January 03, 2006
Drug Benefit Proves Confusing
|Courtesy of Boston Globe|
Seniors and low income Americans are now finding out how the new prescription drug program
is working. A number of the stories are about how it seems to be working well for some although it is still very confusing for many.
There are several points to make about this new government program that will cause people who expect to rely on it much to regret.
- As the graphic from the Boston Globe shows, people who need more than $2250 in drugs fall into a doughnut hole where they are responsible for all of the expenses for the drugs until they have covered $3600 of the payments ($750 + $2850 out of pocket) before being covered again.
- The bill makes it illegal for people to use other insurance to cover this gap.
- Low income beneficiaries (below $14000 per year for individuals or $19,000 for couples) should not have a gap in coverage as their out-of-pocket payments should be covered by the government.
- Beneficiaries select a plan and cannot change it except once a year.
- The plans can drop drugs or change the drugs they cover once every 90 days.
- People that were covered under Medicaid who have not signed up for a plan have been assigned a plan by the government which might not cover the drugs they need.
- Companies will get a subsidy to keep providing a prescription drug benefit, but some are already dropping that part of their benefits for retirees which means they'll be dumped into this program as well.
Obviously, we are just starting to understand the full extent of this new program and when you look into the program, it is clear there are a lot a really nasty gotchas that can affect adversely a lot of people.
Also required reading to understand how this program affects real people with serious medical problems is this diary from Joseph Rainmound.
So, now that the NY Times has provided their obligatory "it looks like things are going pretty well for this program" story right after the program was started, do you think they'll remember to check to see what happens in the next few months, especially for those who find themselves trapped in the benefit doughnut hole or find themselves in a plan that dropped coverage for drugs they need?
Update: Here's Arizona Eclectic's excellent primer on the Drug Plan (hat tip to The Sideshow).
Posted by Mary at January 3, 2006 12:10 AM | Health/Medicine/Health Care
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As the graphic from the Boston Globe shows, people who need more than $2250 in drugs fall into a doughnut hole where they are responsible for all of the expenses for the drugs until they have covered $3600 of the payments ($750 + $2850 out of pocket) before being covered again.
Is this per year?
yes, it is an annual expense. And I forgot to mention that additionally people are required to pay a monthly charge of $32.20 as well as cover the other costs. Obviously, this plan can work well if you are healthy without needing many complex drugs, but if you are sick and on a fixed income, it could be a real hardship.
The plan works IF you are not poor and IF you do not need any medications the plan you choose decides not to cover and IF you don't get very sick and need those medications after all and IF the plan you choose does not decide to drop (remember you cannot change plans midstream) one or more of the medications you need or will need and IF ...
And all these wonder IF's come a very high price for the taxpayers. A real drug benifit could have been concocted for much less money to the taxpayers, but of course, real coverage wasn't the object was it?
I don't think there is as much confusion as being reported. I think those who research the plans being offered are more flabbergasted than confused.
Most can understand. What most can't do is figure out how to predict their needs so they can select the 'right' plan, assuming there really is a right plan and that the plan won't change on them anyways.
The only real protection in the plan is IF your medication requirements exceed $5,100 and then only IF your plan covers the medications you need. Infact this would probably be fine is they had implemented a straightforward insurance for drug costs over $5,000 or even $10,000 a year and kept Medicaid coverage as it was to cover those who could not cover their costs below this level. That might have worked. This PharmaPlan is a mess, designed by the drug industry, that requires the supposed beneficiaries of the plan to by psychic.
Thanks for your info, Gail. I thought the piece you did was very well done - and was sorry I didn't read it earlier.
Here's a better write up than most: American Progress' A Prescription For Confusion