Wednesday, August 27, 2008

Medicare Part D or how to impoverish the elderly

The trumpeting cry behind the Medicare Part D program was that it would finally provide prescription drug coverage for the elderly and disabled. AARP, the powerful advocacy organization, rallied behind it, giving cover to that bastard.

But as it turned out, Bush created Medicare Part D as an insured pay flow for private vendors, middlemen between drug companies and hapless recipients. It is widely known that the government will not negotiate for lower drug prices for its vast constituency, unlike the Veterans Administration.

When I examine one case, that of a close relative who receives prescription drug benefits through a Medicare-preferred private insurer, it is obvious that the concern is not for the person who needs medicine but for the bottom line of the insurer.

She pays premiums of $100 per month (an increase of 80% from a year ago) for the opportunity to have $2400 worth of drug costs covered. The calculation of that $2400 includes the entire cost of the drug, not merely the co-pay. So if you buy a drug with a co-pay of $40 but the total cost of the drug is $350 (not uncommon), the $350 counts towards the $2400 initial coverage. Once you hit that $2400 mark, you fall into what is known as the "doughnut hole". (Meaningful name) Then confusion and dismay follow in short order.

In the "doughnut hole" you have to pay 100% out of pocket for your prescription drug costs until you have spent $3600. The calculation of that $3600 out-of-pocket figure includes your co-pays over the year. It's very confusing for her, and she can read without moving her lips.

The way it breaks down is: She pays about $100 monthly premiums, about $1200 per year, plus $3600 out of pocket for $2,400 worth of benefits. Unless somehow she gets through that $3600 doughnut hole intact in order to qualify for catastrophic coverage, wherein she only has to pay 5% of total drug costs.

So she pays $4800 for $2400 worth of benefits. But she has to keep paying the premiums in case she god forbid is diagnosed with something unexpected that may entail runaway drug costs (i.e. cancer, diabetes, et al). This is not insurance for her. This is insurance for them.

When I contacted this magnanimous "preferred" vendor, I didn't get the impression that the customer service reps were prepped and ready to serve. My vision was that of a desk, a chair and a telephone under a bare light bulb in an anonymous rent-by-the-month room-for-an-office. I have nothing against a bare bones operation. I just wonder where the profits are going. Maybe the CEO can send my aunt a postcard during his vacation in Tuscany, or the blueprints of his new McMansion. Then she'll feel better about skipping her insulin.

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