[I have posted a new story, The Question of a Woman President, this morning at blogher.org.]
When Medicare Part D – the prescription drug plan – was launched, very little seemed right about it. It was and still is nearly impossible to choose the most effective plan among the plethora of different drug formularies and prices from increasing numbers of insurers.
Then there is the infamous doughnut hole – the coverage gap after drug expenses of $2,250 have been reached – during which time the insured must pay full price for $3600 in drug costs. The so-called “catastrophic coverage” then kicks in, but only until the end of the calendar year when the entire procedure begins again.
But it is much worse than I thought. Call me stupid – I deserve it – because from the beginning I have misunderstood an important and devastating part of the coverage (or, rather, lack thereof). It entirely escaped my notice - until the annual EOB (Explanation of Benefits) from my Part D insurer arrived last week:
All this time, I assumed the $2,250 “initial allowance” before the doughnut hole, referred to my co-payments, that is, my out-of-pocket expenses. But no. I was shocked to learn that the $2,250 limit before the doughnut hole refers to total drug costs.
Maybe you already knew that. But Miss Smartypants here, who prides herself on her careful reading of facts, is shocked. I pay $28 per month for the one prescription drug I take and I assumed I would never hit the doughnut hole as a year’s cost to me is only $336. As it turns out, even at the full price, I won’t reach the doughnut hole, but given the price of drugs, there are very few people who will not be forced into a period of paying for the full retail price of their drugs.
Imagine you take drugs that at retail cost $600 a month, and with your Part D coverage, you pay $150 for them. If only your co-payment counted toward the initial allowance, you would not reach the doughnut hole in a year.
But because the insurance carriers count the full, retail price of the drug, you hit the doughnut hole in just under four months and the catastrophic coverage, wherein a lower co-payment prevails, does not pertain until you have paid full price for six full months.
And don’t forget that you would be paying premiums to the insurance company for the entire six months (half the policy year) during which you are paying full price for the drugs.
So on drug costs of $7200 per year, an insured pays approximately $5,100, which could be higher depending on the size of the monthly premium and the deductible. How is this good coverage, or even reasonable, for the price?
I suppose if your drugs cost $15,000 or $20,000 or more a year and you have a moderate pension in addition to Social Security, this isn’t a bad plan. But if your drugs cost that much and you are the average Social Security recipient with about $12,000 a year in benefits, Part D isn’t much help and there are elders who choose every day among life-saving drugs, food and heat.
It is long past time for the United States to catch up with the rest of the industrialized world by adopting universal healthcare. Yes, there are problems in Canada and in Great Britain and in France and elsewhere. But one-sixth of their populations is not going entirely without coverage or relying on emergency rooms for routine medical help as is so in the United States.
Perhaps a result of the disastrous Bush presidency is that universal healthcare will become an important issue in the next presidential election. Several announced candidates are saying those two words and maybe – don’t count on it – it is, this time, more than lip service to get elected.
If we can push our government into universal health coverage, it will cost every one of us more than we are paying now in taxes; ensuring that everyone of every age has access to medical care will not come free. But it will not cost us as much as private health insurance does now and it will cover every citizen including the one-sixth - think of it, ONE-SIXTH OF AMERICANS – who currently have no health coverage at all.