Блог Анкара

In This Chapter

^ Improving Part D coverage as you know it ^ Overhauling Part D completely

Mir art D has always been a political hot potato. Over time, it’s tended to V Scorch the fingers of folks who support it and those who oppose it. Why? Because it’s an imperfect, overcomplicated benefit that’s hard to support wholeheartedly. Yet it’s allowed millions of Medicare beneficiaries to buy prescription drugs more affordably than they ever could before, which makes it very hard to oppose wholeheartedly, too.

But of course, anything can be improved. In this chapter, I present ten proposals with the potential to change Medicare prescription drug coverage either in small or more sweeping ways. At the time I’m writing this book, these proposals are only suggestions put forward by consumer groups, policy experts, and/ or members of Congress. But they’re worth keeping an eye on.

SIMplIFyINg Plan ChoICes

Having a multitude of choices supposedly allows people to choose the Medicare private health or drug plan that fits them best. But in practice, it doesn’t necessarily work out that way. Faced with a dizzying number of plans, all with different costs and benefits, people are often too overwhelmed to make careful comparisons. As a result, many Medicare beneficiaries don’t make informed choices at all.

What can improve this situation, while still keeping the principle of choice? One idea that’s gained traction among some lawmakers and consumer advocates is to standardize and simplify plan choices. Medicare beneficiaries would be offered a certain number of standard plans — maybe ten or fewer — that each provide a different benefit package. Each plan would be sold by competing insurance companies for different premiums, according to the level of benefits. Sound

Familiar? It’s modeled on Medigap supplementary insurance, which supporters of the proposal point to as a precedent. The Medigap market was a free-for-all until 1992, when Congress reformed it by introducing ten standardized policies. Choice and competition were preserved, but consumers were able to compare benefits more easily.

Standardization may well simplify choices among Medicare health plans’ medical services, but it’s difficult to see how it’d work on the prescription drug side. One snag is that the best drug plan for consumers depends less on its design and premium and much more on the specific prescription drugs that each person takes. Part D has far more variables in it than Medigap.

Abolishing the Asset Test for Extra Help

More than 2.5 million Americans with limited incomes would qualify for Part D’s Extra Help benefit if it weren’t for the asset test, which takes savings as well as income into account when determining eligibility. Consumer groups protest that the test penalizes individuals who’ve managed to save a little for their old age when they’ll be living on low, fixed incomes. The chances of abolishing the asset test entirely aren’t high, because doing so would add billions of taxpayer dollars to the cost of Part D. But bills have been introduced in the House and the Senate to raise the asset limits to a degree that would allow many more people whose incomes qualify them for Extra Help to actually get it. Some of these bills would also exclude individual retirement accounts and 401(k)s from being counted as assets.

Allowing Medicare to Negotiate Prices

It was obvious from the get-go that a prescription drug benefit in Medicare would eat up a lot of taxpayer money, so you’d think Congress would’ve done everything possible to keep drug prices in check. Yet the 2003 Medicare Modernization Act specifically prohibited the government from negotiating Part D drug prices directly with the manufacturers. Instead of using Medicare’s huge bargaining clout to keep costs down, negotiation was left to individual Part D insurers. Proposals to reverse the ban have many powerful supporters (like AARP and the American Medical Association) and opponents (like the pharmaceutical industry and, latterly, the Bush administration).

In January 2007, the House of Representatives overwhelmingly passed a bill to allow direct negotiation for drugs in Medicare, but a similar bill failed in the Senate. Look for more attempts — and big controversy — in the future.

Eliminating the Doughnut Hole

For consumers, the doughnut hole (also known as the coverage gap) is the most unpopular aspect of Part D. But although many lawmakers have railed against it, no one has seriously tried to move legislation to fill in the gap and give year-round coverage to everyone enrolled in Part D. That’s because doing so would cost an estimated $450 billion over ten years. Abolishing the doughnut hole is a popular enough cause for many lawmakers to continue proposing it. But given the hard choices of raising taxes, cutting benefits in other programs, or keeping Part D’s doughnut hole, eliminating it in reality seems remote unless the whole program is overhauled.

Improving Access to Needed Drugs

Allowing plans to impose restrictions on some drugs (through cost-cutting measures such as prior authorization, quantity limits, and step therapy), and requiring consumers to go through the hoops of the exceptions and appeal process to get those drugs, burdens people unduly and discourages many from requesting the drugs they need, according to many consumer groups. No concrete proposals to simplify this system have been advanced. But one suggestion, for Medicare to require plans to inform enrollees at the point of sale why a drug isn’t covered and how they can request coverage, would lessen many customers’ bewilderment at the pharmacy and may encourage them to file for an exception more quickly.

Cutting Medicare Advantage Subsidies

The 2003 law that created Part D gave Medicare health plans large subsidies to persuade private insurers into the Medicare fold. The extra payments, in turn, allow the plans to offer richer benefits to their enrollees than traditional Medicare offers — an average value of $1,100 more in 2008 for each enrollee. The plans defend this lopsidedness as a boon to people who can’t afford Medigap, whereas critics condemn it as a stealth agenda for essentially privatizing Medicare. Certainly, the extra payments add to Medicare’s overall costs and therefore increase the Part B premium for everyone in Medicare, not just beneficiaries in the plans. In 2008, many members of Congress called for a halt to the subsidies and succeeded in reducing them slightly. But abolishing them would probably cause many Medicare Advantage plans to raise costs, reduce benefits, or withdraw from the market — a tricky political issue for lawmakers with constituents in the plans. Many in Congress still eye the subsidies — estimated to cost $54 billion over five years — as a pot of gold to pay for other priorities. So stay tuned: This issue isn’t going away.

Legalizing Drug Imports from Abroad

Bills making it legal for American consumers to buy prescription drugs from Canada for their own use have been signed into law twice in the past decade. But in each case, the legal language required that the Secretary of Health and Human Services guarantee the safety of drugs imported from other countries, which no secretary has so far been willing to do, so the laws never went into effect. With many supporters on both sides of Congress, the issue will continue to be pressed. But drug pricing is complex, and experts say competition from abroad may not significantly push down prices in the U. S.

Creating a Government-Run Plan

One proposal floated by some Democrats is to create a government-run Part D plan to compete with private plans on a not-for-profit basis. It would allow Medicare to negotiate drug prices for its enrollees and provide "a consistent, uniform drug benefit" available to anyone, according to the House Ways and Means Committee chairman, Rep. Pete Stark. Just as people can choose between traditional Medicare and a private plan, Stark said, they "could remain in the Medicare drug plan or choose to switch to a private option."

Throwing Out Part D and Starting Over

For the severest Part D critics, getting rid of the program and starting over has been a dream since it first became law. But unless a general election throws up a Democratic president and huge Democratic majorities in Congress, it ain’t gonna happen. Even so, overhauling the system would be a huge challenge in the face of Part D’s established infrastructure and opposition from the health insurance industry. More likely, changes to Part D will be made bit by bit over many years.

Bringing in Universal Health Insurance

With 44 million Americans uninsured, and costs rising even for those who have insurance, the need to make health coverage affordable for everyone is a huge political issue. Of course, there’s no consensus on how universal health coverage can be achieved. A wholly government-run health system? A mix of public and private systems? A kind of Medicare for all? Tax breaks for folks who buy health insurance? Who knows? We’ll have to wait to see if whatever system is decided upon (if any) has an impact on Medicare and

Part D.

Part VI