Montrose County Department of Health and Human Services

Medicare D—Boon or Boondoggle?

Warning! This column is not for children under the age of twenty, not because of its appeal to prurient interest, but because a Medicare deadline is fast approaching, and no one under the age of twenty can even imagine being old enough to worry about Medicare. The rest of us, whether we left those teen years behind five years ago or eighty-five years ago, should pay more attention to the deadline looming on December 31. If you are sixty-five or older today, you need to pay attention to that deadline because in the short run life could get more expensive after that date. If you're twenty-five and too hip right now to think about Medicare, think again. In the next nine years Medicare D could cost seven hundred billion dollars, a tab that the government will cover either through new tax dollars or through cuts in important programs we have come to cherish.

Without going into the details of the Medicare D program (there are limits to the length of this column), let's put you in the driver's seat for a minute. If you were assigned to the task of coming up with a drug benefit for seniors, would your first thought have been, “We need a plan with at least thirty or forty options right up front, and those options should not be clear to consumers.” Knowing that you wanted to save money for seniors, would you then say, “We'll pay some insurance company an average of $94 each month for every senior enrolled, and we'll pay that out of the premiums seniors pay for the program plus taxpayer dollars. And of course we'll create coverage that looks like a doughnut so that seniors will get help with the first $2,250 in drug costs, and for drug costs over $5,100, but we won't cover those $2,850 worth of drug costs in the middle.” And with a captive audience tired of the high cost of drugs you could say, “Let's penalize everyone who doesn't sign up in time by charging 1% of the average national premium per month.” And the final piece you would certainly include would be, “Let's make a rule that we can't negotiate prices with the drug companies.”

If you presented this plan at a neighborhood social gathering with more than two seniors present you would risk a serious caning or worse, and you would deserve it. Yet each one of these elements is in the present Medicare D plan. We the People can do better. People who are able to get their medications through the Veterans Affairs Administration, where the government does negotiate the price of drugs, will find that Medicare prices average about 85% higher than the negotiated prices the VA pays. Indeed, even Costco, without the senior discount, can sell you medications for about three percent less than the discounted price through Medicare. “But wait,” you say, “I just checked the government web site and found that there were forty-four plans to choose from in the area. Surely, I can get good drug prices from one of the plans—but which one?”

Ay, there's the rub. If you choose the wrong plan, you're stuck with it for a year. If you don't make your choice in a timely fashion, you can be penalized. Even if you choose the “right” plan, your costs could be much higher for drugs next year if you don't spend that much on drugs. If your drug bill for the year is $225, you could be caught up in that vortex where you have to pay the first $225 out of pocket. Your premiums in the plan will cost about $420 for the year, so by paying the deductible to cover the cost of your prescription ($225) and the premiums for the year ($420), you will have spent $645 to cover the cost of your $225 worth of medicine.

Are the inmates running the asylum, or do we need to re-think our whole notion of health care delivery?