Very good start. I'm a senior that has decided not to enroll in the drug program. I buy my meds from Canada online. I save about 45% even factoring in the S & H costs.

In my opinion this bill was simply a reward for the $600M-$800M that the pharmaceutical companies and, God knows how much, the insurance companies have spent lobbying. This bill is one of the biggest scams the Republicans have ever pulled on the country.

I just wish I knew of a way to reach other seniors so we could get together and really make a difference in the congress.

Believe me, as a middle-aged daughter of two senior parents, this is not only going to be an issue for seniors.  Those of us doing the research for our non-computer-literate parents already know what a mess this is. My own mom got a letter from her employer's retirement health plan in November telling her that nothing was changing.  Then last week, she got a letter saying that not only were they dropping the prescription drug portion of the retiree's health plan, but they were dropping the current retiree medical plan completely.  So now she has the option of signing up for their "alternate" plan - which ends up being (surprise, surprise) the AARP plan offered through United Health Care - or finding a new plan on her own.  By April 1st.  The freakout has begun.
 My dad's a former Teamster and hasn't had any drama, so hurray for the unions.  So far. 

I wrote this letter to Josh about the Plan D fiasco a week ago and like to think that I gave him the idea for this blog. But my wife doesn't buy it.

I wonder what will happen as more and more people start to slide off the cliff during the year as their phony "accrued benefits" exceed the "doughnut hole limit" of $2250. Of course, the insurance company doesn't really pay ten times market price for drugs, they pay something closer to $225. But it counts against you as $2250. And after you reach that $2250 of "benefits", you don't get any more coverage until you finish paying $2850 of non-funny money for what is really $285 worth of drugs. Who would do that? Nobody. Not being stupid, you'll get your prescriptions filled in Mexico instead. But you'll continue to pay the premium for your "coverage". I'm sure people will love that.

WHY are barbiturates and benzodiazepines excluded from coverage? What was the original legislative intent behind their exclusion? Is it just that they present a cheap alternative to expensive new treatments? Or did someone have it out for heavily tranquilized housewives?

WHY are patients locked into a single plan for an entire year, while insurance companies can withdraw coverage for medications with only a month's notice? The drug bill does stipulate that each plan has to cover at least one drug in each category- it seems to have been written with the assumption that all drugs within a category are completely interchangeable except for price. However, drugs within a category usually target different receptors and can't just be swapped for one another with no ill effects. This is why they don't let MBAs write prescriptions.

WHY was the implementation deadline set so early, on Jan. 2006? Did they want the benefit to be in place and working by the November elections? Just remember when you vote this November, that this was all brought to you by Republicans.

As an epileptic who is completely dependent on continued access to prescription drugs, this whole thing has me as mad as a hornet! I can't believe they are doing this to people.

This has become a government that preys on its citizens. 

The two links on this post point to a two part Michael Hiltzik column dated Jan. 19 and Jan. 22, displayed on the LA Times Business Section website,  that examines the 48 Medicare Part D plans offered to senior citizens in Southern California, only.... 

latimes.com : Business January 23, 2006 (Part 2 of 2)

Medicare Drug Benefit Gap May Prove Costly 

....A 2004 study for the Kaiser Family Foundation projected that the 29 million expected enrollees would save an average of 37% on prescription drugs. But that figure doesn't count monthly premiums, on which there are few constraints. Moreover, the study forecast that these savings would be unevenly distributed: 8.7 million enrollees receiving special low-income benefits would save 83% on average, but 25% of all enrollees — 7.4 million people — would pay more for their prescriptions under the program than without it. Many of the latter are low-income seniors who will lose their access to free medicines thanks to the new program.

These are only hints of the flaws in the system.

The latitude that health plans have to determine their own premiums and formularies gives them the upper hand in dealing with enrollees. Medicare guidelines generally prohibit them from manipulating formularies to discriminate against patients with poor health or certain ailments. But the rules don't define discrimination, and there are few other constraints.

Importantly, the health plans are permitted to drop drugs from their formularies at any time with 60 days' notice; patients, however, are only permitted to change plans once, at the end of the year. Therefore, although enrollees will choose plans based on the drugs covered, they may find one or more dropped from the lists as the year wears on. Many patients may end up paying full price for drugs they thought would be covered...........

...............The plans also are permitted to impose stringent prior-authorization rules almost at will. These typically force doctors to jump through hoops — such as filling out paperwork or spending hours on the phone with health plan reps drilled in how to say "no" — before a plan will pay for a prescribed medicine, even if it's on the formulary.

Let's consider how this system will work in practice, using the drug Actonel, a once-a-week pill routinely prescribed for elderly patients to combat osteoporosis, as an example.

Of the 48 commercial Medicare drug plans offered in Southern California, three don't cover Actonel at all; their enrollees will have to pay full price. Twenty-eight plans require prior authorization. The remaining 17 plans cover the drug, no questions asked.

That's not all. There's wide variation in how much each plan charges for a month's supply. Most price it around $500, or $125 per pill. One lists a month's supply at $470. Blue Shield lists it at $602. The difference is important because the quoted price determines whether and when a patient will exceed the initial coverage limit of $2,250, as well as how many months that patient may spend in the doughnut hole before crossing the catastrophic coverage threshold and receiving the 95% subsidy.

A patient covered by the plan that assigns a $470 price to Actonel would transition into the doughnut hole after about 4 1/2 months, or in mid-May. (This is assuming he or she had no other prescriptions.) The plan charging $602, however, would land the patient in the hole a full month sooner, thus imposing higher out-of-pocket costs for the year.

It's worth noting that those prices don't necessarily correspond to what each plan actually pays for the drug; they're merely contrived from a formula. Indeed, any patient can purchase a month's supply of Actonel from drugstore.com, an online pharmacy, for $67.99, cash — spending slightly more for a year's supply than some plans charge for a month.

Not all prescriptions involve such pricing peculiarities, of course. But there are so many that this program's value as a consumer benefit has come properly under question.

The wholly unnecessary complexity of the Medicare drug program simply burdens patients while enhancing profits for drug makers and health insurance companies.

Congress and the Bush White House were determined to experiment with what happens when a government program is handed over, wholesale, to private industry. In the process they treated the public as lab rats running in big business' maze.

Read (Part 1 of 2), Medicare Drug Plan Looks Like a Big Scam     , here 

 

Thank you for this lucid explanation.
We are dealing with this right now.  My father has cancer.  Because one of his medications costs $2800 per month, we will soon reach his "donut hole." We have been told that he must pay $3600 out of pocket before the next level of benefits will kick in.
Fortunately, he has children who are financially able to help him through that so that he can move on to the next level without interrupting his treatment. 
But what happens to patients who don't have that kind of resources?  If they can't pay the $3600 of their donut hole, do they ever reach the next level?  Or are they just supposed to do without their medication?
I wonder if the plan is supposed to save money by just letting these folks die?
I should also mention that we have spent roughly 20 hours on the phone trying to figure out his plan.  We are well educated people with college degrees.  In five different calls to his HMO, we were told five different things about when his donut hole will kick in and how much it will be.  So we still are not sure.
If a family with education and financial resources is having this much trouble, what are ordinary folks supposed to do?

There is another enormous problem with Part D that I did not see mentioned here, and it relates to Medicaid.  Before D, Medicare only covered a very limited number of drugs, primarily those provided an incident to a physician's services. Most of these were chemotherapy drugs.  However, Medicaid has always included a drug benefit.  Under D, the Medicaid drug benefit is being moved to Medicare Part D.  And, as noted above and so well known, D can't negotiate for lower prices. 

Less well known was the Medicaid rebate program.  The rebate program was a retroactive best price program.  Here's how it worked.  At the end of each year, the pharmaceutical manufacturers identified how much of each drug was sold through each state's Medicaid program.  Then they identified their "best price," the lowest price they offered not including charity.  They then had to cut a check BACK to the Medicaid programs to guarantee that Mediciad got the benefit of the best price.  The rebate program was incredibly complex, but it worked, even in the face of attempts to manipulate "best price" by manufacturers, who did things like keep prices apparently high, while offering after sale rebates and discounts on other drugs to hide the actual lowest prices offered.

Now that those same Medicaid patients will be buying drugs through Part D, the rebate program effectively disappears.  The result?  Not only does pharma get a guaranteed high price from Medicare patients, it now gets an enormous INCREASE in the price paid by patients previously getting drugs through Medicaid. And this is a cost that will be borne, not by the federal government, but by individual states (because they will pay the deductible and doughnut of Medicaid patients).  What does this mean?  It not only means huge new profits for Pharma and huge new costs for drugs, it also mean a large part of the increased cost will be hidden in individual state budgets rather than in the federal Medicare costs.

Flavius,

I understand your points regarding the "protection" of having a plan in place but there are a couple of observations you need to be aware of:

1)   The administration setup this program so that after the annual enrollment you can sign up for a plan annually without any pre-existing condition limitations.  There is a penalty, a 1% monthly increase to the cost of getting coverage.  This means that if wait a full year before you sign up, your monthly premium increases $4 when you do sign up.  But then you haven't paid into this mess.

2)  Be aware the inexpensive plan you refer to is sponsered by Humana in conjunction with Walmart--It that what we want, allowing Walmart to corner the market on the distribution on medications?

3)  Each person who signs up costs the federal government almost $1,200 a year. That is the travesty of this program.  This is the incentive for the insurer to provide the program and cover costs above $5150 at 95%.  The more likely situation is the insurer will pocket the money. 

For most people this program is nothing more than a $1,500 benefit on the first $5,150 of medications.  Of course that is based on US retail prices for medications.  The plan was not designed as a policy solution to solve the problem of high cost medications for senior citizens.

The administrations had a dilemna.  How to stop senior citizens from getting prescriptions from Canada and Mexico while at the same time keeping the pharmacuetical company profits at the maximum level. 

They had a brilliant idea, put in a prescription program that equalized to the playing field.  After the subsidy from the government , in most situations the cost for medications under the plan would be close to the costs for medications from Canada.  Given the convenience of getting your meds from a local pharmacy, the trips to Canada would stop--problem solved.  Pharmacuetical companies are happy, insurance companies are happy and the senior citizens are happy.

Boy did they screw up on this one.  The rules designed by the government stacked the table in favor of the insurance companies, obviously to make sure enough companies would decide to enter the market and provide plans.

The insurance companies, seeing rules that were in their favor jumped in, there was little risk.  They also designed their plans to minimize their risk even further.  So we end up with over 50 plans in each state that are effectively crap.

You see the insurance companies that entered the game decided they did not want to price and design their plans to make it a good deal for their patients.  They could design a plan that would cover generic and brand drugs in the donut hole--only one company took them up on it----Walmart.  They could design a plan that could be extremely inexpensive--only one company took them up on it----Walmart.  Do you think small local pharmacies are in Walmart's network?  IN ANOTHER LIFE.

In order to avoid their risk, all of the plans put limitations on expensive medications that will make this program a nightmare for senior citizens.  

Many of the less expensive plans do not cover major medications.  Even the more expensive plans have holes in their formulary listings and do not cover crucial medications.  If you  are lucky enough to find a plan that covers all of your meds, you should only hope that they don't drop it in the middle of the year.  Finally all of the plans introduce limitations such as prior authorizations, step therapy and quantity limits to prescription access.

Under prior authorization a prescription from your doctor is not good enough to get a med filled--the doc needs to send a request in writing to the plan to receive "prior authorization" for the med to be distributed.

Under step therapy a medication like Nexium cannot be dispensed until a full round of multiple less expensive alternatives have been dispensed.  If that doesn't happen, the medication not be covered.  Of course a doc could submit in writing a request in advance to avoid this process, but then again the plan must approve that request.

Under quantity limits the plan can limit the number of medications dispensed at any one time and require multiple requests for med refills that can be onerous to an 80 year old (trek down to the pharmacy every week to get a refill).

If you ask me they screwed up the convenience argument when they set up this program.  If the cost is the same, I'll go to Canada thank you.  God forbid if you need a $5,000 a month medication, the cheap plan probably wouldn't cover it anyway and in the worst case scenario under this plan, you just sign for January of the following year.

Wonkiest couple ever. Sheesh.

I am told that if you enroll in a Medicare Drug Plan other than that offered by your present health insurer, it may disenroll you from your health plan.  Friends who have Aetna are not enrolling in Medicare D.  Our insurer (Independence Blue Cross) automatically enrolled us. 

Yes I know Walmart is behind Humana and I'd love
to see them faced with contributing  95% of
the "catastrophic" drug costs.  If

Not true that  small local pharmacies can't participate with Humana  , mine does.

Now as I boringly repeat  everyone should enroll- for the sake of the catastrophic coverage..

Yes holding off for a year's time would be fine provided this isn't the year your drug bills suddenly  escalate  Can you give anyone that assurance? If not , don't stop them from enrolling.

A friend just was put on  med costing $2400/month , but was  delaying  enrollment since she  didn't  realize  that her expenditures prior to enrollment don't  count against the  $3600 trigger point .

Here's how that works. By signing now she'll pay her monthly premium , her $560 share  of drug costs up to $2250,  plus the full $1350 during the doughnut hole: $1942 total. Then she'll pay $120/month . By delaying a month she'll pay the market price of $2400 then that same $1942 , and only after that drop to $120. So she would have needlessly blown the first tranche
of $2400.

Other TPM commentators have discussed the fact that it took them weeks to locate the right plan.(seems long to me). So starting  that process  after you first  prescribed an expensive med , means you either delay therapy or eat that cost yourself. Chances are that if you are being prescribed one of these outrageously expensive meds you ought not to delay.

My suggestion: pay Walmart the $4 a month purely to protect against that scenario . You can still but from Canada if that
makes sense but don't go unprotected when it only costs
$49 a year to have Humana as a back up.

My suggestion for other commenators: remember someone who delays enrollment  because of your advice may be faced
with a bill they can't afford.

Here's how that works. By signing now she'll pay her monthly premium , her $560 share of drug costs up to $2250, plus the full $1350 during the doughnut hole: $1942 total. Then she'll pay $120/month . By delaying a month she'll pay the market price of $2400 then that same $1942 , and only after that drop to


SORRY  THAT's WRONG. HER PAYMENTS WON'T STOP WHEN SHE
REACHES  1942 BUT WHEN SHE REACHES 3600. IT STILL REMAINS TRUE THAT ANY AMOUNT SHE SPENDS PRIOR TO ENROLLING DOESN'T COUNT EN ROUTE TO THAT 3600.

Alas the size of the donut hole is misstated in this excellent article. The hole extends from $2250 up to $5100 in drug spending, not $3600. I have found it hard to obtain accurate data on the distribution of drug spending by persons over 65. I am guessing that 20% have expenditdures over $2250--can a reader provide the information? But the donut hole means that those with the GREATEST BURDEN of drug expenses get hit with a brutal $2850 expenditure that is not covered by the Medicare D. IT IS NOT CLEAR TO ME WHETHER IT IS ALLOWABLE (under the Medicare law)  OR POSSIBLE for a person to buy insurance to deal with this potential liability. But it is clear that the new Medicare drug plan does not provide catastrophic coverage. Can a reader provide this information?

latimes.com : Business January 23, 2006 (Part 2 of 2)

Medicare Drug Benefit Gap May Prove Costly 

...."Many... are low-income seniors who will lose their access to free medicines thanks to the new program."

     This statement proves to be on-target in my situation!  The least-expensive Medicare Part D program available to me in Oregon will cost me >$3,000 per year for medicines I received at no cost through Patient Assistance Programs from the drug manufacturers before the introduction of Part D.  This forces me to choose between medications and groceries each month.

 

Importantly, the health plans are permitted to drop drugs from their formularies at any time with 60 days' notice; patients, however, are only permitted to change plans once, at the end of the year. Therefore, although enrollees will choose plans based on the drugs covered, they may find one or more dropped from the lists as the year wears on. Many patients may end up paying full price for drugs they thought would be covered

THANKS. I EMAILED THIS QUESTION TO MEDICARE IN NOVEMBER
AND NEEDLESS TO SAY NEVER RECEIVED A RESPONSE.

In several comments-of which this is the last-I've seemed toendorse Humana because of its $49/year premium. ActuallyI endorse Humana only for the special use of those who are able and intend to obtain their meds from Canada/Mexico etc. My suggestion is that while doing so  they should also enroll in Humana as an anchor to windward against the possibilityof the sudden  onset of therapy which will cost in excess of $5000 per year even at Canadian prices . By having a Humana enrollment on the shelf , they can immediately switch to  Humana so as to get credit against the $3600 trigger ..

If you're enrolling in Plan D purely for this sort of standbyapplication  Humana might be your best bet becauseof its $4/month premium

Conversely if you already know you are going to reach thecatastrophic level , and therefore  are  searching for a plan for actual use  that's a completely different situation.  In this situation you need to make use of the Medicare.gov  insurer choice program .
As follows: 
1.Click on the Landscape program in order to obtain its' information on gap coverage and formulary % covered of the top 200  drugs.. Print  and put aside.

2. Return to the home  page and click   Compare Medicare Prescription Drug  Plans.  Follow the steps and the end product will be a list of  your state's plans  ranked from lowestto highest cost for your particular meds. Stupidly , it doesNOT repeat the coverage informtion on the Landscape. So...
 3. Eyeball integrate  Landscape's coverage info  , with the cost  ranking from step 2. Chances are that several of the cheapest plans will have such inadequate coverage that you will decide to move higher up the cost ladder.

4. Finally take into account qualitative factors e.g. if Humana  had the best coverage of the , say ,10 remaining  lowest cost plans that might make it your choice . Or you might decideto move higher up the cost ladder because of  your subjective assessment of Walmart 

Bottom line. I do not endorse Humana except possiblyfor the specialized  application as a  "shelf enrollment".

 .

Thanks for the posts and advice. I will do some research. I should get involved in politics. New Orleans and Louisiana is very wacky! I tried to volunteer for the Kerry Campaign but no one ever got back to me. I felt like they gave up on Louisiana very early on, a year out in fact. We are a swing state! I don't know if we can stay that way after Katrina. Y'all keep up the good work.