Medicare Part D - Time for a New Direction
By Congresswoman Debbie Wasserman Schultz
Medicare Part D, the nine-month old prescription drug program in Medicare, is broken and in my opinion, needs to be scrapped, and replaced with a program that puts seniors' interests first. But before I get into why I believe the drug program is broken, let's take a brief look back at how we got to where we are today.
Two years ago, the Republican Congress passed legislation that would set up a prescription drug program in Medicare. But this was like no ordinary Medicare program -no, this prescription drug program was set up in several peculiar ways.
1. It placed the interests of drug companies before those of seniors by prohibiting the government from negotiating a lower price for medication, never mind that the government had been successfully negotiating lower prices for veterans' prescription drugs for years.
2. Rather than expand the Medicare program to include a prescription drug plan, the legislation was tailored to allow private companies to set up their own prescription drug programs that would then be paid for by Medicare, along with premiums paid for by the consumer.
3. Protections were written into the legislation that once again, placed the pharmaceutical companies ahead of seniors by allowing plans to change coverage at will, but allowing seniors only one opportunity to change plans each year.
4. It set up a limited enrollment period and placed penalties upon seniors who didn't sign up at their first opportunity.
5. It set up a large "doughnut hole" in the plans, that would allow for some coverage of medications and then a huge gap in coverage until the participant exceeded a certain amount of "out-of-pocket" expenses, all the while still paying monthly premiums.
All in all, this was not what I would consider a "consumer friendly" prescription drug benefit, especially given that it locks-in profits for large drug and insurance companies.
There are several reasons why the Medicare Part D programs have been making news again, but let's focus on just two of the most egregious for right now.
1. The "doughnut hole." Unfortunately, I have been hearing complaints from more and more seniors who can't believe that after all of the work they went through to find a prescription drug plan; they now have to pay 100% of the cost of their medication until they exceed their annual out-of-pocket expenses. Indeed, many of the seniors I have spoken to are wondering if, between the monthly premiums for the prescription plan, coupled with the co-pay for their medication and now the doughnut hole's out of pocket expenses -they are wondering if they are even going to break even. My office has heard from several seniors that said "I know that someone is making money off of this, but I don't know that I am saving anything."
Mismanagement. I am very concerned about the continued problems facing Medicare and Social Security over their payment system. The plans allow seniors to deduct their Medicare Part D premiums from their Social Security checks. At the advice of many Medicare counselors, and just because of the apparent simplicity of this system, a lot of seniors signed up for this "direct-debit" option. Enter mismanagement recently 230,000 seniors received checks from Medicare because of an overpayment. The problem, it turns out, is that there was no overpayment and yet 230,000 seniors received checks, some for over $300, that the government now says it needs back. But the problem doesn't just stop there. A recent Kaiser Family Foundation report on Medicare Part D found that many seniors deducting their Part D payments from Social Security had received notices that their payments had not been received. For some seniors, the money was never deducted, for others, the money was deducted, but it never reached their plan provider. Worse yet, some of these seniors were being threatened with cancellation by their plan and were being turned over to collection agencies. Needless to say, these seniors have been left with a nightmare of phone calls between Social Security, Medicare and their private plan provider, attempting to straighten out the billing problems themselves. Others still, have been receiving drug coverage, but the deductions haven't occurred from their Social Security and they now find themselves with bills for six or nine months worth of premiums, bills that some seniors cannot pay.
It doesn't have to be this way. It should never have been set up this way. It MUST be changed.
I can't stress this enough. We must fix this program.
Seniors deserve prescription drug coverage as a part of Medicare. In most cases, prescription drug treatment prevents more expensive and invasive procedures.
But seniors also deserve a prescription drug program that puts their interests above those of big drug and insurance companies.
The other side will say: "but a government run Part D program would amount to price caps," or that competition is needed to provide the best access for seniors.
Well, most seniors I speak with simply want a system that allows them to have access to affordable prescription drugs and they don't understand why Canadians have access to the same drugs as Americans, but at a fraction of the cost.
Earlier in this column, I mentioned that our government already runs a successful prescription drug program. This program provides medication for about the same prices as those found in Canada, by negotiating for lower prices with the drug companies. That program is run by the Department of Veterans Affairs (VA).
I'm not saying the VA program is ultimately the solution for America's seniors, but I do know that the existing Medicare Part D program is unnecessarily complex, anti-consumer, and mismanaged.
It is time for a new direction; one that places the interests of seniors first.
Despite its problems, until we can fix Medicare Part D, you still may find that a plan might save you money on your prescriptions. The next opportunity to enroll is November 15 - December 31, 2006. This will be your last opportunity to enroll for coverage during 2007. Once you enroll, make sure you check your payment records to insure that the correct amount is being deducted, or better yet, skip the deduction from Social Security and pay directly for the plan yourself.