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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Kenneth E. Phillipps who wrote (505281)	12/7/2003 9:45:39 AM
From: Kenneth E. Phillipps	Respond to of 769670

New Medicare bill bars extra insurance to help pay drug costs By Robert Pear The New York Times WASHINGTON — Medicare beneficiaries will not be allowed to buy insurance to cover their share of prescription-drug costs under the new Medicare bill to be signed tomorrow by President Bush. Millions of Medicare beneficiaries have bought private insurance to fill gaps in Medicare. But a little-noticed provision of the legislation prohibits the sale of any Medigap policy that would help pay drug costs after Jan. 1, 2006, when the new Medicare drug benefit becomes available. This is one of many surprises awaiting beneficiaries, who will find big gaps in the drug benefit and might want private insurance to plug holes — just as they buy insurance to supplement Medicare coverage of doctors' services and hospital care. Congress cited two reasons for banning the sale of Medigap drug policies. Lawmakers wanted to prevent duplication of the new Medicare benefit. They also wanted to be sure that beneficiaries would bear some of the cost. Health economists long have asserted that beneficiaries, when insulated from the costs, tend to overuse medical services. Gail Shearer, a health-policy analyst at Consumers Union, said she had mixed feelings about the prohibition. "I don't want a return to abuses of the 1970s and '80s, when lots of confusing Medigap policies were sold to vulnerable seniors," Shearer said. But she added: "Many seniors and disabled people will face a huge gap in drug coverage. In a bill that's marketed as providing choice to consumers, comprehensive drug coverage is not really an option. That's a disappointment." The new drug benefit would be the biggest expansion of Medicare since creation of the program in 1965. But patients still would face substantial costs. Under the standard Medicare drug benefit, the beneficiary would be responsible for a $250 deductible, 25 percent of drug costs from $251 to $2,250 and all of the next $2,850 in drug costs. Private Medigap policies could not cover any of those costs. A Medicare drug plan could limit coverage further by establishing a list of preferred medicines known as a formulary. The list must include drugs in each "therapeutic category and class" — antihistamines, antidepressants and cholesterol-lowering agents, for example. But Medicare would not be required to pay anything for drugs left off the list. While patients could appeal a denial of coverage, they could not buy private insurance to cover the costs of such drugs. Under the standard benefit, a Medicare recipient would pay $3,600 of the first $5,100 of drug costs. After that, Medicare would pay 95 percent of the cost of each prescription. But if a beneficiary bought drugs not listed on the formulary, the bill says, those costs would not be counted toward the $3,600 amount. Congress began regulating the Medigap market in 1990, as a way to protect consumers, many of whom had bought duplicative policies. The federal government and state insurance commissioners developed 10 standard policies, to replace thousands then on the market. Three of the 10 Medigap policies cover drugs. Under the legislation, an old policy with drug benefits could be renewed — but only by a person who chose to forgo the new Medicare drug benefit. A person who enrolls in the new program could not buy or renew a Medigap policy to help defray drug costs. Nearly 12 million retirees have drug coverage and other health benefits from former employers. If those retirees sign up for the Medicare benefit, employers can help pay the beneficiaries' share of drug costs. But those payments would not count toward the $3,600 limit on out-of-pocket spending. In some states, all drug costs of some of the poorest elderly Americans have been paid by Medicaid, the government health-care program for the poor. Under the new law, however, they will be transferred to the Medicare prescription-drug program, in which they will have to make co-payments of $1 to $3 per prescription. If state officials wanted to supplement the new Medicare drug benefit, they would have to pick up the entire cost of the extra coverage, as they could not use federal money. States would not receive drug discounts and rebates they now receive from manufacturers under Medicaid. Dr. Lynn Mitchell, the Medicaid director in Oklahoma, said she expected Medicare formularies to be "more restrictive" than the drug-coverage policies of state Medicaid programs. "If patients do not get optimal drug therapy," Mitchell said, "costs will balloon in other areas. Patients may need more inpatient hospital care." In a report accompanying the bill, House and Senate negotiators said Medigap policies should be revised to provide less upfront coverage and to require beneficiaries to pay more of the initial costs of hospital and physician services. "Numerous studies have demonstrated that covering deductibles and coinsurance has led to higher Medicare spending because beneficiaries become insensitive to costs," the report said. "Beneficiaries with Medigap consume $1,400 more in Medicare services than beneficiaries without supplemental coverage." This, it said, "drives up costs for everyone — premiums of Medicare beneficiaries without Medigap coverage and costs to taxpayers." Background information on Medicaid was provided by Knight Ridder Newspapers. seattletimes.nwsource.com