Medicare, the insurance system for folks 65 and older, is about to get another addition tomorrow to provide prescription drugs to enrollees. There’s only one problem: it’s a complete disaster, and should be an embarrassment to every Congressperson that supported it. The following is an attempt to make sense of Medicare Part D in all its bureaucratic glory. I’m trying to write at a level anyone can understand, so you, or your parent, or your grandparent can understand it. It is not simple, and getting frustrated and confused is not a sign of stupidity.
A little background: Medicare has a couple parts. There’s Part A, which covers hospital care, and is pretty much automatic when the clock strikes midnight on your 65th birthday. There’s also Part B, which covers doctor visits, and costs those that signup for it $78 per month. Almost everyone has Parts A and B. There’s also Medicare Part C, which was passed in 1997 by the Newt Gingrich Congress, which allows people to enroll in an HMO for their Medicare, which can provide them with prescription drugs. (AKA Medicare Advantage, Medicare+Choice.) It could be its own post, so I won’t delve too far. Now, most folks love Parts A and B, which, not coincidentally, most people have. You turn 65, you check a box on a form, send it in, and you’re covered if you go to a doctor or have to be hospitalized. Easy as pie. Unfortunately, Medicare didn’t cover drugs, which are commonly needed by seniors, so the people said “We need drug coverage.” And All Was
But this new Medicare Part Disaster is no simple box checking. A senior can’t just say “Yes, I’d like cheaper medications,” and then the government does that whole “Helping the People” thing, because that’s the whole reason the People wanted the government in the first place. Medicare Part D requires a senior to compare plans–up to 85 in one area–and choose one based on a number of different factors and numbers. (It should be noted that this system was made under the guise of choice–the bill was heavily influenced by lobbyists. Take a second and ask yourself about the choice: do you honestly care which company provides your medications? Probably not. You just care that you can get them cheaper and have access to them when you need a refill.) You might think that there’s no precedent for such a simple, straightforward plan without the bureaucratic nightmare, but it’s not the case. There’s at least two: the Veteran’s Affairs hospital system and the state-run Medicaid program (which provides insurance for the very poor). These systems are not perfect, but their bureaucracy causes headaches for administrators, not for patients. Also note this: the law that made Part D specifically forbids Medicare from using its bulk purchasing power to get cheaper costs on medications for patients, but Medicaid and the VA both do this, too.
So how is this Medicare Part D thing supposed to work? In a perfect world, a person picks a Prescription Drug Plan (PDP) from one of many offered by different companies. That PDP pays for part of their drugs, after the senior pays for some as well. The PDPs differ on how much you pay per month, how much you pay up front, how much you pay per drug pickup, which pharmacies you can get the drugs from, etc. As you can imagine, if you have multiple drugs, and your spouse does too, it can be a total nightmare. But wait Vanna, there’s more: our nifty little terror here has another catch. For the first $2,250, you and Medicare split the drug bill (Medicare pays 75%). After that, for the next $2,850 of drug costs, you, the patient, have to pick up the entire tab. Once $5,100 is reached ($2,250 + $2,850), Medicare kicks back in, paying 95%. People call this donut coverage; you get to eat a bite until you get to the middle, then you get nothing, but then you get donut again once (if) you get to the other side.
Seniors are completely confused by this Medicare Part D. (And if you’re even still reading, aren’t you too?) It’s almost to the point that Jeff Foxworthy could do his redneck routine: “If you’re 65 and have recently pulled out your last remaining hairs, you might have Medicare Part D.” You have people with advanced degrees not able to make sense of it. Heck, I have a background in health policy, I’m two years away from being a doctor, and it’s taken me a good while to figure it out. If you don’t believe me, see Medicare complexity may scare off seniors or Confusion Is Rife About Drug Plan as Sign-Up Nears. Plus: A classic “screw you, seniors” quote from Michael Levitt, Secretary of Health and Human Services, who oversees Medicare: “Health care is complicated. We acknowledge that. Lots of things in life are complicated: filling out a tax return, registering your car, getting cable television. It is going to take time for seniors to become comfortable with the drug benefit.” Mikey, Mikey, Mikey… those things are complicated, but they shouldn’t be. That’s no excuse.
I hesitate to even recommend the Medicare website, as it’s its own disaster, but I don’t like most of the other websites out there, and they don’t have a formulary list out there. Terms (also taken from here, and then I’ll explain the Medicare calculator. (USA Today has a decent writeup, too.)
- A list of drugs that a company or plan decides it will carry. If a drug is “off-formulary,” generally your doctor has to make a special plea to use it and has to have a good reason. You also might have to pay more for it.
- What a Medicare member pays before drug coverage kicks in. Can be zero to $250 a year.
- Medicare Advantage
- Managed-care plans, such as an HMO. Medicare Part C. The plans may provide more services than traditional Medicare, but may limit members to certain doctors and hospitals.
- A monthly payment for insurance.
- Quantity limits
- Dispensing limits on the quantity of a drug that can be prescribed each month.
- Step therapy
- Step therapy means a patient must try a lower-cost, often generic, product first. If it isn’t effective, the patient then “steps” to a different, often more expensive, drug.
- Co-Payment (Co-Pay, Co-Insurance)
- Amount you pay to get a drug after you’ve paid your deductible. Some plans have one flat rate, others have different rates based on the type of drug (brand name vs generic, newer vs older, etc)