Alaska editorial: Problems plague Medicare drug plan

Posted: Friday, June 02, 2006

This editorial first appeared in the Anchorage Daily News:

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Covering prescription drugs through Medicare was a good idea. Expensive but good. The way President Bush and Congress went about it, though, was a complicated hash job that serves the interests of insurance and pharmaceutical companies far better than it serves the nation's senior citizens.

To enroll in Medicare drug coverage, seniors have to pick among a complex array of private insurance plans. In some states, more than 40 options were available. The monthly premium varies with each plan. So does the co-payment for each prescription. A drug that's covered in one plan might not be covered by another plan. The list of drugs an insurance plan will cover can change from year to year, forcing seniors to re-evaluate plans every year.

Seniors who already have their own private drug coverage have to sort through all the Medicare plans to see if they come out ahead by switching to Medicare. Uninsured seniors may or may not be able to buy new insurance for drug expenses that Medicare doesn't cover. Though advocates of this approach heralded the consumer choice it offered, low-income seniors previously covered by the much simpler Medicaid drug benefit had no choice but to enroll in Medicare's complicated new system.

If seniors didn't enroll by this month's government-imposed deadline, they face a stiff financial penalty on future premiums when they do sign up.

To control costs, Congress deliberately left a large and painful gap in the benefits. Seniors who spend more than $2,250 a year on drugs suddenly find themselves stripped of all further coverage - a gap known as the "doughnut hole." Only after they spend another $2,850 of their own money does Medicare resume paying for drugs. Meanwhile, they have to keep paying monthly premiums for Medicare coverage that has no immediate benefit.

Medicaid-eligible seniors, however, do not fall into this hole and receive full benefits.

And, in its supposed zeal to control costs, Congress barred the federal government from doing what Wal-Mart and other huge private companies do - negotiate price discounts based on high-volume purchases. Instead, competition among private insurers is supposed to hold down the prices of drugs that Medicare pays for. That fragmented approach signs away much of the government's bulk purchasing power.

Flaws in this convoluted government program are starting to draw attention from politicians. Alaska Sen. Lisa Murkowski is touting her work on legislation to waive the late enrollment penalty for this year and improve enrollment assistance to perplexed seniors.

As more elderly people hit the "doughnut hole" gap in Medicare's drug coverage, politicians are going to hear even more and louder complaints. There is no groundswell in Washington to simplify the program yet, but a congressional election is only six months away. To avoid trouble at the polls, perhaps Congress will do what it should have done in the first place and craft a Medicare drug benefit that doesn't tax the brain, doesn't have a huge hole in coverage and doesn't overdraw the federal treasury.

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