The Medicare Mess (4/11/2006)

May 15 is the deadline for Medicare recipients to enroll in Part D, the prescription drug benefit. Yet, most Medicare recipients have not signed up because it’s a mess. Here’s why.

Part D privatizes the so-called benefit. This means, instead of using its power to negotiate lower prescription prices in a single easy-to-use system, the government subsidizes private companies to offer insurance for prescriptions. The competing privatized plans differ in many ways, making them hard to figure out and causing massive confusion. You must wade through Medicare’s website to determine the best plan by comparing prescription needs with insurance costs and to learn what your local pharmacy accepts.

Here’s the standard Part D coverage. First, there’s a premium, usually about $37 per month. Then, after you pay a $250 deductible, you pay 25% of your yearly drug costs from $250 to $2,250; your plan pays the other 75%. Plus your co-payments vary according to a prescription price tier. You pay the next $2,850 in drug costs, known as the “donut hole.” After that, your plan will pay 95%. Got it? Also, some medications require prior approval from the company, meaning more paperwork for you.

Because I’ve been trying to find a plan for my mother since November, I’ve learned there’s a huge amount of fine-print information you had better gather from the insurance companies--that is, if you can get them to send it. I’ve called Humana several times every month since November trying to get their options package. I grind through the automated system and get put on hold for hours; when I finally get a live person, she doesn’t know the answer, she transfers me, and the whole mind-numbing process begins all over.

Once you’re enrolled, the insurance company is supposed to track what you pay and what they pay, then send you a monthly statement. Last November, I asked Medicare to send me a software program so I could track expenditures. I learned I was the first person to ask for this. Medicare has no such software program and relies on the companies for honesty and accuracy. Yeah, right.

Even after you enroll, the insurers can drop coverage of your medication with a 60-day notice. You, however, cannot change plans until the end of the calendar year. People are falling through the cracks, and the combination of Part D Medicare with state Medicaid has created a new set of problems.

Dr. Dean Baker, in a February 2006 report for the Institute for America’s Future and the Center for Economic and Policy Research, points out that if Medicare were allowed to negotiate drug prices directly with the pharmaceutical industry and then offered the drug benefit directly rather than through private insurers, the combined savings would be more than $600 billion from 2006 to 2013. Instead, the current structure of the 2003 Medicare Modernization Act will add more than $800 billion to the cost of prescription drugs over the next 10 years.

So, who really benefits? Well, President Bush and his Republican cohorts rammed the legislation through so they could get the senior vote in the ‘04 election. Now it’s backfired; seniors are angry and frustrated with the program. Florida Republican Congressman Tom Feeney said that as many as 120 Republicans in Congress would vote against this Medicare prescription drug benefit if the vote were held today. But Part D has been a bonanza for some. For example, lobbyist John McManus helped write the law and made $1 million lobbying for clients like the pharmaceutical giant Merck. So, folks do the math. Clearly, the program benefits corporations and the drug industry but not seniors and other taxpayers.

- Judith Kohler

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