Transcript Understanding your Medicare Options What to look for in 2007

The Best Medicine:
A Drug Coverage Option
Under Original Medicare
Original Medicare is Social Insurance
Under Original Medicare, there is:
One Premium
One Benefit Package
One Risk Pool
All share the cost of caring for the
sick.
Original Medicare is Social Insurance
Because most medical providers accept
Medicare, enrollees can go to almost any
doctor or hospital in the country for
medical services using their red, white,
and blue Medicare card.
Part D is Different
People with Medicare purchase coverage
from private companies.
Each plan has:
Different Premiums
Different Benefit Packages
Segmented Risk
Enrollees in other plans have access to
different drugs at different costs,
available at multiple pharmacies.
Part D is Different: The Doughnut Hole
Part D has a Coverage Gap (“Doughnut Hole”)
Begins at $2,510 in total drug costs
Ends at $4,050 in out-of-pocket drug costs
(Source: Kaiser Family Foundation)
Problems with the Privatized Benefit
 Higher Costs for All Americans
 Taxpayers Pay More:
 Part D plans have failed to negotiate drug prices on par with
the VA, Medicaid, or Canadian government.
 Drug coverage through private plans carries higher
administrative costs than the provision of medical coverage
under Original Medicare.
 Enrollees Pay More:
 In the coverage gap, enrollees generally pay full price for
covered drugs. Prices do not reflect manufacturer rebates or
discounts negotiated by their Part D plans.
 Part D plans pass on manufacturer price increases directly to
consumers.
Problems with the Privatized Benefit
 Coverage Gaps: Access to Medically Necessary
Drugs Is Not Guaranteed.
 Drug plans save money by reducing drug costs and
limiting access to drugs, not by improving health.
 Formularies (lists of covered drugs) vary widely and
are subject to change, making it hard for prescribing
doctors to comply – and ultimately harming patients.
 Formulary exclusions and restrictions interrupt
patients' drug regimens, reduce compliance and can
result in patients taking less effective drugs.
 Enrollees often need to appeal for exceptions to
coverage, a cumbersome process that is often
obstructed by private drug plans themselves.
Problems with the Privatized Benefit
 Instability:
 Plans can change formularies, cost sharing and
premiums throughout the year.
 Every year the coverage gap widens.
 Drug prices go up all the time.
 Low-income people with Medicare are randomly
reassigned to different plans every year (1.15
million reassigned in 2008).
Problems with the Privatized Benefit
 Consumer Confusion and Marketing Fraud
 Every Part D enrollee is a marketing lead for
insurers selling private Medicare health plans.
 A confusing and unstable benefit makes consumers
– particularly limited English speakers or those with
dementia or cognitive impairments – vulnerable to
abusive and deceptive marketing.
 Consumers do not have the option of enrolling in a
standardized benefit.
Proposed Solution: Part D Under
Original Medicare
 S.2219/H.R. 3932: Medicare Prescription Drug
Savings and Choice Act of 2007.
 The bill creates public option to compete in Part
D marketplace and would:
Improve Access to Necessary Drugs. The
formulary (list of covered drugs) would be based on
clinical evidence and provide a channel for
consumer friendly appeals.
Lower Prices. Medicare would use broad leverage
to negotiate lower drug prices with pharmaceutical
companies.
Stabilize Coverage. With a stable year-to-year
choice, consumers could stick to the public option
for years without seeing their benefit change.
Eliminate (Reduce?) the Coverage Gap
Passage as part of Comprehensive
Health Reform in 2009
Medicare reforms must be part of the
comprehensive health reform.
The Public Option under Democratic
health proposals is modelled on
Medicare. The model needs fixing:
Medicare must become an integrated
benefit (including drug coverage).