Medicare Mess

I've been spending a lot of time trying to figure out how this Medicare Part D prescription drug plan works, and after a number of headaches I think I have it figured out. Sort of. My conclusion is that it is worse than I feared. Not only can they change the drugs offered at will, not only does it forbid Medicare from using its bulk to negotiate lower costs, but it is also hugely expensive and doesn't cover much. What a plan!

Here's how the "standard plan" works. First, you pay a premium. Then you have a $250 deductible - you pay that amount before the plan covers a thing. Then you get into the good part: the next $2000 in drug costs have a 25/75 split, for up to 500 for you and 1500 for the plan. So for up to $2250 in drug expenditures, the senior pays $750 (plus premiums) and the insurance company picks up $1500, which isn't so bad.

Here's the kicker, the soon to be famous "donut hole" : the next $2850 of prescription drug costs are borne entirely by the consumer. That's right, the plan doesn't have to give you a nickel. This means that if you have $5100 in prescription drug costs a year (which many people do), then you are responsible for spending $3600 and the plan pays $1500, not including premium. In other words, for seniors with substantial (but not exorbitant) drug costs - the ones who need it the most - the plan forces them to pay 70% of the cost to prescription drug, including premiums (which could run as high as another $1200 a year).

After $5100 of costs, the medicare plan reverts to a "catastrophic coverage" system, with the insurance company picking up 95% of the tab. But essentially what we have is a catastrophic drug coverage plan with a subsidy to low-to-moderate drug consumers. At a tremendous cost to the federal treasury, I might add.

This is a ludicrous piece of legislation. The Republicans' greed and incompetence is blowing a hole in the budget, leaving seniors in a bind, and pushing responsibility for fixing this mess onto the states. To make matters worse, the folks who will have to fix this plan are the ones who screwed it up in the first place. In addition, the fallout of this disaster might compromise any future prospects for health care reform by de-legitimating government's ability to intervene in the insurance market.

Which for all I know was the whole idea.