Medicare drug disaster

http://www.socialistworker.org/2006-1/573/573_07_Medicare.shtml

THE GREAT hidden scandal in Washington is the disastrous debut of the Medicare
prescription drug benefit.

When it was pushed through Congress in 2003, its Republican sponsors--along with
plenty of Democrats--promised that recipients of the federal government?s
Medicare health care program for seniors would finally be protected from
skyrocketing drug prices.

But even with two years to get ready, the new system broke down following its
January 1 launch date. Tens of thousands of Medicare recipients have showed up
at pharmacies and discovered that their old drug benefits were cancelled, but
the new program doesn?t have them listed. More than two dozen state governments
have taken emergency action to try to help seniors being forced to choose
between buying food and paying for prescription drugs.

CHRIS MURPHY is a social worker in Rhode Island who aids senior citizens and
low-income families in accessing federal and state pharmaceutical assistance
programs, as well as volunteer opportunities, entitlements and other social
service programs.

Here, Chris gives a front-lines report on the catastrophic launch of the
prescription drug benefit--and explains that this ?reform? legislation was
written by drug companies to pump up their profits.

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DURING THE first weeks of the new Medicare Part D program, the many people who
were supposed to benefit--low-income seniors and disabled individuals--were left
out in the cold, unable to receive the promised coverage.

Last week in Rhode Island, there were over 2,000 claims, valued at $125,000,
where the federal coverage process failed. After pharmacists found ?no
coverage-rejected? on their computer screens, and people had to pay the full
amount with their own funds--or do without--the state stepped in with an
emergency order by the governor.

Those whose coverage was rejected got their prescriptions. Now the state must
find a way to recoup the money. The same emergency measures were taken in other
states. Meanwhile, the Bush administration ordered Medicare drug plan insurers
to cover 30-day refills of medications for seniors, with co-pays of no more than
$5.

This step was needed to bail out a program that the federal government and the
insurance industry had more than two years to plan for. In any other industry,
people would have lost their jobs over such a massive failure.

- - - - - - - - - - - - - - - -
MEDICARE PART D is now part of the federal health insurance program for seniors
over 65 and individuals who are disabled.

Prior to 2006, Medicare consisted of Part A and Part B. Part A covers inpatient
hospital care, skilled nursing facilities and hospice care. Part B covers
services provided by doctors, outpatient hospital services, home health and
other medical and hospital services.

Part D was supposedly created by the 2003 law to offset rising prescription
costs and the increase in out-of-pocket spending by recipients. But the most
important problem with the plan is that drug costs aren?t covered through the
Medicare program.

Instead, recipients have to sign up with private plans offered by insurance
companies. As one 82-year-old rightly put it in the Nation magazine, ?The
purpose of the plan is to bring more customers to the drug company trough, at
top-dollar prices.?

A participant in Med D must pay a $250 deductible, and then 25 percent of costs
up to $2,250 in total drug costs for a year. That?s $750 in out-of-pocket
spending to this point. Then the dreaded ?donut hole? kicks in, and there is a
$2,850 gap where recipients must pay everything. There is no coverage at all
until out-of-pocket expenses reach $3,600.

Medicare Part D covers 95 percent of further expenses. But by this point,
seniors living at a poverty-level income will be spending 41 percent of their
income on prescription drugs, according to an analysis by Families USA, a health
care watchdog group.

Before the New Year, my office was bombarded with phone calls, and colleagues
were asked to provide answers to a myriad of questions. ?Why should I sign up
for this program if I?m healthy now?? was one. I would explain that you have
until May 15 to sign up for this ?voluntary? program, or else you face a 1
percent compounding penalty for every month you are not signed up (unless you
somehow had a private pension coverage which no one coming to us had).

Seniors complained that they shouldn?t face a penalty and couldn?t comprehend
why this was a part of the program. I couldn?t either--it seemed like late
charges by an overzealous credit card company.

Prior to the launch on January 1, front-line providers were told many things
about Medicare Part D, but the people doing the explaining didn't fully
understand the plan, and so neither did the pharmacies. As one senior put it to
me, ?If CVS, which is dealing with dozens of people daily on this, is confused,
how is anyone supposed to know what is going on??

Because Medicare Part D sends seniors to private insurers, there are more than
40 plans to choose from, with price ranging from $5 to $70 a month depending on
the company, the extent of coverage and the state. To learn which plan is the
right one for the individual can be a daunting task, especially when over half
of all senior citizens haven?t been on the Internet, and people who called drug
or insurance companies often got placed on hold and then disconnected after
holding for 15 minutes.

After January 1, when seniors went to pharmacies expecting to be covered, tens
of thousands discovered that they weren?t. The insurance companies were late in
getting people on the list of those who were covered under new plans.

For many seniors and disabled individuals, this meant having to choose between
food, paying their rent and purchasing their prescriptions.

One woman whose father had to pay close to $200 for a prescription the other day
that he didn?t even use broke down crying because the last few weeks had been so
stressful. Her father didn't speak English, and dealing with Medicare Part D and
other state and local pharmaceutical assistance programs was too much.

- - - - - - - - - - - - - - - -
IN MY opinion, the people reaping the benefits on this are the pharmaceutical
companies, the HMOs, big corporations, members of Congress--all sorts of people
other than those the law was supposedly designed for: senior citizens and
disabled individuals.

The drug companies are making money in all sorts of ways.

One of the worst aspects of Medicare Part D is that the law directly prohibits
negotiating group purchasing agreements and volume discounts with the drug
companies. This prohibition will add billions to the drug company profits.
Currently, the Veterans Administration and the Department of Defense save over
40 percent because they negotiate wholesale prices for drugs.

Then there are the ways that the plan supports name-brand drugs. Say that
Company X makes a medication and sells it for $100--10 times the cost of a
generic drug, which would be just as effective for most people. Normally,
someone would choose the cheaper generic for $10. This would leave them paying a
$2.50 co-payment, and the balance paid by the Medicare drug plan.

But if Company X kicks in the 25 percent co-payment, the more expensive brand
name becomes free to the patient--but with Medicare paying a $75 bill. Since it
can cost as little as a $1 to make the drug, paying the $25 co-payment is well
worth it, since Company X makes a profit of $74.

Drug companies aren?t the only part of Corporate America benefiting. According
to the Boston Globe, defense contractor Raytheon will save more than $170
million by using Med D to shift prescription costs previously paid for retirees
onto the taxpayers.

The cost to the federal government will be huge. In fact, Richard Foster,
Medicare's chief actuary, apparently lied to Congress about how much Medicare
Part D would cost--because he was threatened with firing if he told the truth
that the real projections were hundreds of billions more than his agency
admitted at the time.

The other day, a woman asked me about signing up for Medicare Part D. She didn't
understand her card or what was sent to her because she had already signed up
for the program. It makes me wonder how a homebound individual--with no Internet
access, who may or may not be receiving all their mail, who may have mental
health issues, and with little or no support system--is supposed to use this
program.

I let people know if they complain about this program that it is the result of
capitalism, and under socialism, everyone would have universal health care.

http://www.socialistworker.org/2006-1/573/573_07_Medicare.shtml

Big Brother is watching you
http://www.socialistworker.org/2006-1/573/573_08_BigBrother.shtml

Alan

"Can't you see we're still here,
Can't you see we're still here,
Singing loud; Singing clear,
We shall not go under,
We're still here."

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