The cost of Medicare Part D

On January 1, 2006 congress and the Bush administration created a new program designed to assist Medicare beneficiaries with prescription drug costs. Never before had Medicare covered prescription drugs and as a result of prohibiting the government from negotiating for the best drug prices on the behalf of the 43 million eligible people on Medicare, the Medicare Part D program was placed in the hands of private health insures. A program that was marketed to help seniors and reduce cost actually penalized the most vulnerable group receiving Medicare benefits, the low income and disabled seniors who previously received Medicaid assistance for prescription drugs at no cost, now have to apply for a subsidy and begin paying for their medicines. This population is referred to as the dual eligible’s; Medicare beneficiaries who are dually eligible for Medicare and Medicaid programs. Medicare handled this transition by randomly assigning dual eligible’s to average cost prescription drug plans, most of which do not cover all drugs used by this population. Let me explain in detail how Medicare part D works so you can better understand the impact of this change on this population. Each state offered private insurers and opportunity to implement a Medicare Part D drug plan. Each insurance company could decide which drug they would and would not cover. They would charge a premium for their plan some of which had deductibles and some did not. The plans offered coverage on specified drugs at a co pay amount. The co pay could be as low as $0 to $30 per drug. Premiums varied as well any where from $5 a month to $150. In addition the plans only cover total drug costs up to $2250, and continue to not cover drugs until the out pocket cost reach $5100. Then the plans will again begin to pay a percentage. This is referred to as the “Donut Hole,” a gap in coverage where plans pay nothing but beneficiaries must continue to pay their prescription drug plan premium. Many people did not realize how this worked and how it would affect them. These plans did not count the cost of the drug at the co pay amount, they added the full cost of the drug, so if someone was receiving a 30 day supply of Prozac and paying $30 and the full cost of the drug was $150 for a 30 day supply then the amount added up would be the full price. Many people take drugs that are over $100 for the full price. This means if a person took 6 different medications with co-pays of $10 and a full cost price of $100, the person would be paying $60 but the amount considered would be $600. This means this person would hit the Donut Hole in only four months. Then they would have to pay the full price of the drug until the dollar amount reached $5100. This affected a population which did not qualify for Medicaid but had been utilizing pharmaceutical programs for their medications. Most brand name pharmaceutical companies had offered free medications to folks who where low income but not eligible for Medicaid, however when Medicare adopted Part D these programs discontinued, forcing people to join a drug plan they could not afford.

The recently passed Health Care Reform bill has many similarities to the poorly designed Medicare Part D program. Although this bill will help many people who were previously without health care, it is not a public option and ultimately puts millions of dollars into the hands of insurance companies. Jon Walker from firedoglake which is a progressive political website writes about this issue in his blog here is the link:
http://fdlaction.firedoglake.com/2010/03/15/democrats-who-once-railed-against-medicare-part-d-now-insist-members-must-vote-for-strikingly-similar-senate-health-care-bill/.
With the bill now in place there are a few improvements for the Medicare Part D program. For seniors, the bill will immediately expand the Medicare drug benefit and, effective July 1, provide a 50 percent discount on brand-name drugs for the low-income elderly and the reconciliation package (a revised section of the bill)would also gradually close the gap known as the "doughnut hole" in Medicare prescription drug coverage, which leaves many seniors to pay the full cost of expansive medications. Ultimately I would have liked to see a public option which would have forced insurance companies to lower their costs. In our current capitalistic society it will be a monumental day when every American can share the same health care coverage, and bills are not influenced by lobbyist with bottomless packets. Here is one more link to another blog from Jon Walker providing some food for thought:  http://fdlaction.firedoglake.com/2010/04/27/reduce-the-deficit-by-expanding-medicare-not-cutting-it/ .