Profit-driven Medicare drug plan stirs confusion and anger

Under the new program’s guidelines, eligible citizens must choose between dozens of private insurance plans, each offering access to a specific list of drugs and pharmacies, and each with its own distinctive premiums, deductibles, and co-pay rates. But first, beneficiaries must decide whether to participate in the plan at all.

In many cases, Medicare recipients could end up paying more for insurance coverage than they stand to benefit, but this option must be balanced against the fact that the price of coverage goes up permanently by one percent for each month that a recipient waits before joining the program after the official deadline of May 15, 2006. Thus, many elderly people are forced to decide whether they should purchase coverage that they don’t need now, or risk paying more in the future for the same plan if their health declines.

Further complexity is added by the “donut hole” in the plan’s benefits gradient. According to the model insurance plan proposed by the government, after paying a deductible and premiums, recipients must pay for 25 percent of their prescription drug expenses up to $2,550. Between $2,550 and $5,100—the donut hole—co-payments jump to 100 percent of expenses, before returning to 5 percent for expenses exceeding $5,100. According to the bill, insurers must offer a plan along these lines or one that is “actuarially equivalent.” The explicit purpose of this provision is to force beneficiaries to still pay a substantial portion of their drug costs.

The plan’s complexity is especially problematic for Medicare beneficiaries, a large percentage of whom have cognitive, hearing, and/or visual difficulties. Needless to say, Medicare recipients are finding themselves overwhelmed and frustrated by the absurd complexity of the benefit plans. Many are unable to effectively select between plans that will determine what kind of drugs they can take, which pharmacies they can go to, and how much of their limited income they must pay on premiums and deductibles.

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http://www.wsws.org/articles/2005/dec2005/medi-d03.shtml