Tuesday, August 21, 2018

Hidden Costs of Medicare Part D

Medicare Part D, a prescription drug program for seniors on Medicare, was first suggested by President Clinton in 2000. Under the Bush administration the new drug plan became part of the 2003 Medicare Modernization Act and finally went live in 2006.

One would think a government program 6 years in the making would have worked like a charm.

But not only do gears grind slowly inside the beltway, but most of the big ideas are crafted by attorneys who lack real world experience.

The PDP (prescription drug program) in 2018 is one of the most complex and misunderstood parts of Medicare. Not only is it confusing to the consumer, but many agents can't fully explain it.

The result is, the most popular plan is often the one with the lowest premium and no deductible.

And then there is this . . .

Stable Premiums, Rising OOP Costs

According to a NYT article, 73% of Medicare beneficiaries have a drug plan. Since 2006 premiums have remained mostly flat.

Yet the cost of the drug program has risen by 72% since inception.

What?

While premiums have hardly increased, seniors who participate in the drug plan are paying more and more each year.

If you are a type II diabetic, daily insulin injections are required if you want to live. Yet insulin prices have risen so much that many diabetics routinely pay $600 per month or more for this golden drug.

A version of insulin that carried a list price of $17 a vial in 1997 is priced at $138 today (2016). Another that launched two decades ago with a sticker price of $21 a vial has been increased to $255. - WaPo

That's a lot of money to anyone, but those on a fixed income may find themselves choosing between buying insulin or paying the mortgage.


The Donut Hole

Anytime a product or service goes from CASH to covered by insurance, the price invariably rises considerably. This is especially true for prescription medications.

"between 2010 and 2015, the number of enrollees entering the catastrophic drug cost range grew 50%, from 2.4 million to 3.6 million".

Are people getting sicker or are rising drug prices pushing beneficiaries into the donut hole and beyond?

Is this a bug or a feature, designed to force seniors into bankruptcy? Or possibly hoping they will stop taking their medication and die?

I run about 1,000 drug plan reports for clients, about half of those done in the first few weeks of Medicare open enrollment. Most of my clients pay less than $100 per month in premiums and copay's. But some pay $500 per month or more.

Getting old isn't easy or cheap.

Drug Prices Rise

Some commonly prescribed drugs double in price from one year to the next.

I fill a prescription cream for Eczema flare ups about every 18 months. For years I never paid more than $20 for a small tube. Two years ago the my Part D plan copay was $180.

I refused to pay and found a GoodRx coupon for $27. Almost $150 less for a cash price vs my Part D copay.

Something is terribly wrong here. Most seniors do not understand their drug plan and, by default, use their drug card for everything.

This type of abuse has got to stop!

#MedicarePartD #PBM #DonutHole




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