We all know — or should know — by now that the Medicare prescription drug benefit (Medicare Part D) was crafted with the needs and convenience of Big Pharma, rather than patients, in mind. That’s why it’s so unwieldy for the consumer.
The worst part about Medicare Part D is the so-called “doughnut hole,” described by the Wall Street Journal as “the notorious gap in coverage … where (beneficiaries) generally must begin paying the full cost of their medicines. The doughnut hole kicks in when total drug expenditures by the beneficiary and the plan reach $2,510.”
Another egregious element of Medicare Part D, which has gotten less attention, is private “pharmacy benefit managers” charging Medicare beneficiaries MORE for prescription drugs than they cost at the pharmacy! These middlemen are ripping all of us off, too, since the taxpayers are picking up most of the tab. And by charging inflated prices, they push Medicare beneficiaries into the doughnut hole sooner.
Medicare is trying to fix the problem, but in the meantime, advocates for the elderly are advising them to buy at least some of their drugs outside the Medicare Part D plan.
Advises the Wall Street Journal:
Medicare drug-benefit participants buying drugs should consider checking low-price sellers of generic medications, such as Costco Wholesale Corp. and Wal-Mart Stores Inc., to see if their retail prices are lower than those in the insurance plan.
That is what Len Steinberg of Scottsdale, Ariz., did, and he found that Costco’s retail price for his generic nasal spray was about half of the drug’s total cost under his plan.
Mr. Steinberg, a 73-year-old retired employee-benefits consultant, says he now pays cash for certain cheap generics at Sam’s Club and Costco, rather than using his drug coverage. That allows him to avoid the doughnut hole and continue receiving coverage for his more expensive branded medications, he says.
Another option, of course, is to buy your medications from licensed Canadian pharmacies, where prices are on average about 50 percent less than the same drugs at U.S. pharmacies.
Image source: Senior Focus
Drug addicts talk about having to “hit bottom” before they finally realize they have to do something about their problem. Are we about to see the U.S. healthcare system hit bottom?
Today, UnitedHealth Group, the nation’s largest health insurer, cut its earnings forecast and said it would slash 4,000 jobs. Bloomberg reports:
In the Medicare business for the elderly, for which UnitedHealth is the market leader, gross margins declined in plans that provide prescription drugs and specialized coverage for people with chronic diseases, the company said.
The company forecast that its overall medical loss ratio, the percentage of premium revenue spent on medical care, would increase to 82.5 percent for the full year, up from its earlier prediction of 81.3 percent.
How horrible — that premiums would actually go toward paying for medical care, rather than in some fat cats’ pockets!
The irony here is that Congress designed the Medicare prescription drug benefit precisely to line the pockets of pharmaceutical and insurance companies with government dollars — and these companies still aren’t making enough money to satisfy Wall Street.
How come? Well, if you want the ant’s eye view, it’s this, according to an analyst:
UnitedHealth no longer offers competitive, affordable products to the marketplace that people want to buy, especially with all their customer service, claims payment and provider relationship issues…
But if you want the bird’s eye view, it’s that the system is broken and is getting more broken every day.
Pretty soon, we’ll be at a point where ALL of us — even the pharma and health insurance industries — are miserable in the current “system.” And that’s when we’ll hit bottom.
Vicki Gottlich, an attorney with the Center for Medicare Advocacy, described some of the disturbing consequences of Medicare’s mind-numbing Part D prescription drug plan in a story by Ruth Mantell of Marketwatch:
The program’s complexities affect the ability of beneficiaries to understand the program, choose plans, pay premiums, benefit appropriately from the low-income subsidy, and utilize the exceptions and appeals process … Some analysts have concluded that having to choose among many options creates a burden on beneficiaries and increases their difficulty in making an informed and meaningful decision.
Gottlich added that Part D’s “complexity” makes it “ripe for marketing abuses,” and that the elderly can “easily fall prey to unscrupulous sales agents.” A frequent scam has been to tell beneficiaries that they are required to have a home visit, and then to engage in a hard sell at the residence.
This is only a taste of what seniors face with this complicated, error-filled program. Granted, no system is perfect, but the outcry of millions of seniors needs to be heard.
A new study says allowing Medicare to negotiate lower drug prices would save $20 billion per year.
Well, it ain’t gonna happen, after Big Pharma put its bought-and-paid-for politicians to work last week to stop proposed legislation. Here’s a nice analysis showing, point by point, how the bill’s opponents distorted the facts in their campaign against the proposal.
By the way, did you know that the cost of drugs has quintupled in the past decade? And that in 2005, Big Pharma’s profit was 16 percent of revenues — compared to only six percent for all Fortune 500 firms? These are just a couple of tidbits from Sen. Barack Obama’s statement after the Senate blocked the Medicare bill.
On April 1, CBS will air a “60 Minutes” expose on the impact of the drug lobby on Congress. CBS spoke with Congressmen Walter Jones, Dan Burton and others about the legislative session that voted the Medicare prescription drug bill into law. An excerpt:
“I’ve been in politics for 22 years and it was the ugliest night I have ever seen in 22 years,” says Jones of efforts by Republican Congressional leaders to persuade defecting Republicans to vote for one of the most expensive bills ever before the House. “The pharmaceutical lobbyists wrote the bill,” says Jones, who, with Rep. Dan Burton (R-Ind.), was among those defectors.
When they tallied votes, there were not enough to pass it, so the vote was kept open for longer than normal. “They’re supposed to have 15 minutes to leave the voting machines open and it was open for almost three hours,” says Burton.
“The votes were there to defeat the bill for two hours and 45 minutes and we had leaders going around … trying to twist [defecting Republicans'] arms to get them to change their votes,” says Burton.
“It was horrible,” Jones tells [Steve] Kroft. “We had a good friend from Michigan, Nick Smith (formerly R-Mich.) and they threatened to work against his son who wanted to run for his seat when he retired,” recalls Jones. “I saw… a member of the House, a lady, crying when they came around her, trying to get her to change her vote.”
The bill passed, extending limited prescription drug coverage under Medicare to 41 million Americans. According to Ron Pollack, executive director of Families USA, a non-partisan healthcare watchdog group, it purposefully allows drug companies to charge more by preventing Medicare from negotiating prices. As a result, one government agency will pay more for drugs than another will. “The [Veterans Administration] does bargain and they do it successfully,” says Pollack. “Medicare could do the same thing, but Medicare is prohibited from doing that as a result of this new Medicare legislation.”
Several lawmakers who worked on the bill have since joined firms that lobby for the drug industry, including the man who steered the legislation through the House, former Rep. Billy Tauzin (R-La.), who also chaired the House committee that regulated the pharmaceutical industry. Tauzin retired to become the president of Pharma, the drug industry’s top lobbying group — a $2 million-a-year post.
Says Burton, “When you’re pushing so hard for a bill that’s controversial and you have to keep the machine open for three hours to get the one vote necessary to pass it and then, within a matter of months, you go to work for the industry that’s going to benefit from it, it does cause you some concern.”
Now that’s an understatement.
It is great that “60 Minutes” is exposing Big Pharma’s influence over the laws that are made and enforced. As Jones put it, “the pharmaceutical lobbyists wrote the bill.” It is amazing that an industry can control the rules and regulations made to govern them. How long will the American people put up with this?
Full Story Here
The Schwitzer health news blog points out:
A study in Health Affairs shows that more than half of the nation’s uninsured are ineligible for public programs such as Medicaid but do not have enough resources to purchase coverage themselves.
In a Health Affairs news release, lead author Lisa Dubay, now a research scientist at the Johns Hopkins Bloomberg School of Public Health, said, “Sometimes you hear arguments that all but a small minority of the uninsured could either purchase coverage or are already eligible for assistance. But our study shows that the affordability problem is far more serious than that.â€Â
This study was released more than a week ago and I have seen very little news coverage of it. There are 47 million uninsured Americans. It’s the job of journalism to give voice to the voiceless, to comfort the afflicted and to afflict the comfortable. It ain’t happening on this issue.
Phil Daigle commented on the Healthcare Shopper blog:
This study goes a long way toward putting a number on the target for public healthcare assistance. There’s been too much shooting from the hip on both sides of the “uninsured problem”. Again it seems obvious that the children that remain uninsured should be the first priority.
Every uninsured American should be a priority; there’s no more time to waste.
From a Mother Jones interview with Ohio senator-elect Sherrod Brown:
MJ: What do you want to do on the Health and Education Committee?
SB: FDA reform  wrestling the agency away from drug company influence. In my 14 years in the House, I’ve seen a very good agency, the Food and Drug administration  one of the best public agencies in the world, frankly  turn into a shadow of itself because of drug company influence. I think the best way to fill the donut hole [the coverage gap in the Medicare drug benefit] is to negotiate drug prices. When you negotiate drug prices on behalf of 40 plus million beneficiaries, the donut hole begins to shrink.
Ezra Klein has a great post explaining why drugs purchased through the Veterans Administration are cheaper than those purchased by Medicare patients. He concludes with these eye-opening facts:
in 2003, The New England Journal of Medicine found the “socialized” VA better on all 11 metrics of care than fee-for-service Medicare …The National Committee for Quality Assurance, the gold-standard, found the VA the best health system in the country, beating out such star performers as John Hopkins and the Mayo Clinic. And an astounding 81% of Vets approve of their care, higher than Medicare, Medicaid, or the private sector.
A commenter on Klein’s post adds:
Better prices based on guarantee of patients is the current basis for every private health insurance company. If United Health, Blue Cross, stc can all demand and get price cuts (and kick-backs) from pharmacuetical companies based solely on numbers of guaranteed patients who will be forced to use their products, why can’t all of US? Big pharma really doesn’t have a choice here, play ball or pack up and sell in another country, they’ll play ball, Ecuadorians can’t afford Lipitor.
Amen.
CanadaDrugTalk.com posts this quote from David MacKay, an international pharmacy expert and consultant:
The bottom line in 2007 is that enrollment costs are going up substantially, drug coverage is declining and the brand name coverage in the doughnut hole is being eliminated… Medicare D is an insurance program, not a benefit. As consumption increases, so too will cost. The changes in 2007 clearly demonstrate the limitations of the program. Therefore, seniors are wise to re-evaluate their plans and consider online Canadian pharmacies… especially since Customs seizures are no longer an issue.
MacKay is also quoted in this Toronto Star piece on Canadian imports.
