare and Medicaid were blamed for the spiraling costs of health care. Doctors were already limiting their practices to a certain percentage of Medicare patients, and even fewer Medicaid patients. In California, it’s increasingly difficult find doctors who will treat Medicaid patients. Is it likely that by the time we get there, doctors will accept fewer Medicare patients as well? And is it likely that our parents will find it more difficult to find care?
Federal Reserve Chairman Ben Bernanke called for an urgent overhaul of Social Security and Medicare, warning that failure to do so soon could lead to dire economic consequences as the first wave of baby boomers—76 million Americans born between 1946 and 1964—begin taking early retirement in 2008.
Federal lawmakers are unlikely to make the decisions that will solve the problems. As the population ages, fewer workers will be funding our benefits. So it’s important that we begin to look ahead, plan ahead, and be prepared to take responsibility for our own needs. If we depend on the government, we may be sadly disappointed. The biggest problem with the donut hole is that seniors expected the government to take over their prescription drug needs. As the plan is failing, our parents feel betrayed. Let’s make sure we don’t have the same experience.
Labels: donut hole, Medicare Part D, Social Security
Wednesday, October 04, 2006
Possible Help With Medicare Prescription Drug Plan Costs
I’ve been calling around today to see if we can get help with the donut hole. After almost an hour on hold and calls, I learned that the Social Security Administration has a program to help low-income seniors when their prescription drug costs have exceeded the limit. If they qualify, the government will pay the Medicare Part D premium and 95% of the cost of the medications. You can apply online or call for an application (which they say will take three weeks to reach you) at 1-800-772-1213 or TTY 1-800-325-0778, 7am-7pm Monday-Friday.In order to qualify for this program, the applicant’s combined savings, investments, and real estate (other than their home, vehicles, burial plots, or personal possessions) must be worth less than:
$11,500 if you are single, a widow(er) or your spouse does not live with you; or
$23,000 if you are married and living together
To complete the application, you will need access to the following documents for the applicant and his or her spouse (if married and living together).
bank account statements, including checking, savings, and certificates of deposit;
Individual Retirement Accounts (IRAs), stocks, bonds, savings bonds, mutual funds, other investment statements;
tax returns;
payroll slips;
most recent Social Security benefits award letters or statements for Railroad Retirement income, Veterans Benefits, pensions and annuities; and
the cash value and face value of any life insurance policies you have.
Of course, the application is complicated enough that many seniors will need help completing it, and anyone who has been responsible in providing savings, life insurance, IRAs, etc. for themselves over the years won’t qualify. Unfortunately, it appears that my dad doesn’t qualify by just a few dollars. And yet, his prescription drug costs are in the hundreds every month. Hundreds that used to be covered by his Medicare wrap HMO. I wonder who is winning with this program? Not us. I’m feeling smooshed…
Labels: Medicare Part D, Social Security
Monday, October 02, 2006
The Hole
This week we fell into the hole—the donut hole. We aren’t alone. Three million seniors are expected to fall with us, many this month. The donut hole is a formerly little-known gap in the new Medicare prescription drug plan. Under the plan, the government pays for the bulk of drug costs only until the beneficiary and the government together have spent $2,250 for the year. Then beneficiaries pay 100 percent of costs until they have spent a total of $3,600 of their own money. Only then does the federal government resume its participation, paying 95 percent of any additional expenses. This plan was discussed in a Washington Post article dated last week. The Post estimates that 3 million seniors will fall into the donut hole this year.When the new Medicare Part D Plan went into effect, Dad was in the nursing home. The staff there tried to explain it, but they weren’t sure about the details. And frankly, it was way over my head—and I have a master’s degree in health care administration! Mom didn’t even try. Having no context to understand it, we signed up and prayed for the best. Dad’s prescription drug needs continued to increase and so did his costs. And then, last week when Mom picked up his meds, she was hit with a bill of several hundred dollars!
We’ve been trying to figure out what to do. There are a number of programs that have been developed to help seniors in the hole, but figuring them out is almost as confusing as understanding the Medicare plan. Some of the drug companies have plans to provide their meds at reduced costs, but it looks as if we’ll need to go to several companies. Medicare offers five suggestions for bridging the gap
I’d like to know who our lawmakers thought they were helping. These problems were anticipated when it was in the legislative stage, but no one listened. And now, I’m not the only one feeling smooshed.
Labels: donut hole, Medicare Part D