Part D? It wasn't supposed to help YOU
Saul Friedman
Newsday
October 29, 2005
Long Beach widow Eula P., 81, writes that she’s neither “stupid nor senile,” but she still can’t figure out the new prescription drug benefit for Medicare beneficiaries. “What were the people in Washington thinking?”
Well, if you remember why Texas Congressman Tom DeLay and his fellow Republicans hammered the drug bill through the House under cover of night, you’ll also understand why, even at this late date and despite the government’s hype, the program remains a puzzle - especially for the sick and elderly population it’s supposed to serve.
First, the new law was more a gift to the insurance and drug industries than it was a benefit for Medicare enrollees, because most of the estimated $720 billion spent under the new law will go to those industries.
Furthermore, the law undermines Medicare as a government health program
by requiring enrollees to buy private insurance in which Medicare plays no role. And for the first time, the Medicare principle of universality was lost when a means test was instituted for low-income beneficiaries.
Thus, while the benefit is called Part D, it is not really a Medicare benefit. As the nonprofit Center for Medicare Advocacy notes, “Medicare drug coverage will be provided by private health insurance companies. Not by the Medicare program. This is different from how Parts A and B of Medicare work.” Indeed, each of the dozens of insurance plans can set and change its benefits.
Next year, beneficiaries will be locked into their choice. But the insurers can change the drugs they offer or require that you use doctors, hospitals and labs in their network. And, like HMOs of the past few years, they can raise premiums, cut benefits or get out of the business if they decide they’re not making enough profit, leaving beneficiaries scratching for coverage. Medicare will be powerless to take action against an offending company.
There are 46 different plans offered in New York alone. The Medicare Website, which is supposed to calculate your savings under each plan, bases its figures on monthly premiums as low as $4.10 in New York.
But most premiums are considerably higher. The yearly deductible is $250, and there is a huge gap in coverage (the “doughnut hole”), during which most people will be stuck with 100 percent of their drug bills. And while original Medicare is valid nationwide, Part D plans may not be. No wonder there is confusion over a profusion of choices and a fragmented system.
The most frequently asked question comes from some of the more than 350,000 seniors who are members of New York’s Elderly Pharmaceutical Insurance Coverage, or EPIC plan. They ask, “If I am satisfied with EPIC, do I need to sign up for Part D?” The answer at this writing is no, because both the EPIC fee and deductible plans are “creditable” coverage under the law, which means they are considered at least as good as Part D. So you will not be penalized if you don’t sign up during the initial enrollment period, then change your mind later.
An EPIC spokesman notes, however, that low-income beneficiaries who qualify for extra help will have their EPIC annual fees waived if they join one of the Part D plans. And their Part D deductible and premium will be negligible.
But there may be an added advantage to having both EPIC and Part D. According to EPIC, its plan will “wrap-around” Part D. Thus, if EPIC members sign up for a relatively inexpensive drugs-only Part D plan, EPIC will pay for costs not covered by Part D, including the co-payments (25 percent), the yearly deductible ($250) and even the “doughnut-hole” gap in coverage, less any EPIC co-pay or deductible.
To clarify another issue raised by readers, if they get their drugs from their current HMO, through their VA coverage, retiree insurance, or supplemental insurance, and if the coverage is “creditable” - at least as good as Part D - they will be so notified by their insurer, and they need not change. But if they have no drug coverage, they should sign up for at least one of the drugs-only Part D plans, or face a stiff penalty after May 15.
The most troubling potential consequence of the fragmentation and privatization of Part D was exemplified by a penned note from 65-year-old Patricia C., of Long Beach. She lives on $720 a month and has been getting her drugs from Medicaid for 20 years. Now, as of Jan. 1, she’ll be shifted to one of the Part D plans, although she doesn’t know which one to choose, and she can’t afford the premium or deductible. (The government will pick your insurance carrier unless you do.)
Fortunately, people who are eligible for both Medicaid (a program for the very poor) and Medicare are entitled to get their Part D coverage with no premium, no deductible and no doughnut hole gap in coverage. But what sort of system requires a very old, very sick person who has depended on Medicaid, to go shopping for new insurance? More than 6.4 million Americans on Medicaid are to be shifted to Part D coverage on Jan. 1, a tidy windfall for the insurance companies.
The Manhattan-based Medicare Rights Center reports that many of these beneficiaries, whose lives depend on uninterrupted medication, will face
potentially catastrophic consequences if even a small percentage slip though the cracks during the transition. “The poorest, sickest and oldest Americans face grave risk of losing their life-saving medications once the clock strikes 12 on New Year’s,” said Robert Hayes, president of the center. He urged the Bush administration to extend the time of transition beyond Jan. 1.
Write to Saul Friedman, Newsday, 235 Pinelawn Rd., Melville, NY, 11747-4250, or by e-mail at saulfriedman@comcast.net.