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By Larry Fox
The new Medicare Prescription Drug Plan is referred to as Part D. Which stands for Drugs. According to a consensus of experts on the Advisory Board of To Your Good Health, A Health Care Newsletter, the D more appropriately might stand for Disaster.
And we’re not talking about the computer glitches that greeted the program’s stumbling inauguration January 1. These should pass.
Ira Wolfson has been an outreach counselor for SHINE, Serving the Health Information Needs of Elders, since 1997.
“The Medicare Part D program is the most confusing, awful program ever to come down the pike,” he told the board’s most recent meeting at the Dan’l Webster Inn. “I don’t want to paint it as the worst program ever, because for some people who never had (this) insurance it does give them some coverage. But, on the whole, how this thing is implemented, how it’s working out and what their expectations have been…it’s just awful.”
Mr. Wolfson’s agency, a division of the Massachusetts Office of Elder Affairs, has been on the front line of the waves of elderly residents seeking help. “A lot of the work can be done on the computer,” Mr. Wolfson concedes, but then stingingly points out that an estimated “75 percent of seniors don’t have access to a computer.”
But there also are hidden landmines within the program that one board member said, “could lead to citizens with pitchforks storming the Capitol.”
“I’m waiting for the other shoe to drop,” said Jim Lyons, retired former President of Cape Cod Healthcare who originally trained as a pharmacist. “October or November…or maybe earlier…there’s going to be another public relations crisis because people will be coming into that ‘donut hole’ without realizing it. They’re going to bring their prescriptions in and find they have to pay full price and there’ll be plenty of hollering and screaming.”
One reason would be the confusing method of calculating drug expenditures. According to the bill, you get your drugs for a small co-pay until your expenditures reach $2,250, including the initial $250 deductible. After that, you enter the black donut hole when you must pay 100 percent for meds until expenditures reach an additional $2,850. Then the plan kicks in again to pay 95 percent of subsequent costs.
These monetary calculations, however, are based not on the small co-pay the consumer must shell out, but on the retail market value of those drugs, as determined solely by the insurer. (And not even on the wholesale price most pharmacies will be paying for them, it was pointed out.)
It will behoove consumers to check those figures to avoid sticker shock when they realize they’ve fallen into the donut hole.
Dr. Arthur Bickford, Chief Physician at the Duffy Medical Center, decried the “lack of transparency” in the bill. “The government has created a monster,” he said and he’s particularly upset by the fact that most consumers are not aware of the “tier system” in most plans. Generic drugs are level one, basic brand drugs are level two and the most expensive high-powered drugs are level three. “Some of the less expensive drug plans don’t even carry level three drugs in their formularies. And if you really need the drug and pay for it yourself, that doesn’t count toward your out-of-pocket expenses (for climbing out of the donut hole),” Mr. Wolfson pointed out.
Another hazard down the road is that private companies may use the government plan as an excuse to opt out of their pension obligations to retirees. “This will further burden the Medicare program financially,” Mr. Wolfson predicted.
Mr. Lyons warned of another possible ploy by private companies. First, retirees get a letter from the company offering to pick up the tab for premiums and co-pays—even the donut hole—if they’ll shift to Part D. “But what they won’t tell you is, ‘For now,’” Mr. Lyons predicted. And a year later comes the second letter saying this subsidy has been cancelled and the retiree can’t get back into the company plan.
Mr. Lyons said the major hope was that the inevitable chaos would cause enough of an uproar to force revision or even repeal of the current program.
“I look at this as a stop-gap matter anyway, for the short term,” agreed Sue Miller, Associate Dean at Cape Cod Community College, as she added another landmine to the mix: “What will it be like when the Baby Boomers become eligible over the next 10 years?”
The new program is fraught with dangerous fiscal unpredictability, Mr. Wolfson warned. Already the predicted cost has ballooned from a 10-year estimate of $400 billion to $700 billion, he said.
To appreciate the full extent of the financial minefield, we have to go back to current enrollment figures. Some 40-million Americans (60,000 on the Cape) qualify for Medicare Part D, Mr. Wolfson explained. To date, the Administration is trumpeting that 11 million have signed on. “But they’re playing with the numbers,” he charged.
That’s because 10 million enrollees are what’s called “dual eligibles,” meaning they’re on Medicare and Medicaid (MassHealth in Massachusetts), where the drug benefit has been eliminated. These people—who actually had perfectly good drug coverage before this new program began—had no choice and were automatically switched over, which means only three percent, or one million, of the remaining eligibles actually had signed on by this writing.
Mr. Wolfson also worried that, “Nobody knows what the claims experience will be until after the first year. Only then will we know what it really costs.”
That early returns show a census top-heavy with “dual eligibles” is particularly worrisome, he declared, “They’re the ones with the most problems who are most expensive to fund,” he said. “And this could lead to companies increasing their premiums a year from now…or pulling out of the program altogether.”
Dr. David Penfield, an emergency room physician, calls the new drug plan “a mess,” but really only a small part of a more complex “fundamental” problem. “Prescription drug costs for this country are far too high,” he charged. “But drug companies are not the villain. It’s a fundamental system problem. We have to fix it at the marketing and education level. There’s never any marketing done on cheap drugs.”
Many Americans, of course, are still working and otherwise insured through their employers or not yet of an age to be part of the Medicare Generation. Speaking for them, board member Andrew Young, a former trustee of Cape Cod Hospital, conceded, “It’s not yet on our (family) radar screen.”
But generally the confusion continues. “We’re seeing more and more of our clients asking for help,” said Denise Dever, President of Home Instead home care service, and Rosemary Dillon, who heads the nursing program at CCCC confirmed the general befuddlement.
Citing the example of the Veteran’s Administration’s well-oiled program—which also, unlike the new Medicare program, can negotiate with drug companies to keep prices down—Mr. Lyons concluded with the saddest note of all: “They could have made it so simple.”