Sarah Solon

Plan D Needs its One Year Check-up. If the President Won’t Do It, I Will.

I know I was expecting the President to brag a bit about Medicare Part D. But on Tuesday night, he did little more than say that the government has a responsibility to provide health care to seniors...and that "we will meet that need."

Perhaps he was just moving briskly through domestic policy, perhaps he wanted to devote more time to his complicated new health insurance tax structure...or perhaps he's aware that Plan D's got more gaps than just the donut hole.

Nevertheless, the President lauded this program in last year's State of the Union Address and now that the prescription drug benefit is one year old, it merits a check-up. If the President won't do it, I will:

With its complicated, costly, and incomplete coverage, the Medicare Plan D prescription drug benefit that the President championed in 2006 has fallen far short of the President's pledge to provide quality care to seniors. What's worse, the President has resisted reforms that would make the program more efficient - such as Congress' plan to allow the government to negotiate for lower drug prices - that would provide straight-forward savings to seniors in favor of a large government subsidy to the already hugely profitable pharmaceutical industry.

In it's first year, Plan D - which directs federal funds to 260 private companies - has received mixed reviews. In 2006, 29 million Americans have enrolled, and, depending on who's estimating, between 8 and 14 million eligible seniors have not yet enrolled. Little progress has been made to extend prescription drug coverage to the currently uncovered seniors who were promised improved pharmaceutical access by Plan D.

Medicare should be a source of security for the middle class elderly. Plan D instead injects uncertainty and complexity. Many seniors have to sort through forty or fifty coverage options and select from among plans with a wide range of monthly premiums and deductible options - many of which are subject to change with minimal notice each year. By forcing the elderly and their adult children - who often care for both their parents and their small children - to make complicated decisions about finances and health care, Plan D requires a substantial investment of time and energy for a relatively small discount on prescription drugs.

And here's the part that makes me so incredibly sad, making me wonder if privatization - with its need for profits - perhaps inevitably brings these sort of pitfalls with it:

Each plan is subject to change dramatically every year. Take for example, Humana Inc, which advertised itself as the least expensive Medicare prescription drug plan at the beginning of the new Plan D program. In 2007, Humana increased its premiums an average of 60 percent, with increases of 466 percent in seven states. Two million seniors will be affected by the increase in rates, which grow out of a marketing strategy that attempts to sell cheaply in the first year to attract a wide consumer base and then raise its prices in the second year to increase profits. Humana Inc is banking on the hope that many seniors will have been so frustrated by the research and paperwork that went into selecting a plan in 2006 that they will be reluctant to shop around again in 2007 and opt to just pay the grossly increased rates. In its current form, Plan D provides no protections against this private company abuse.

In the next ten years, $720 billion in government funds will subsidize Plan D's private companies, yet because of confusion and unresolved gaps in coverage, significant prescription drug costs will continue to fall onto middle-class families. Moreover, without changes to the current set-up, many seniors will continue to fall through the "donut hole" a gap in coverage that kicks in after a certain amount in drug spending and leaves the individual without coverage until they spend an additional $3000 in out-of-pocket medical expenses.

If the government were to negotiate directly with pharmaceutical companies to get the lowest prices for seniors, as the U.S. Veteran's Administration already does and as the Department of Health and Human Services would do under the bill past this month in the House, prices would be lower, confusion would be minimized, and fewer seniors would risk falling into the "donut hole". The middle class would receive a truly significant prescription drug benefit.

Plan D in numbers:

* Percentage of seniors enrolled in Plan D who approve of the program: 50
* Percentage of enrolled seniors who disapprove: 41
* Proportion of seniors who acknowledge that they "do not know much about the program": 6 in 10
* Estimated federal subsidy over ten years to the pharmaceutical industry under the Plan D program: $720 billion

Sarah Solon: Author Bio | Other Posts
Posted at 10:06 AM, Jan 26, 2007 in Health Care | State of the Union
Permalink | Email to Friend