October 13, 2006 | Volume 3, Issue 2
The Medicare Prescription Drug Benefit
Serious flaws; should be amended, not repealed.
While the goal of providing prescription drug coverage to seniors is a laudable one, the Medicare prescription drug benefit in its current form has serious flaws that have prevented seniors from greeting the plan with enthusiasm. A Kaiser Family Health poll taken in 2004 found that seniors who had unfavorable opinions about the prescription plan did so for the following reasons:1
- The benefits package is not comprehensive enough. Senior citizens still believe that they can save more money by purchasing prescription drugs from Canada.
- The plan is complicated and difficult to understand. Seniors are struggling to figure out if they qualify for the plan, and if so, which provider they should sign up with.
- The plan provides unnecessary benefit to private health insurance companies and the pharmaceutical industry. Many seniors are skeptical about the bidding process used to determine private providers of the Medicare prescription plan.
Since the plan has come into effect, seniors have become even more uneasy after hearing about the problems with the implementation process. Pharmacists have complained that the Medicare database is slow and hard to access. They have had trouble determining whether an individual is eligible for coverage, which has prevented some people from getting the drugs that they need.2 Much of the enrollment process is conducted over the Internet, and since about 70 percent of seniors surveyed had never been online, according to a recent survey, this has caused difficulty for many patients.3 For a time there was a glitch in the electronic system that provided reimbursement for prescriptions to states; approximately two dozen states had to fund prescriptions themselves until the system was fixed.4 This put a major drain on state resources.
However, there are some strong benefits to the plan. According to the Kaiser Family Health Poll, seniors who found the plan favorable did so because they felt it could assist Medicare patients with high drug costs and lower incomes, and they felt that the plan was flexible. Approximately 70% of the seniors surveyed felt that the plan should be fixed rather than repealed.5 For these reasons, the program should be kept; however some major changes need to be made to the existing legislation and implementation process. I recommend the following initiatives:
- Launch a more comprehensive education campaign about the plan. Even though the Centers for Medicare and Medicaid Services (CMS) have put together information on their web site and set up a toll-free number, seniors are still having difficulty accessing accurate information about how the prescription plan works. CMS should send representatives to senior citizen centers to make presentations on the benefits of the plan and on how it operates. CMS should also develop a more user-friendly guide to the prescription plan that can then be mailed to all who qualify.
- Remove penalty for late registrants. Many seniors have not signed up for the plan because they were unaware of its benefits. Deadline for registration without penalty should be pushed back to give seniors more time to consider their options.
- Expedite implementation efforts. The current process is moving so slowly that senior citizens are becoming increasingly skeptical about the plan. Pharmacists are struggling to fill prescriptions and there have been cases of individuals being denied coverage in spite of having documents of eligibility. CMS needs to devote resources to fix these issues.
- Investigate issues identified by the Commonwealth Fund/John F. Kennedy School of Government Bipartisan Congressional Health Policy Conference. The Commonwealth Fund issued a brief in November 2004, which highlights many concerns with the prescription drug plan. CMS should examine and address these issues:
- There is a “doughnut hole” in coverage. Those with high-drug costs and those with minimal costs are not provided with uniform coverage. This differentiation may negatively affect those who have chronic conditions and/or disabilities.
- Private entities are allowed to pick their own drug formulary. This may cause problems for seniors, since the senior population has a higher proportion of chronic conditions, which may require newer and more expensive medications.
- The “asset test” should be reformed. Currently this provision denies coverage to a number of individuals who would otherwise qualify for the plan.
- Employers may scale back or be reluctant to provide prescription plans to retirees. In spite of the assistance offered by the government, the CBO estimates that 2.7 million retirees, or 23% percent of the 11.7 million nonfederal retirees, could lose access to existing employer-provided drug coverage as a result of the new Medicare drug benefit.
- This new drug benefit will cause an increase in direct federal spending that is higher than necessary. The federal government might be able to lower prices if they negotiated on behalf of all Medicare beneficiaries instead staying out of the bidding process between private entities.
Everyone deserves to have access to the best possible healthcare and CMS should be willing to spearhead efforts to amend the Medicare prescription plan and improve the lives of millions of Americans.
1 Kaiser Family Foundation, “The Public on Prescription Drugs for Seniors,” Kaiser Health Poll Report, Apr. 2005, http://www.kff.org/healthpollreport/apr_2005/index.cfm.
2 “Medicare Drug Plan Launch Uneven, Frustrating,” New Standard News, 4 Jan. 2006.
3 Colliver, Victoria, “Medicare drug cards perplex seniors- many in program say rules confusing, information elusive,” San Francisco Chronicle, 4 June 2004, A1.
4 Connor, Ceci, “HHS Works to Fix Drug Plan Woes,” New York Times, 18 Jan. 2006, A3.
5 Kaiser Health Poll Report, http://www.kff.org/healthpollreport/apr_2005/6.cfm
6 Cubanski, Juliette, “Continuing Policy Issues in Medicare Prescription Drug Coverage,” The Commonwealth Fund Issue Briefs, Nov. 2004.
7 Ibid., 4.