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The
New Medicare Prescription Drug Plan Pitfalls
By Jeremy Cockerill
Coverage
for the New Medicare Prescription Drug Plan begins on January 1,
2006. Many seniors are feeling confused and concerned about this
plan. Here are some of the pitfalls associated with this plan that
Medicare eligible individuals will want to be aware of.
1.
To join the Medicare Prescription Drug Plan (Medicare Part D) you
must choose one Prescription Drug Plan from dozens of plans that
are available (there are up to 50 plans in some states). Once you
have chosen a plan you are “locked-in” until the enrollment period
the following year.
2.
Prescription Drug Plan (PDP) providers can change the particulars
of their plans at any time with a short warning period for plan
enrollees. These changes can include changes to which drugs are
covered under the plan, which pharmacies are in the plans network,
the charges associated with being a part of the plan and any other
detail of the plan. These changes are at the discretion of the plan
administrator and can be implemented at any time.
3.
For 2006, once you have used $2250 worth of medications, you are
100% responsible for paying for the full amount of the drug until
you reach the $5100 Catastrophic coverage limit. This range between
$2250 and $5100 where you have to pay for 100% of your drug expenditures
is known as the “donut hole”.
4.
At its greatest level of savings Medicare provides a 49% savings.
This is only 7% better than the average savings experienced with
a licensed Canadian pharmacy. This greatest savings occurs when
people spend exactly $2250 on medication in one year (if you spend
more or less than that the savings go down). That means that the
greatest savings anyone on Medicare can experience above a Canadian
pharmacy’s average savings is $157.50 annually (7% of $2250) or
$13.13 a month. Is $13 a month worth the risk of being “locked-in”
to paying monthly premiums for a plan that can be switched on you
at any time. (Note: Some people can save more than 49% if they spend
well over $7100 per year. This is in the catastrophic coverage range).
5.
If you do not sign up with at Medicare Prescription Drug Plan before
May 15th, 2006 then you will be penalized with a cumulative 1% increase
to your premiums for every month that you do not enroll in a plan
after that date. This penalty is the governments way of forcing
people, who do not really need a drug plan, into joining a plan
and thus “subsidizing” the Medicare program. 1% of the average plan
is 32 cents. So for every month after March 15th, 2006 that people
are not in a plan, 32 cents will be added to your monthly premium
or basically $1 for every 3 months you do not join. This penalty
is however applied to your premium for all future monthly premiums.
What many seniors groups are advocating is for people to wait until
the May 15th, 2006 deadline and then join the cheapest possible
plan (approx. $10 monthly premium) and still order medicines from
a licensed Canadian pharmacy like Universal Drugstore.
6.
Average monthly premiums, the annual deductible and the Out-Of-Pocket
expenditure limits are expected to increase substantially every
year. This means you will be required to spend more and more money
every year that you are part of the Medicare prescription plan.
7.
Unless you are spending more than $800 on medications in 2006 there
is no real savings with the Medicare Prescription Drug Plan. This
required minimum amount of expenditure to experience savings will
increase every year as the annual deductible, the monthly premiums
and the Out-Of-Pocket expenditure limits are also increased every
year.
8.
It will be extremely time consuming and difficult to decipher myriad
plans available in each state (all providing different coverage)
and to try and figure out which plan is best for you personally.
This will be twice as hard for a couple as the prescription drugs
used by each person in the couple will be different and therefore
they may require different plans. Even once a plan is chosen, there
is still the risk of having the plan changed once you have made
your decision and you are “locked-in”.
9.
Drug companies stand to make a ton of money off of the Medicare
program. That is why they spent millions of dollars lobbying to
get the legislation passed to make Medicare Part D a reality. It
is also why Senator Bill Tauzin, a major advocate and motivating
force behind getting the Medicare Prescription Drug Plan passed,
is now a $2 million a year executive in Big Pharma’s trade organization.
On Sept. 5, 2003, Sen. John R. McCain (R-Ariz.) told the New York
Times, "There's no doubt in my mind that the drug industry
got everything it wanted and more," he said. "It perhaps
should be called the 'Leave-No-Lobbyist-Behind Bill.' "
10.
Plan providers have the ability to negotiate better drug pricing
with the drug companies but they do not have to pass the savings
on to the consumer or the government.
11.
If you join a Medicare Prescription Drug Plan (PDP) at any time
after Dec 31, 2005 your coverage is not available to you until the
first day of the following month.
12.
Action is required to enroll in Medicare Part D (the Prescription
Drug Plan part) unlike Medicare parts A and B which are automatic.
You are not simply enrolled in the best plan for you. You have to
wade through piles of information to decide what is best for you.
13.
It is very difficult for persons who qualify for Medicare Part D
to be sure if their drugs will be covered under their plans formulary
(which can change at any time anyways.) A formulary is a list of
drugs covered under particular drug plan.
14.
You may not qualify for Medicare Prescription Drug Benefits if your
annual income is too high or if you own too many assets.
15.
Different plans will have different monthly premiums. The plan you
need may have a really high monthly premium. $32.20 is simply the
“predicted” average monthly premium.
16.
Will your plan cover temporary-use medications (such as antibiotics
or heartburn medications) or only chronic medications (such as drugs
used for diabetes or heart conditions)?
17.
Plans with lower monthly premiums may have higher deductibles and
co-pays.
18.
Payments for drugs which are not on your plans formulary are not
counted towards your Out-Of-Pocket expenditure limit.
19.
Payments made by insurance plans do not count towards your Out-Of-Pocket
expenditure limit
20.
Is your regular pharmacy included in your plans network of pharmacies?
Like many people you have most likely come to rely on a pharmacist
that knows you and your medical conditions well. However, you may
be forced to go to another pharmacy if your pharmacy is not included
in your plans network of pharmacies.
21.
How many days of medicine can you get at one time? Do you need to
keep going back to the pharmacy every month or can you get 90 days?
22.
Will your drug be covered by your plan the next time you go into
your pharmacy?
23.
Does your plan require step-up therapy or prior authorization? Step-up
therapy means using drugs in a series of stages or steps in order
to treat your condition. For example if you have GERD your plan
may not cover Nexium unless you have previously tried ranitidine
(Zantac) and/or omeprazole (Prilosec) first. Prior Authorization
means that for certain drugs, your plan will not cover the drug
without first reviewing your medical and drug history to determine
if your treatment steps have been appropriate.
24.
The Prescription Drug Plan providers stand to make a ton of money
from the Medicare program (drug companies stand to make the biggest
windfall).
25.
Net cost to the government for Medicare Prescription Drug Benefits
is estimated to go from $37.4 Billion in 2006 to $109.2 Billion
in 2015 (estimate by Health and Human Services department). However,
much higher estimates of the costs of Medicare Part D can also be
found from non-government resources. Two years ago Congress reluctantly
approved for the plan at a cost of no more than $395 billion dollars
over 10 years. A few months later the cost ballooned to $534 billion
and earlier this year it shot to $795 billion. Big Pharma is the
biggest recipients of the increased dollars added to the costs of
this program.
26.
Plan may force you to use generics when you are used brand name
medications and may not be able to tolerate generic versions.
27.
The appeals process for some plans is very confusing and convoluted.
(You can appeal to your plan if your drug is not covered.)
28.
Many of the big pharmaceutical companies are now making anyone eligible
for Medicare Part D, ineligible for their assistance programs. These
companies are effectively forcing seniors into a “voluntary” program
that may not be right for them. The AstraZeneca Foundation was the
first to take such steps.
29.
Many people are finding it difficult to obtain accurate, updated
lists of what medications each plan will cover.
30.
Medicare’s own hotline can only answer general questions. For more
specific questions you must contact each individual insurance provider.
31.
Many people have waited 30 minutes or more when calling the Medicare
hotline to get information that they need.
32.
Rep. Dan Burton (R-Ind.) in a 60 Minutes segment televised March
14, 2004 said, “Seniors, when they find out what's in that bill,
are going to be very angry. The problem is, they're not going to
find out about it until after this next election."
Jeremy
Cockerill is a licensed Canadian pharmacist who owns and operates
htttp://www.UniversalDrugstore.com/
, one of the top Canadian mail-order pharmacies. Mr. Cockerill graduated
from the Faculty of Pharmacy at the University of Manitoba with
Honors in 1998. Mr. Cockerill recently won the 2005 Manager of the
Year award from the Manitoba Customer Contact Association. Mr. Cockerill
has been studying the new Medicare Prescription Drug plan since
early 2005.
