Wednesday, April 12, 2006

Medicare drug benefit’s donut holes

The WaPo’s has a cheery little story this morning — Most Seniors Enrolled Say Drug Benefit Saves Money — about the increasingly positive response to the Medicare drug benefit.
According to the Post-ABC News poll, a majority of Republicans (56 percent) said they approve of the new benefit, while a similar majority of Democrats disapprove. Most Americans say the Republicans deserve the credit, or the blame, for the new program.

At the same time, the poll suggests that Part D is not shaping up as a major factor in the upcoming elections. The issue ranks well below hot-button topics such as Iraq and the economy: 59 percent say it will be important in their vote, compared with 83 percent for Iraq and 80 percent for the economy.
Not a “major issue”? That’s just because Medicare hasn’t started serving up its donut holes yet — to millions of people, many of whom are in for a big surprise.
The complete lack of coverage for drug spending between $2,251 and $5,100 is often called Medicare's "donut hole" by Washington analysts and lawmakers. More than one-quarter of all Medicare beneficiaries are projected to have drug spending that falls in the donut hole's range, according to the Congressional Budget Office.

The structure means that sicker patients with higher drug costs will end up not only paying more for their drugs, but paying a higher share of their drug costs than those with fewer prescriptions, Moon says. A senior with $1,000 in annual drug costs would pay $438 out of pocket under the plan, while a beneficiary with $5,000 in costs would be responsible for $3,500 of their total costs.

"The donut hole will reduce protection against drug expenses just as many of those Medicare beneficiaries who are most in need are expecting financial relief," writes Moon, who is a former Medicare trustee. "The new benefit's donut hole will likely anger many beneficiaries once they understand these rules," the report states.”
"Anger” is probably an understatement to describe what happens later this year when seniors start opening their wallets wide to maintain access to essential medication.

The poll never asked about the donut hole. It’s a classic example of how polling can lull people into complacency when it’s basically a look in the rearview mirror. It’s like the market research that long ago proved to Ford that the Edsel was a great idea.

Most people haven’t thought much about the Medicare donut hole. They will when it starts hitting them in the pocketbook — not just seniors, but family members who help them with their bills. They’ll be livid. Right about election time.

1 comment:

Anonymous said...

Why am I paying a premium of over $400 per year to get meds in tier 2 for $60/ an insurance co? Why was it necessary to give the Insurance companies more money and they get the drug for the lower price.and they also get govt subsidy. if the govt had gotten the price lowered and made it part of medicare benefits instead of adding another tier, the meds would have been even cheaper. the intent is to privatize medicare by making senior go into HMO's which cover drugs and thus dilute the medicare program