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Return to Expedite-Rx Home Page THE "Signed, Sealed and Delivered" MEDICARE DRUG BENEFIT – Doin’ The Math Tom Curb, R.Ph., Consultant (While some debate that Congress, the Administration, the drug industry, AARP, and US mail-order PBMs conspired to progressively dismantle Medicare, there is no denying that as "horse traders" the swing-vote Mug-Wumps that yielded to lobbyists and political pressure would make good "ballerinas". To justify welching on the government’s guarantee of equitable healthcare for at least two generations of taxpayers that pre-funded full Medicare benefits for themselves (and also funded Medicare’s initial recipients), these "sharpies" tell us that giving away those paid-up "health insurance policies" to get a puny, but costly prescription drug "benefit" was a "good swap" - claiming "it’s a good starting place".) In questioning how "two steps back and (maybe) one step forward" could possibly be a "good starting position", I put a pencil to the Medicare drug benefit to see how I might fare after all the lobby money and back-room politics accomplished their goal. Yep – It’s still a two-phase program: Ripoff I and Ripoff II. (1) Ripoff Phase I begins in 2004 as a "Medicare Discount Card" similar to the one proposed a few years back. (That earlier scheme also offered no real savings to recipients and was "buried" by the courts.) This "new" Medicare cash card is described as an interim program in which we Medicare beneficiaries can purchase a drug-discount (cash) card beginning in 2004 for a one-time nominal fee (and) that would provide a 10 to 15% discount. This Medicare cash card will be discontinued in 2006; therefore, between 2004 and 2006, I will be responsible for paying 100% of the cost of my drugs – but I might receive an "estimated average 10 to 15% discount" from a government-designated pharmacy. ("Two steps back" - Hold on! I already have a discount card that can document across-the-board savings averaging 29% at local pharmacies. And, for generics (accounting for one-half of all prescriptions filled in my discount plan – its savings average more than 60%! Also, if I want to save some really serious money, because of the FDA’s permissive import policies, I can have my expensive brand-name drugs mailed directly to me from outside the US. If I want to get them from Canada, my existing card program coordinates my Canadian and my local US pharmacy purchases – giving me special safety features - and I can get out-of-pocket savings averaging about 50% on my most expensive brands!) (2) Ripoff Phase II is a "Funded (insured) Benefit" that begins in 2006. The bill says that I will be offered government-subsidized drug coverage beginning in January 2006 for a $35 monthly premium. After a $250 annual deductible, Medicare (might) pay 75% of the next $2250 in purchases. But, if I need more medicine after that, I pay 100% of my prescription costs for the next $2850. Beyond this, Medicare (might) cover about 95% of my drug costs. "One step forward?" - This means that each year – under the best of circumstances - I pay $670 up front ($420 in premiums and a $250 deductible) plus one-forth of my next $2250 in prescription costs - or $562.50. After that I will have to pay all (100%) of the next $2850 in drug costs. So, if my prescription cost in a year totals $5350 (at Medicare’s designated pharmacies’ prices), my out-of-pocket expense will be $4082.50, or more than 76% of the total cost of my medications – giving me less than a 25% Medicare "insurance" subsidy. For this, US taxpayers must pay 400 BILLION dollars? (At these numbers, my current discount card averages savings more than three times as great as the Medicare Discount Card and twice as great as the insured Medicare benefit – and Medicare doesn’t contribute a nickel to it.) "A really scary possibility" - If, as implied, the government lets its "chosen" US mail-order PBM’s provide this Medicare drug "benefit", we might end up like folks in the Illinois SeniorCare program. Although that Illinois plan paid up to the full amount of its members’ benefits to the PBM, members received only a fraction of that amount in prescription benefits. This was due to the PBM’s "spread pricing", where it charged the benefit plan a higher prescription price than it paid the pharmacy provider. Of course, the mail-order PBM (a government "annointed one") kept he difference! FLASH! - Hidden in the bill’s fine print are at least four "Zingers". "Zinger" number one says that unless my drugs are "formulary preferred" (that’s "PBM-speak" for drugs that manufacturers will generally give PBMs a kick-back to use), Medicare will contribute nothing, nada, zilch, zero to the cost of my prescriptions. To add insult to injury, while I can only change a PBM annually, the PBM can change its formulary whenever it wants to – possibly leaving my drugs’ coverage "high and dry". "Zinger" number two prohibits my buying Medigap-type insurance for my copay obligations, and then to force me sign up early for the drug program, "Zinger" number three assesses me a progressive 1% penalty for every month I defer sign up after program start up. A fourth "zinger" denies the government the ability to negotiate volume discounts that could lower my costs or expand my covered benefit. Once again, it’s obvious that the
long-anticipated (and often promised) Medicare drug benefit is just another government
subsidy – this one being a 400 billion dollar windfall to the big US mail-order
PBM’s and the multinational drug cartel. There’s no one else to pay for this
gigantic pork-barrel project but US taxpayers and confused, disenchanted Medicare
recipients. Oh yeah, since there is now
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