Sam Uretsky

Keep an Eye on Doughnut Hole

Get your eye off the doughnut for a minute, because the hole is growing larger, and that's important. Especially in politics. Among the great political lies, up there with "we can afford a tax cut" and "I wasn't bribed, this is normal constituent service," is the sign that appears at just about every protest rally: "We'll remember in November!" Well, we don't. Our capacity for outrage is limited, and we respond to campaign advertising and the latest news. Politicians, or at least their advisors, have a fairly good idea of when a story will play itself out.

So, politicians should watch Medicare Part D, the drug benefit plan that was supposed to make drug manufacturers, insurance companies and Medicare recipients appreciate the largesse of the Republican majority. The drug manufacturers and insurance companies got what they paid for, but the seniors are just beginning to realize what they got, and it's going to get worse.

Medicare Part D is a mess. Every state has dozens of providers, each with its own rules and its own formulary, and nobody knows what the rules are until a claim has been rejected. In the past, physicians and pharmacists had to cope with declining reimbursement rates by increasing productivity -- by seeing more patients or filling more prescriptions in the same amount of time. Now, these efforts at increased efficiency are being torpedoed by time spent on hold, waiting for somebody to answer questions about patient eligibility and drug coverage.

But as bad as the system is, the ones getting the worst of it are prescribers and pharmacists. As bad as things have been for the purported beneficiaries of the plan, they have gotten their drugs, or at least the drugs that the insurance company said should be theirs, at discounted prices. Increasingly, though, the elderly are being faced with the doughnut hole.

The doughnut hole is the point at which the cost of medications reaches $2,250. That's the list price of the medications, not the co-pay, and there are no discounts available. If a drug costs $100 list price and the co-pay is $25, it's the $100 that counts toward the coverage gap. Since the insurers can change the prices on a weekly basis (keep in mind that patients can only change insurers once a year), it's hard to calculate the amount being totaled up. Patients who braved the confusion of selecting a plan and the annoyance of being told their prescription isn't covered are starting to see bills not for the $25, but for the full $100.

But it is a doughnut, and eventually the plan comes back, paying 95% of the total cost. But, that only happens when the out-of-pocket expenses go past $3,600/year. There's a trick to it though. For that $100 drug, the full $100 counts toward the end of coverage, but only the $25 co-payment counts toward the out-of-pocket expenses. And not all drugs count toward the out-of-pocket expense. If a drug isn't on the insurer's formulary and the patient elects to pay for it anyway, that doesn't count toward the out-of-pocket total.

Some plans won't give credit for prescriptions filled at a non-network pharmacy. It's easy to get into the hole, but a lot harder to get out. So far, only a small percentage of people have used up the $2,250, and perhaps predictably, they're the poorest. While that may be difficult to prove without studies and analysis, poor people are more likely to have chronic conditions requiring maintenance medications, such as asthma and diabetes. Since this is a program for the elderly, it's safe to assume there will also be medications for high blood pressure and cholesterol, and perhaps for osteoporosis. This plan was designed for the drug manufacturers and the insurance companies, and the cruelty of the hoax is becoming more apparent every day.

It would have been easy enough to devise a prescription drug benefit plan that would have offered real benefits in a more cost-effective way. It would have been single-payer, operated through Medicare with its administrative costs of 1&endash;3% instead of through hundreds of insurance companies with 10&endash;15% administrative costs. It would bargain with the drug companies for discounts, just as the Veteran's Administration does. It would have had one formulary and one set of rules, so that prescribers and pharmacists would know what's going on.

Everybody would have benefitted; even those who aren't directly involved would have done better because improving outpatient care lowers total healthcare costs and frees money for other purposes. Instead, we have a giveaway that keeps on giving. Unlike the tragedy playing itself out in Iraq, being fought by just a few hundred thousand people and left to be paid for by children who have no vote, Medicare D is a mess that affects millions here at home, and is sure to get worse as the year progresses.

It is mean-spirited to wish anybody ill. Good people would wish nothing but peace and good fortune to our nation and its leaders. But for those of us embittered by the greed and arrogance of the current administration: Pay attention to Medicare D, because if there's any justice at all, this one is going to bite them in the rear.

Sam Uretsky is a writer and pharmacist living on Long Island, N.Y.


From The Progressive Populist, July 15, 2006

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