Drug benefit

Senator Frist

Or boondoggle?

This morning the Senate passed the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. The bill will now go to President Shrub who is sure to sign it so he and Republicans can take credit for having delivered a great benefit to America's seniors. As usual, the devil is in the details.

I have a vested interest in this bill: I am diabetic, and I use a small pharmacy-worth of prescription drugs to manage it. The reality is that over time it will become more and more difficult to manage, not easier. And, I'm getting closer and closer to the age when the provisions of Medicare become personally relevant.

My prescriptions My pharmacopoeia. Annual cost: $6,103.72

Glutton for punishment. I actually watched several hours of the senate debate on C-SPAN. Blah, blah, blah, blah, blah. I actually downloaded the full text of the conference report, nearly 700 pages long, and tried to read it. I gave up; I found it largely gobbledygook.

Standard Benefit in 2006
  • $250 deductible
  • 75% coverage to $2,250
  • $3,600 out-of-pocket catastrophic coverage

In the end, I reduced the issue to pure self-interest. I dug out the paperwork for my own prescriptions and did the math. As is the case with many whose prescriptions are covered by insurance, I knew my co-payment but wasn't sure about the full costs. My six prescriptions plus testing supplies cost more than $6,000 per year. Yikes!

What's in it for me? So, how would I fare personally when this program kicks in in 2006?

Current insuranceMedicare drug benefit
Cost of prescriptions$6,100Cost of prescriptions$6,100
– Insurance pays$5,500– Medicare would pay$2,450
I pay (co-payments)$600I would pay*$3,650
Calculation
$250Deductible
$50025% of costs from $251-$2250; medicare pays 75%
$2850100% of costs from $2251-$5100, when my out-of-pocket costs would total $3600
$505% of costs over $5100, after my out-of-pocket costs total $3600

One surprise from this exercise was to find that my costs reach the "catastrophic" category. Imagine if I really suffered a catastrophe!

It is a virtual certainty that my drugs will cost more in 2006 than they cost today. By then it is also likely that additional drugs will be required to maintain control of my diabetes. Nor is there any guarantee that other health problems will not emerge. It's also likely that my costs under my current insurance will also grow between now and 2006.

This is more than an intellectual curiosity, of course. My employer-sponsored health plan is always subject to change and, in any case, is only transitional until the age of eligibility for Medicare.

The American health care system, in general, is a disgrace. There are far too many people without any health insurance at all, and the number only grows. And to rely on employers to provide health insurance is absurd; it is only an historical accident that this is so, not the result of a rational policy decision.

While it is true that adding a prescription drug benefit of any kind to Medicare is, in some sense, a step forward, the bill that has been passed has so many other provisions that are problemmatic, that I fear it may end up being worse than having no bill at all.

My guess is that the bill just passed will never be implemented. By the time 2006 rolls around, people will have had time to figure out what's really in it, what the implications really are, and there will be such an outcry that the government will be forced to rework it.