Monday, July 03, 2006

Republicans have a solution for Medicare drug benefit recipients -- "Let them eat donut holes"

Republicans have a unique take on skyrocketing medical costs. They want to use the market to solve the problem -- mainly by giving consumers a greater financial stake in the outcome, by making them pay more of the costs out of their own pockets, which presumably would make them better, more cost-conscious shoppers for medical services. The newly unleashed market forces would drive down costs in no time. In theory, anyhow.

This blindly ideological economic philosophy drove the development of the Medicare prescription drug benefit, with its notorious "donut hole" in coverage that potentially leaves recipients with a gap in coverage of nearly $3,000, after they've used their initial benefits and before catastrophic coverage kicks in. It wasn't some kind of an accidental screw-up. It was a deliberate attempt to jump-start those market forces.

The only reason there hasn't been a big uproar so far is that not many seniors had exhausted their initial benefits. But as we suggested in this post last April, the time was fast approaching when that would change.
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.
That time has come. As the LA Times reports, millions of American seniors are starting to enter the twilight zone of the donut hole.
The program pays most of a participant's drug bills until expenses reach $2,250 in a year. Then it stops paying until costs exceed $5,100. That leaves a hole of $2,850 that seniors with serious prescription needs are expected to manage on their own.

Now, six months into the drug program — the first new major healthcare benefit for the elderly in decades — 3.4 million seniors are approaching the doughnut hole.

Most of them are middle-class seniors with multiple chronic illnesses. (The poor are exempt from the gap.) Some have already experienced an abrupt surge in prescription costs.

Melvin Kinnison, 65, of Huntington Beach was shocked to discover that the out-of-pocket cost to refill his prescription for antiseizure medication was jumping to $178 from $10. He left the pharmacy empty-handed.
In effect, the Medicare drug benefit was jointly written by Republican ideologues and representatives of the drug industry. They're about to feel the wrath of several million people. House Democrats recently offered a solution. I wonder what the Republicans will do, once they wake up and realize there's a problem. They've sort of painted themselves into a corner on this one.

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