New Medicare drug benefit won't help all retirees
Warren Wolfe, Star Tribune
Published June 28, 2003
DRUG28
If Milo Thompson and his wife paid the full $9,600 for prescriptions that his health plan covers, the congressional Medicare drug benefit proposals would be a godsend -- either would cut his bill by more than half.
Instead, his actual expense could soar if Congress approves either the House or Senate versions passed Friday. A committee will meet to reconcile differences between the bills before sending a final version to President Bush for approval.
Many on Friday hailed thebills as the first overhaul of Medicare since it began 38 years ago, and as a major help to older people struggling with rising drug costs, which now average $2,322 a year. But it won't help everyone.
Like about one-third of the 40 million American retirees on Medicare, Thompson, 74, of Maplewood, has a drug-insurance benefit from his former employer, and it's a good one.
In exchange for his $600 annual premium, his insurance pays all his drug costs. But he's worried that Sears, Roebuck, where he was a plumbing and heating salesman, might drop its coverage when a new Medicare Part D plan takes effect in 2006, if it becomes law.
If that happened, his drug costs would rise sharply -- to $3,920 a year under the House version and to $4,499 under the Senate bill.
"This is a better-than-nothing plan," said Pete Wyckoff, director of the Minnesota Senior Federation metro region. "It truly will help some. But not everybody, especially those who are covered by former employers."
A spokesman for Sears said Friday that the company probably will consider how it should respond to a Medicare drug benefit once it is law, but that the company will not comment now on what it might do.
"Many companies will look at this," said Kate Sullivan, director of health care policy for the U.S. Chamber of Commerce in Washington, D.C. "This may make it possible for companies to offer some new benefits to today's retirees if Medicare is paying more of the drug costs."
But it may be different for younger workers, she noted. "I think it's clear that younger people may not have the same retirement benefits that their parents are getting."
Canadian answer
Barb Kast, 69, of Shoreview has done the calculations to find out how her $1,060 annual cost for three prescriptions would be affected.
"It turns out I'm better off continuing to buy my expensive prescription from Canada," said Kast, a former nurse and teacher. That reduces her cost to about $514, compared with $723 under the House bill and $817 under the Senate version.
Retirees won't know for sure how they might be affected until the bill becomes law.
"But AARP has serious concerns, as retirees should, about the bills that were approved," said Michele Kimball, Minnesota director of AARP, which has about 630,000 state members.
"We're worried about those getting a drug benefit from former employers, and we're worried that the bills are just not comprehensive, especially the Senate version," she said. "This is a good start, but there are still big holes in coverage."
Under either bill, a Medicare recipient could buy drug coverage with a $35 monthly premium, then pay the first $275 in the Senate version, or $250 under the House bill.
After that, under the Senate bill, Medicare would pay half the drug costs up to $4,500, nothing between $4,500 and $5,813 (the gap in coverage was proposed as a cost-cutting provision), then 90 percent of costs over $5,813.
In the House version, Medicare would pay 80 percent of drug costs up to $2,000, nothing between $2,000 and $4,900, then all costs above $4,900 for people with incomes under $60,000. Wealthier people would pay more.
Costs would drop
Joseph Ramnarine of Shoreview is one who stands to benefit from a new Medicare drug benefit, even though a Canadian pharmacist supplies most of the drugs he and his wife use.
He now spends $2,560 a year for prescriptions, considerably less than the $4,000 it would cost if he went to his local druggist. Under the Senate bill, his costs would drop to $1,838, and under the House version to $1,580.
"But you know, If I lived in Florida, California or Arizona, I could join an HMO and have a $10 copay for my drugs," he said. That's because Medicare reimburses health plans at much higher rates than in Minnesota and many other states, allowing providers to offer richer benefits to retirees.
A retired nursing home administrator, Ramnarine has been following the congressional debate closely.
"This is a huge issue for retirees. The cost of prescriptions has become so high, and many people are very worried about how they can continue to make ends meet, worried about whether they can pay for drugs and still pay for rent and food," he said. "It's life and death for many of us. I have prescriptions for diabetes, my heart and my kidney. That's very expensive, but without the drugs many older people -- including me -- would be dead.
"So OK, I think Congress will pass something that is not perfect by a long way, but will be helpful to some people. It's a start. Maybe once it's there, Congress will be wise enough to make it better."
Warren Wolfe is at wolfe@startribune.com. |
