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Having It Both Ways

Aug 30, 2008
Two reports came across our desk on the same day last week, regarding the Medicare Part D drug benefit program, about to enter its fifth year.

One was from the Department of Health and Human Services’ Centers for Medicare & Medicaid Services (CMS), entitled, Lower Medicare Part D Costs Than Expected in 2009. (We guess that’s not ungrammatical, but we know there’s something wrong with that acronym.)

The other was from the Kaiser Family Foundation and is linked below. Their report is entitled, “New Study Examines Impact of ‘Doughnut Hole’ on People Enrolled in Medicare Drug Plans in 2007.”

They must have named the Medicare Part D Drug Plan after the Marquis de Sade. It is the most sadistic imposition of bureaucracy, anxiety, and expense on an aging and ailing population that anyone could possibly come up with.

The first report is, predictably, all pie in the sky. It claims Part D beneficiary satisfaction “remains high” without getting specific, and notes that the basic monthly premium for 2009 will be about $28, a full $14 less than expected at the enactment of the program in 2003.

Segue to the Kaiser report. Here we find that beyond that reasonable monthly premium, Part D also calls for a $275 deductible and, thereafter, a 25 percent co-pay up to the first $2,510 in annual drug costs. Reach that plateau and the fun really begins. Now you’ve arrived at the dreaded Doughnut Hole, a sort of reverse eye of the hurricane, where all is not quiet and where you are on your own for your full prescription drug costs for the next $3,216.

The purpose of the Kaiser report, which was produced in collaboration with Georgetown University and NORC (an apparently orphaned acronym) at the University of Chicago, is to report on the extent and impact of the Doughnut Hole catastrophe in 2007. Then, 26 percent of non-low-income enrollees (low-income people have some protections built in) reached the coverage gap, and 15 percent of them simply stopped taking their medicine. Those who continued saw their monthly out-of-pocket drug expenses soar from $104 (no, not $28) to $196.

So here is what is awaiting us all in our twilight years: A bewildering shopping expedition—with a hefty penalty for dragging our feet—to decide on a plan from a multitude of apples and oranges from which to choose. And thereafter one in four of us can look forward to running out of coverage and paying the full freight on our drugs for, on average, the last third of the year.

Meanwhile, up in the clouds, the Marquis chuckles.
tags: Health | Retirement

Read the Kaiser Summary and Download the Report

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