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Politics : Impeach George W. Bush -- Ignore unavailable to you. Want to Upgrade?

To: jlallen who wrote (23733)	12/9/2003 7:12:24 PM
From: laura_bush	Read Replies (1) \| Respond to of 93284

Lost in the Fine Print: Ten Overlooked Policies That Harm Medicare and Its Beneficiaries While many features of the Medicare Prescription Drug and Reform Conference Agreement (H.R. 1) have received considerable attention, some important provisions have gone relatively unnoticed. The following is a list of ten issues whose impact has been largely overlooked. HIDDEN PITFALLS FOR SENIORS AND PEOPLE WITH DISABILITIES 1. Severely Restricts Access to Prescription Drugs The new law gives private insurers the authority to ration access to drugs funded by Medicare. Insurer-created committees decide what types of drugs to cover, which specific drugs to include on their formularies, and how high to set the beneficiary payment for each drug. It will be difficult and, in some cases, impossible to get drugs that are not included on an insurer’s formulary. These restrictions, rarely seen in today’s private marketplace, mean that seniors who have drug coverage today could have less access to drugs under the plan. Thus, even more beneficiaries will lose under this law than the estimated 2.7 million seniors losing retiree coverage and 6.4 million beneficiaries losing Medicaid help. 2. Denies Beneficiaries Genuine Choice Beneficiaries will have to choose a drug insurer without knowing exactly what drugs that insurer will cover. Even after they learn what drugs are on the formulary, the insurer can change or remove drugs at any time. While beneficiaries must be given notice, they have no option to change insurers during the year to retain access to the drugs their insurer no longer covers. This is a bait and switch. Moreover, if the law succeeds in expanding HMOs and preferred provider organizations (PPOs), there is no guarantee of any choice for beneficiaries in traditional Medicare. Drug coverage will be available only through whatever private insurer plan comes to their area, no matter how high its premium. 3. Allows Premium Variation Based On Where You Live Medicare charges all beneficiaries the same Part B premium. The new law allows insurers rather than Medicare to set premiums for drug coverage. Furthermore, it has beneficiaries, not the government, pay for local drug utilization differences. Thus, premiums will be higher in areas with older or sicker seniors. 4. Erodes Assistance Over Time Most seniors are familiar, and dissatisfied, with the standard drug benefit. The law increases each component of the benefit after 2006 by per-capita drug cost growth – which is roughly three times the rate of inflation used to increase Social Security payments. Thus, in 2013 compared to 2006, the deductible will be $445 (from $250) and the catastrophic limit will be $6,400 in out-of-pocket spending (from $3,600). As such, a growing share of beneficiaries’ income will be spent on Medicare prescription drug costs. FAILS TO REIN IN PRESCRIPTION DRUG COSTS 5. Adopts Drug Industry-Preferred — and Possibly Owned — Delivery System The new law rejects the idea of reducing prices through group purchasing, instead adopting an untried system of multiple, stand-alone prescription drug insurers — an approach supported primarily by the drug industry. Moreover, the Senate bill’s provision that would prohibit pharmaceutical industry ownership of the private insurers delivering the drug benefit has been stripped from the final law. This potentially allows manufacturers to help set Medicare prices for their own drugs. 6. Prevents Medicare From Knowing The Prices It Pays for Drugs The law includes policies that limit insurer disclosure of prices to Medicare and excludes policies that ensure adequate Medicare oversight. Insurers are required to submit only their aggregate discount information and their aggregate claims for reinsurance and risk corridor payments. Missing from the law are provisions that would create strong enforcement tools and allow inspectors general audits to ensure that Medicare and its beneficiaries are not paying inflated drug prices. 7. Omits Reforms To Lower Prescription Drug Costs Beyond Medicare A House-passed provision allowing limited re-importation of U.S.-made drugs from other countries was dropped from the final law. Additionally, no consideration was given to polices that would reduce excessive direct-to-consumer advertising and go further in improving access to generic drugs. BIAS TOWARD PRIVATE PLANS EVEN BEFORE 'PREMIUM SUPPORT' KICKS IN 8. Promotes Private Plans At Greater Taxpayer — and Beneficiary — Expense In the name of competition, the Medicare law increase HMO payment rates immediately. By 2006, rates will be an estimated 25 percent higher than traditional Medicare costs for the same beneficiaries. Additional financial incentives – blended payment rates, risk corridors and a $10 billion “stabilization fund” to promote regional and nationwide private plans like PPOs — begin in 2006. This will exacerbate the current system problems: HMOs and PPOs cost more, selectively serve profitable parts of the country, arbitrarily discontinue coverage, and use premium and benefit changes to attract healthy and avoid sick beneficiaries. 9. Steers Beneficiaries to HMOs and PPOs Through Drug Benefit Design In addition to its explicit promotion of private plans, the law provides them implicit advantages through its prescription drug benefit. Unlike stand-alone prescription drug insurers, HMOs and PPOs can lower their drug premiums through higher cost sharing for basic Medicare benefits or health system savings that result from adding a drug benefit. Moreover, in areas with HMOs or PPOs, a single stand-alone drug insurer would have a monopoly on coverage for all those in traditional Medicare. With little incentive to keep premiums and prices low, stand-alone drug insurance could be expensive, forcing some to join an HMO and leave their doctor to obtain drug coverage. SHIFTS COSTS RATHER THAN CONTAINING THEM 10. Increases Medicare Program Spending — Beyond the Drug Benefit The Congressional Budget Office estimates that gross Medicare spending, not including the drug benefit, will increase by $5 billion over the next decade. This cost is offset by savings from an increase in the Part B deductible and a new income-related Part B premium. Thus, rather than providing true cost containment, the law raises costs and hides this fact by shifting them onto the beneficiaries. americanprogress.org