[Lancaster Online]

[Harl Delos]

I got a package in the mail from Highmark Blue Cross this week. They're my Medicare Part D insurance company.

The package I'm signed up for has four tiers of drugs - generic, Preferred Brand, Non-Preferred Brand, and Special, and from the first booklet I looked at, I could see they're raising the price of a month's supply of Non-Preferred Brands from $65 copay to $90 copay.

The second booklet was their drug formulary, telling which drugs are in which class. Synthroid is a medicine taken by many diabetics for an underactive thyroid gland, and they list it as a Non-Preferred Brand. My doctors tell me that it's one of the few drugs where you shouldn't accept a generic, because the various generics aren't bio-equivalent to the brand name or to each other. If your drugstore always used the same brand of generic, it'd be OK to take the generic, because you could adjust the dosage to what you need, but drugstores may change brands on you without notice if you're taking generics, leading to over-dosage or under-dosage.

But $90 copay for 30 Synthroid? Costco.com offers 100 for $63.32. CVS, which seems to be one of the most expensive drugstores around, only charges $29.09 for 30 pills.

When it costs you three times as much with insurance than without, something's rotten in Denmark.

An article in the Wall Street Journal this week said that health insurance for small companies is going up another 15% next year.

You'd think the health insurance companies were trying to get Congress to vote for a public option, and that the current GOP leadership in Washington was trying to destroy the party completely.

[skeptic2]

It may be more expensive to buy the drug through your part D carrier, but you will get through the doughnut hole faster right? Or is it just total expenditure that matters?

When you enroll in a Medicare Part D plan, you have to look carefully at what the drugs will cost during the doughnut hole phase. I'm sure though that there's no guarantee that those prices won't go up after you've signed up. Certainly Medicare Part D is unnecessarily complicated.

Smaller pharmacies will try not to change generic drug manufacturers as often and some will keep more than one kind around so that can give the same product for refills while using a new generic for new scripts. When you send away for drugs, all bets are off. Generic drugs vary 20% in bioavailability. For some (e.g. the anti-arrhythmic drug amiodarone) that variation is hugely important.

[Bustina di tè]

Certainly Medicare Part D is unnecessarily complicated.

When any legislation is unnecessarily, complicated, or makes no sense at all you can bet that some corrupt Senator or Representative took special interest money to make it so.
As written (for now, it can get worse in conference) the bill foisted on us by Obama-crats is health insurance industry welfare.
With the republican caused down-turn in the economy business are looking to cut costs and since they can't make us work for free (yet, give Obunko, Reid and Pelosi time) they are cutting on health benefits. This spells doom for the bottom line if you are in the health insurance business.
So, what better way to keep the money flowing in than to pay off some Obama Democrats to enact "health care reform" with mandatory insurance purchase as a central plank and a joke of a public option?

[Harl Delos]

It may be more expensive to buy the drug through your part D carrier, but you will get through the doughnut hole faster right? Or is it just total expenditure that matters?

There was a software company that went bust a number of years ago, that produced software for drugstores. The various programmers involved in that company each started up their own company, producing virtually the same software as the original company, and most drugstores use one of those packages. They don't have any provision in that software to deal with multiple insurance carriers, or to treat different drugs differently.

In other words, if you want to have insurance pay for drugs A, B, and C, while you buy drugs D, E, and F as generics out of your own pocket, it's a big hassle unless you do business with different drugstores.

But due to the new federal regulations intended to avoid problems with bad handwriting on prescriptions, an increasing number of physicians fax prescriptions automatically to the drugstore you specify. The one drugstore you specify. Their systems aren't set up to let you get generic allergy meds at WalMart and your statin at CVS.

My big objection is that insurance companies should not be allowed to charge you a higher co-pay for a drug than what the drug costs without insurance. Insurance is, by definition, a system for sharing risk, not a purchasing agent that marks up everything it buys for you.

When you enroll in a Medicare Part D plan, you have to look carefully at what the drugs will cost during the doughnut hole phase. I'm sure though that there's no guarantee that those prices won't go up after you've signed up. Certainly Medicare Part D is unnecessarily complicated.

I'm not talking about the doughnut. I'm talking about phase one.

Part D coverage is not allowed to change the co-pays during the year you've signed up for. They are not allowed to change a drug from Preferred to NonPreferred or Special during the plan year because the price has gone up. They are allowed to move drugs to a more expensive tier or remove it from the formulary entirely over concerns over safety.

The big companies introduce new Medicare D plans that are more economical each year, and raise the prices of the existing plans, hoping that people won't check prices and will simply allow their plans to "roll over".

This is very similar to the strategy they use for "guaranteed renewable" health insurance. They regularly offer new highly-competitive plans, but you have to be very healthy to qualify. They raise the price on all the plans each year, and encourage their healthiest customers to apply for their newest plan. As the healthy leave, they use that as an excuse (like they needed one?) to raise the rates on the other plans, and when only the extremely sick are left in a plan, they discontinue that plan because it's obviously unprofitable.

They advertise that they won't single you out for a rate increase; instead, they raise the rates on everyone, and single out the healthy people, suggesting that they switch to a more economical plan. And they guarantee that the plan is renewable at your option for as long as the company offers the plan, but they don't guarantee to offer the plan as long as you need it.

John D. MacArthur, the guy who owned Banker's Life (now the Principle Group) was once the richest guy in the world. He was asked by a reporter how someone could possibly start from near-nothing , as he did, and become the richest guy in the world without breaking any laws, and he said, "You can't".

He started out impoverished in the 1920s and bought the near-bankrupt Banker's Life with his mother for $2500 around 1935. He sold policies like crazy, and when a death claim came in, he wouldn't have the money to pay it, so he would simply deny the claim. If you fought aggressively enough and long enough, you'd eventually get paid, but many people gave up before that happened....

[skeptic2]

Wait, back up. You pay an annual enrollment fee and a small monthly premium for Part D, but except for the doughnut hole you don't pay a copay, right?

So when you pick a plan, the main difference is the cost (which is a copay for each drug, based on a tier system) during the doughnut hole, right?

Thr big picture is that reform should bring about improvement in Medicare Part D. Seniors showed up for public hearings to complain a few mos ago despite the fact that HB 3200 makes the doughnut hole go away.

[Harl Delos]

Wait, back up. You pay an annual enrollment fee and a small monthly premium for Part D, but except for the doughnut hole you don't pay a copay, right?

Wrong. You don't have ANY coverage in the doughnut hole (the gap).

So when you pick a plan, the main difference is the cost (which is a copay for each drug, based on a tier system) during the doughnut hole, right?

If you're healthy, the biggest difference is the monthly premium. If you're not, the biggest difference is the copays, and the drugs that aren't covered.

There isn't an annual enrollment fee. There are deductibles, but if you stay healthy and don't need any drugs, you don't pay the deductible.

You pay a monthly premium. The 47 part D plans available in Lancaster County range from $16.70 (First Health Part D-Secure) in Lancaster County to $143.60 (SeniorBlue - Option 1).

There are four drug payment stages.

Initially, you're in the Deductible Stage. You pay the full cost of your drugs until you hit your deductible. Deductibles in those 47 plans range from $0 to $310. Most of them are at zero.

Next, you're in the Initial Coverage Stage. You pay a co-pay for drugs on the formulary, provided that you've jumped through hoops they apply on certain drugs, and you don't use more of certain drugs than they think appropriate. For instance, most diabetic men end up with all their hormones screwed up, not just insulin. I mentioned thyroid earlier. Testosterone is another. Most of the plans make you jump through hoops to get testosterone paid for, or they just flat won't pay for it. You stay in the Initial Coverage stage until your total drug costs for the year hit $2,830.

Next, you're in the Gap. In general, you pay the full cost of your drugs until you hit $4,550 in out-of-pocket costs for the year. Some plans let you get meds at what they claim is the price they've negotiated with pharmacies, instead of paying full retail, others not. If it's a generic drug, you generally pay more for the drug than if you buy the drug without insurance, to cover the overhead of calling the insurance company, but if you buy as if you were uninsured, those drug costs don't count towards the $4,550.

Finally, in the Catastrophic Coverage Stage, the drug costs are split 90/10 between you and the insurance company, except your 10% is based on a phony-baloney price, and the insurance company pays far less than 9 times as much as you do.

Thr big picture is that reform should bring about improvement in Medicare Part D. Seniors showed up for public hearings to complain a few mos ago despite the fact that HB 3200 makes the doughnut hole go away.

Not for 132 years, it doesn't. It gets reduced by 13% for 2011, 5% per year for the next 4 years, 7.5% per year for the following 3 years, and then 10% per year until it hits 100%.

But if you think that means the gap is 87%, then 82%, 77%, 72%, 67%, etc., you misunderstand. The reduction isn't 5% or 7.5% or 10% of the original doughnut, but that percentage of the prior year's doughnut. There will still be a doughnut hole - small, but still there - until the year 2142.

And the bill was substantially different a few months ago.

[skeptic2]

Just curious, is there still a penalty for not signing up when initially eligible for the Part D plan?

As it stands right now, HB 3200 (which could change) will eliminate additional payments for Medicare Plus plans but it will reduce the doughnut hole as you have described.

[skeptic2]

Wrong. You don't have ANY coverage in the doughnut hole (the gap). If you're healthy, the biggest difference is the monthly premium. If you're not, the biggest difference is the copays, and the drugs that aren't covered. There isn't an annual enrollment fee. There are deductibles, but if you stay healthy and don't need any drugs, you don't pay the deductible. You pay a monthly premium. The 47 part D plans available in Lancaster County range from $16.70 (First Health Part D-Secure) in Lancaster County to $143.60 (SeniorBlue - Option 1). There are four drug payment stages. Initially, you're in the Deductible Stage. You pay the full cost of your drugs until you hit your deductible. Deductibles in those 47 plans range from $0 to $310. Most of them are at zero. Next, you're in the Initial Coverage Stage. You pay a co-pay for drugs on the formulary, provided that you've jumped through hoops they apply on certain drugs, and you don't use more of certain drugs than they think appropriate. For instance, most diabetic men end up with all their hormones screwed up, not just insulin. I mentioned thyroid earlier. Testosterone is another. Most of the plans make you jump through hoops to get testosterone paid for, or they just flat won't pay for it. You stay in the Initial Coverage stage until your total drug costs for the year hit $2,830. Next, you're in the Gap. In general, you pay the full cost of your drugs until you hit $4,550 in out-of-pocket costs for the year. Some plans let you get meds at what they claim is the price they've negotiated with pharmacies, instead of paying full retail, others not. If it's a generic drug, you generally pay more for the drug than if you buy the drug without insurance, to cover the overhead of calling the insurance company, but if you buy as if you were uninsured, those drug costs don't count towards the $4,550. Finally, in the Catastrophic Coverage Stage, the drug costs are split 90/10 between you and the insurance company, except your 10% is based on a phony-baloney price, and the insurance company pays far less than 9 times as much as you do. Not for 132 years, it doesn't. It gets reduced by 13% for 2011, 5% per year for the next 4 years, 7.5% per year for the following 3 years, and then 10% per year until it hits 100%. But if you think that means the gap is 87%, then 82%, 77%, 72%, 67%, etc., you misunderstand. The reduction isn't 5% or 7.5% or 10% of the original doughnut, but that percentage of the prior year's doughnut. There will still be a doughnut hole - small, but still there - until the year 2142. And the bill was substantially different a few months ago.

I read what you wrote, plus some more. There is a federal decription of a basic part D plan, but plans can vary from that and the majority do. One of the striking things about this as you sign up yearly is the need to have some idea of your annual drug costs and to try to predict where you will end up for the upcoming year. It would seem to me that a really large percentage of seniors will wind up in the "gap". What determines whether you will exceed the total for the gap may well be the cost of drugs during the doughnut hole phase and which could change.

HD, do you understand the fundamental logic of this? Again does it serve any purpose to structure it in this manner?

[Harl Delos]

HD, do you understand the fundamental logic of this? Again does it serve any purpose to structure it in this manner?

The catastrophic coverage part, I understand. Insurance is risk management. You don't buy insurance against regular and predictable costs, such as your underwear developing holes and needing to be replaced, but you do for the cost of rebuilding a house that burns down. Therefore, the catastrophic coverage is the most important.

Deductibles, I understand. That's your underwear and and socks.

However, if you're living on your social security disability insurance of $859 per month, and your maintenance drugs for whatever disabled you are $400 per month, that's devastating. So they set it up to cover most maintenance drugs for most people.

And the gap is due to Congress compromising between the pseudo-conservatives who want to get rid of social security and medicare, and the liberals who want to have full coverage from dollar one.

They say a camel is a horse designed by committee. That's really a libel on camels, who are quite remarkable and quite useful in their own right, but you get the idea. Congress is like any other committee - an organism with 535 pairs of legs, and no head.

The best and highest form of government is not a democracy, but a benign dictatorship. Dictatorships can be much more efficient. If only we could agree on what the dictator should do, we'd be all set. Unfortunately, I'm too busy to tell then every detail, and everyone else is wrong about something or other....