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Monday, 03 March 2014

Proposed Changes to Medicare Part D

Although it's been out there in public for about six weeks, proposed changes to Medicare Part D, the prescription drug coverage, had escaped my notice until an email press release from my Senator, Ron Wyden, arrived over the weekend.

”In a letter today,” the press release began, “Senate Finance Committee Chairman Ron Wyden, D-Ore., and Ranking Member Orrin Hatch, R-Utah, were joined by 18 colleagues in urging Centers for Medicare and Medicaid Services (CMS) Administrator Marilyn Tavenner to reconsider changes proposed for the Medicare Part D prescription-drug program.”

I continued to read – in vain – for what exactly it is that Senator Wyden and his colleagues object to. The announcement failed to enlighten me.

Even Wyden's formal letter to Ms. Tavenner that was attached at the bottom of his message made no reference to what the objections are.

You know, we pay these people in Congress the big bucks to be, if nothing else, vaguely competent at what they do. Telling constituents about policy issues – pro and con – is well and good but it does require, at the most basic, communications101 level, a list of those changes and the reasons for opposing (or supporting) them.

What a useless piece-of-crap email. Does Senator Wyden expect me and everyone else to jump on his bandwagon just because he says so?

End of rant and on to the real issue.


From here on, this gets wonky but I will be deeply disappointed in you if you bail because these proposed changes to Part D would directly affect the amount of money you pay for prescription drugs and, possibly, for Part D coverage itself.

Here are some facts about Part D as it stands now:

• Ninety to ninety-five percent of Part D participants are satisfied with the program.

• In the 10 years since Part D went into effect, costs amounting to $346 billion have been 45 percent lower than projected when Part D began.

• In the same 10 years, Part D beneficiaries have saved $8.9 billion on prescription drug costs.

• The ACA (Obamacare) gradually reduces the notorious donut hole (during which elders pay full price for drugs) until it disappears entirely in 2020, when only usual co-pays will apply.

• The Part D legislation does not permit the federal government to negotiate drug prices with pharmaceutical companies as is allowed with, for example, the Veterans Administration.

Personally, I don't believe there should ever have been a donut hole, nor should there be the rule against price negotiation which has been a billion-dollar gift to the pharmaceutical companies.

Note that the changes being proposed to Part D do not include an elimination of the no-negotiations rule.

The Centers for Medicare and Medicaid Services (CMS) published the proposed changes in the Federal Register [pdf] on 10 January 2014.

The paper is 157 pages long. You may read it if you are so inclined; I have relied on several different reports, points of view and commentators.

Although the proposal contains a number of changes all of which would go into effect in 2015, three are causing all the talk, argument and confusion in Washington among Congress, pharmaceutical and insurance companies and other interested parties. Here are the short versions of those three for you:

Plan Choice Reduction: This proposal would cut the number of drug plans. As The Wall Street Journal explains:

”Drug-plan providers can currently offer up to three options [each]. The proposed rule calls for two options per drug plan: a basic and an enhanced plan. This year seniors were able to pick from an average of 35 different drug plans in their regions...”

I didn't check, but I'm pretty sure I complained during the sign-up period last fall that the number of choices is unnecessarily long and confusing and that is one of the arguments for this change that CMS is making – to simplify the process for elders.

Reduce Coverage Requirements A second controversial proposal reduces the requirement that an insurer cover all drugs in two “protected classes” of drugs. This time I'll let Reuters explain:

[Those two classes are] “antidepressants and immunosuppressants used in transplants. Three other protected classes would remain: antineoplastics used in chemotherapy, anticonvulsants for epilepsy and bipolar disorder and antiretrovirals used in the treatment of HIV.

“Another class, antipsychotics, would remain protected at least through 2015 while CMS evaluated the need to retain its status.”

Medicare chief Jonathan Blum has suggested that this change would lead to greater competition and lower prices. He told Congress

”...that beneficiaries would still have access to the drugs they need and that there would be adequate notification for patients before a drug could be removed from a plan's coverage.”

Open Program to Additional Pharmacies The third important change would affect many more of the nearly 40 million Part D beneficiaries – it widens the number participating pharmacies. This time, let's read The Hill's explanation:

”...the new regulations will ensure two things: (1) that plans may continue to have preferred cost sharing contracts with pharmacies, and (2) any pharmacy that meets the terms and conditions of the contract can participate.”

Reuters points out that this change has bipartisan support amont rural lawmakers.

It also would prevent mail-order pharmacies from charging lower co-payments than retail pharmacies.

You can imagine that in addition to Senator Wyden and his colleagues, others oppose these changes including powerful interests in the insurance and healthcare industry. Bloomburg BNA reports that more than 200 groups have sent their own letter to CMS with their objections:

“'We urge you in the strongest terms to withdraw the proposed rule that would have unintended consequences for seniors and beneficiaries with disabilities, the groups said. 'Weakening these programs will result in a less healthy patient population and, consequently, increased Medicare costs in the long term.'

“The 236 organizations included health plans and various consumer and medical groups, such as Easter Seals, America's Health Insurance Plans, Blue Cross and Blue Shield Association, American Osteopathic Association and the Pharmaceutical Care Management Association.”

Although the overview I have provided gives you the essentials, there are – what else is new? - convoluted details that could affect the outcome of these proposed changes. You will find a variety of explanations and points of view in the links throughout the post above, though not enough detail.

More information about the consequences (unintended, perhaps?) of these changes could change my mind but I'm leaning toward supporting the changes.

How about you? Let your senators and congressperson know.


At The Elder Storytelling Place today, Ralph Lymburner: Pretty Good And You?


Posted by Ronni Bennett at 05:30 AM | Permalink | Email this post

Comments

Ronnie and Readers,
To Ronnie - thank-you so much for all of the information put into an easy to understand format. Sometimes I have problems sorting it all out so any help like this is appreciated. I tend to support it (the changes) for now also.

Two of those changes make sense to me. Too many choices make selecting a good option difficult, so limiting the choices might actually make the plans easier to figure out. Access to more pharmacies in rural areas, where traveling to a preferred pharmacy can reduce any savings in co-pays, would be good.

The drug limits seem logical, but my experience was that in some of these protected classes of drugs, a patient really needs a specific drug and that others in that class aren't as effective. So changing those classes could be a serious problem for patients.

I agree with Jessie, your explanation is very helpful.

Maybe you need to investigate why your drug costs are so high compared to almost all other countries. My husband's prostate drug here in Canada costs $60 a month, in the US the exact same drug by the same manufacturer is $160 so $100 more. There is your problem.

I have always felt that laws, rules and regulations are written to be as confusing as possible in order to get you to sign up for more than you need.It's sort of being told that you must buy that additional warranty when you buy a car or appliance to protect you from something that may or may not happen in the future. Unfortunately, even reading the fine print doesn't help. Thanks for the help Ronnie, but I'm still confused. it still seems like this is another instance of fixing something that ain't broke.

Preventing mail-order pharmacies from charging lower co-pays would hurt many families financially. My husband needs 15 different drugs a day and half of them have a zero co-pay through the mail-order pharmacy for our plan. The walk-in pharmacy we use (a large chain store) charges anywhere from $7 to $45 and sometimes higher for the drugs.
I also agree with Vera about the cost of drugs in this country but I believe until Congress gets Big Pharma out of their back pockets, nothing will change. It is no longer "we the people" but "we the Congress".

I'm still angry with Obama for making his "no price negotiation on pharmaceuticals" deal with Big Pharma before the ACA debates even began. There were huge cost savings to be had there.

Fewer choices of plans is great if it simplifies by combining existed plans. It could, however, eliminate some options now available, and that would not be a good thing for those who need those particular options.

If I understand correctly that one of the changes would involve dropping coverage of certain drugs, then I'm opposed to that. There are many different kinds of drugs within the classes of antidepressants and immunosuppressants, and they are not all bioequivalent. Patients and doctors need choices.

Ronnie, Kudos for a great job of sorting out the basics of Part D-including the rant part.

Many of us remember what a struggle it was 3 or 4 years ago to get a Shingles vaccine under Medicare Part D.

I agree with the idea of Plan Choice Reduction. It'd not only elders who struggle with way too many choices. Accepted social science research indicates that at some point people just throw up their hands and can't choose anything, if there are too many choices.

I also agree that opening the program to additional pharmacies makes sense.

Thanks for the sorting of this information. I will be writing to my reps again. I'm pissed and always have been with the no-negotiation business. What a crock!

Ronni, how can we not feel abused when we read, "the number of choices is unnecessarily long and confusing" in this newest dance around health care?

Like you, Wyden is my senator; often puzzle who know his early days with Gray Panthers http://www.oregonlive.com/mapes/index.ssf/2013/07/wydens_political_apprenticeshi.html.

Once more, thanks for doing the hard work. Suggest letters to congresspeople include a link to this post.
Merkley and Blumenauer

Oops, my comment needed editing...Merkley and Blumenauer are my people in Congress along with Wyden.

As far as the no negotiation on drug prices - that didn't start with President Obama - that was part of the act that created Medicare Part D - under Bush.

Pied Type and others...
You cannot lay the blame for not allowing price negotiation for drugs on Obama. He was not president when the Part D plan was written or enacted.

That would be George W. Bush.

Oops, Nan...
Thanks for the drug negotiation update. I didn't mean to duplicate - we must have been writing at the same time.

As always the devil is in the details. I need to know more before either supporting the plan or opposing it. It is touted to save money and that's always good unless there are unintended consequences.

Thanks for the info. Luckily, I don't have to take any drugs on an ongoing basis, so I don't pay much attention. But I agree with you: I don't believe there should ever have been a donut hole, nor should there be the rule against price negotiation.

Yes, Part D originated with Bush. But Obama made a deal with Big Pharma not to touch their existing profits with the Affordable Care Act -- in exchange for their support of the act. One report on that: http://www.salon.com/2009/08/10/pharma/
Negotiations with Big Pharma for lower prices could have and should have been a part of ACA, but Obama took it off the table.

Can't we revisit that no-negotiating-with-big-pharma-for-lower-prices?

Really? Even if the Democrats lost the fight in the House, it seems like it would be great issue to campaign on.

Wouldn't it?

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