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Seniors Going Broke with Bush’s Medicare Drug Plan |
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For nearly 40 years, Paul Sauerland helped people in need while working as a social worker for Catholic Charities. Now when he is in need, the Bush-run federal government is failing him.
Like millions of other retirees, Sauerland thought he would save money on prescription drugs under the Bush Medicare Part D plan. But this year, he and his wife will pay $4,500 for drugs he paid $3,000 for last year—before the Bush “reform.” In fact, he’ll spend $3,000 in the last six months of this year alone for prescription drugs.
Under the new Medicare Part D rules passed by Congress in 2003, out-of-pocket prescription expenses between the annual amounts of $2,251 and $5,100 are not covered. This nearly $3,000 gap has been dubbed the “doughnut hole.” Of the 11.8 million Medicare enrollees whose plans include a coverage gap, the Kaiser Family Foundation estimates 6.9 million of them could hit the doughnut hole. A staff researcher says the real number may be higher.
Sauerland, 86, who has been blind since age two, reached the doughnut hole in July, after just six months in the Medicare program. He says he has no choice but to pay the cost because he needs his medications to keep his heart and thyroid conditions under control. But he’s not sure how much longer he can continue to pay out of pocket. His voice trails off when he tries to explain what choices he and his wife may have to make in order to afford the medicines he needs:
I’m so disgusted. I didn’t expect to get into this hole when the year was just about half over. I still have a half year to go. We got on Medicare because we were looking to save as much as we can. But when you’re living on a fixed income…if this keeps going on, I don’t know what will happen. We will have to give up something and cut down expenses some way. We’d be eating into our savings and that could be troublesome. I don’t want to think about it.
Sauerland, who lives in Hicksville, N.Y., doesn’t have the security of union-negotiated health care. He says the jobs he had with Catholic Charities weren’t unionized.
Millions of retirees are experiencing similar crises. A report by the Institute for America’s Future, the research arm of the Campaign for America’s Future, finds the average Medicare-eligible recipient will fall into the doughnut hole on Sept. 22 this year forcing seniors to pay the full cost of their prescription drugs on top of Medicare Part D’s costly monthly premiums. The doughnut hole coverage gap will increase over time as the catastrophic coverage threshold rises annually, swallowing up more seniors. As a result, 55 percent of those who hole will not be able to escape it, according to the report Falling into the Doughnut Hole: How Congress and the Drug Industry Created a Trap for American Seniors and People with Disabilities.
But not everyone is suffering under the new drug plan. A new report from the Center for Economic and Policy Research, The Origins of the Doughnut Hole: Excess Profits on Prescription Drugs, by economist Dean Baker, finds drug companies will make billions in excess profits under Part D. By calculating the difference between the average cost of seniors’ typical prescription medication and the cost when purchased in bulk through Veterans Affairs (VA), the report finds that for many of the drugs, the prices paid by Medicare insurers are more than twice as high as prices paid by the VA. Profits for the drug industry as a whole will reach more than $50 billion in the first full year of Part D, more than twice the size of the Medicare doughnut hole.
Seniors on Medicare are in this bind because the Bush administration has emphasized protecting the profits of pharmaceutical companies over reducing costs for consumers, according to the Alliance for Retired Americans. Under the Bush plan, Medicare is specifically prohibited from negotiating with drug companies for lower prices. Democrats in Congress introduced an amendment to require Medicare to negotiate for lower prices like other agencies such as the VA, as well as hundreds of corporations and several states, but the Republican majority defeated the amendment.
Ruben Burks, secretary-treasurer of the Alliance, says the organization is pushing for passage of legislation in the House that would close the gap in Medicare coverage.
There are ways to fix the donut hole situation. The Prescription Drug Savings and Choice Act (H.R. 752) is one solution that would lower drug prices and fill in the gap in coverage with the savings.
H.R. 752, co-sponsored by Reps. Marion Berry (D-Ark.) and Jan Schakowsky (D-Ill.), would require Medicare to offer a drug benefit and negotiate for drug discounts for enrollees in order to reduce costs and provide a permanent, guaranteed alternative to private insurance plans.
Berry, at a press conference announcing the bill, added:
The donut hole will create a dangerous ripple effect on the health of America’s seniors. Seniors will have to scale back on critical medications, which could endanger their health and increase health care costs over the long-run. This is the result of a broken benefit that defies common sense.
Under Part D, sicker patients with higher drug costs will end up not only paying more for their drugs but also paying a higher share of their costs than those with fewer prescriptions, says Marilyn Moon, director of health programs at the American Institutes for Research, who authored a 2004 report on Medicare for the Commonwealth Fund.
A senior with $1,000 in annual drug costs would pay $438 out of pocket under the plan, while a beneficiary with $5,000 in costs would be responsible for $3,500 of his or her total costs, according to Moon’s report.
Sauerland, who says he opposed the Bush plan, describes the whole situation as unfair:
The donut hole shouldn’t exist. The plan should be different. Medicare should be able to negotiate drug prices and purchase them for us like the VA. They shouldn’t have private insurers unless people want to do that. It’s very unfair to have a donut hole.
Last week, House Minority Leader Nancy Pelosi (D-Calif.) came out in support of legislation to do just what Sauerland suggested—make prescription drugs more affordable for seniors by allowing Medicare to negotiate for lower prices.
In a recent editorial, The Roanoke (Va.) Times said the whole Medicare D drug benefit is an “expensive failure” and should be completely revamped:
Drug and insurance company profits are rising because of Part D. UnitedHealth Group Inc. reported a 26 percent increase in second quarter profits, attributed to its Part D business. The plan’s transfer of millions of elderly low-income prescription drug users from Medicaid to Medicare’s Part D will likely result in a $2 billion windfall for pharmaceutical companies this year alone.
Meanwhile, cost estimates for American taxpayers continue to rise: from $400 billion over a decade. Prescription drug prices have shot up since the plan took effect, meaning the price tag will only increase more.
Congress should go back to the drawing board with the goal of producing a simple plan that offers real savings to seniors on vital medication, rather than billions of dollars in windfall profits to pharmaceutical companies and the insurance industry.
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Speaking of the VA….
VA overcharges/violations.
Sunday April 6, 10:13 am ET
By Hope Yen, Associated Press Writ
AP IMPACT: VA Workers Charge $2.6B on Gov’t Credit Cards at Luxury Hotels, High-End Retailers
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WASHINGTON (AP) — Veterans Affairs employees last year racked up hundreds of thousands of dollars in government credit-card bills at casino and luxury hotels, movie theaters and high-end retailers such as Sharper Image and Franklin Covey — and government auditors are investigating, citing past spending abuses.
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All told, VA staff charged $2.6 billion to their government credit cards.
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Yes, and then there are those few veterans, including my brother, criticize me for going after my claim, VA violation of 1722a, split pill co-payment overcharges. Well, along with the acknowledgement by many veterans, I’m glad I’m doing it. Because this is what happens when you are not vigilant, with nobody watching the store. Here are just a few remarks, regarding my claim, from those that apparently have more money than others, and march to a different drummer.
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“So what exactly do you want them to do? Other than waste the time and money of the VA dealing with a trivial claim so that they can’t help other veterans.”
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“It really bothers me to see people waste the VA’s resources on things like this. It probably cost the VA thousands of dollars to work this claim up to the point of the BOVA, not to mention a lot of time of the people working in the VA. Even if you would have won on the claim, it would have wound up costing the VA more money so they could set up a new accounting system to deal with the change. That would likely cost them hundreds of thousands of dollars and would not really have benefited anyone that I can see.”
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Veterans get prescription drug benefits? I’d love to complain about $8.00 prescriptions. Every attempt I’ve made to get into the VA Health System I’ve been told I don’t have any benefits.
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It’s annoying to hear some people complain about what they are getting while others of us are “locked out” of the system entirely.
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HOGWASH! I suggest you do some homework.
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No one is doubting your claim, as much as why you are doing it. What they are trying to say is, you are tying up valuable resources that could be better served to adjudicate an individuals claim that had to go the way of the courts. What they are saying, also, is be thankful you have the VA who charges much less a co-pay than what most greedy outside civilian insurance companies charge. When I had outside insurance, before I became TDIU, I was paying $15.00, $20.00, and $25.00 as my co-pays for my medication, so 8 dollars is fairly trivial an amount to pay for prescriptions, not to mention people that have to pay full price for medications…co-pays do not exist for them. So I do understand where you are coming from and where you are trying to go, it just seems like you are trying shove this issue down everyones collective throats to get your point. Good luck in your endeavors, yet I hope some other veterans claim hasn’t been backed up because of your want to change what seems to you to be an inequity seen only by you.
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The VA violation of 38 USC 1722a problem is not petty, or trivial as suggested, using the words of another veteran who thought that the VA money and effort should be spent doing the serious work of the VA in helping veterans. How did the VA employee do that? By living it up, buying and enjoying things for personal use on the government dime. My claim, VA violation of 38 USC 1722a effects all veterans, and I imagine most veterans, that receive VA prescriptions that require pill splitting.
If a veteran is charged $16 for, using the Board of Veterans’ Appeals description, of an actual dispensed 30-day $8 medication supply, add up this VA dispensed $8 overcharge by the well over 1.1 million veterans that require their medication be split. (You’ll be adding up just one months overcharges). All the while, employee’s using government credit cards for what-ever.
John E. Ormand, Jr. BVA Veterans Law Judge, writes, “Also, under 38 USC 1722a, VA may not require a veteran to pay an amount of the actual cost of medication and pharmacy administration costs related to the dispensing of medication.” And what is the dispensing cost for a 30-day supply? $8. Why then does this dispensed actual 30-day $8 supply cost a veteran $16? Because he is required to split his pill medication. In other words, you can have any amount for a 30-day, $8 supply, but if you are required to split any supply over 30 pills, the VA will double the copay cost. The USC or the CFR do not mention anything about doubling the cost of prescriptions, when the prescription requirement calls for the veteran split their pill medication.
Should I prevail, this is not money the VA would be losing, this is money the VA should never had taken from veterans in the first place. My claim was remanded back to the BVA from the United States Court of Appeals for Veterans Claims. I was notified of this remand on July 16, 2007. On Feb. 11, 2008, I called the BVA inquiring about my claim. I was told it was “coming back from the Court, but hasn’t reached us yet.” 4/10/2008, I called asking for it’s status. “Still at the Court of Veterans Appeals.” It’s now been 9 months! Are they not in the same town? Is this such a hot item that the VA does not want to adjudicate it? This is how our courts work. This is how the VA works. Think this is bad? You haven’t seen nothing yet. Wait till our men and women return from Iraq and Afghanistan.
VA prescription copayment studies
The following study is from “Reforming VA’s Medication Copayment Statute” by Timothy J. McDonald. “..graduate of the Health Law Certificate Program at the University of Pittsburgh School of Law and is currently serving as a Presidential Management fellow in the Patient Care Services Office of the Veterans Health Administration.” A link follows. This is followed by studies showing the effect of the VA copay increases.
“The limitation imposed by the copayment legislation that prevents VA from charging the veteran more than the cost of the medication to VA has led to at least one case before the Board of Veterans’Appeals (Board). 31 This case involved “pill splitting,” a practice where VA provides medication in a dosage that is higher than needed, and then has the patient split a single pill into two separate doses”
“However, the current medication copayment that many veterans are charged is based on outdated legislation…”
“This problem is not limited to cases where the veteran is splitting tablets. In fact, based on VA’s increased efficiency and price negotiation in the pharmaceutical arena, it seems very likely that under the current copayment plan many veterans are charged excessive copayments by VA.44”
http://www.va.gov/vbs/bva/manuals/vlr1mcdonald.pdf
Co-Payment Increases Result in Gaps in Veterans’ Prescription Usage
American Heart Association rapid access journal report:
Study highlights: — Cholesterol-lowering drug adherence drops with an increase in VA prescription co-payments.
DALLAS, Jan. 13, 2009 — Fewer veterans filled their prescriptions for cholesterol-lowering drugs after an increase in co-payment costs for prescription drugs, researchers report in Circulation: Journal of the American Heart Association.
http://www.reuters.com/article/pressRelease/idUS212289+14-Jan-2009+PRN20090114
Impact of a prescription copayment increase on lipid-lowering medication adherence in veterans.
http://www.ncbi.nlm.nih.gov/pubmed/19139387
The Effect of a Medication Copayment Increase on Metformin Adherence by Veterans with Diabetes
Rationale: Copayment increases have been shown to affect health care demand in many settings, and adherence to essential medications may decrease when medication copayments rise. In 2002, the Veterans Administration (VA) increased medication copayments from $2.00 to $7.00 per 30-day prescription fill.
http://www.allacademic.com/meta/p_mla_apa_research_citation/0/9/0/4/4/p90444_index.html