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POLICY/PHARMA: JSK on Medicare

My friend and health care sage Jane Sarasohn Kahn took offense at this paragraph from my recent post

    So absolute proof that the Bush administration’s efforts to defend the Medicare bill is nothing but PR. Silly really, as there are some good things in the bill (like coverage for the very poorest seniors) that they could at least make a half-assed attempt to promote properly.

Jane writes

    "I must respectfully disagree with you on your identifying coverage for the very poorest seniors in PDIMA as a "good thing." The poorest seniors have already been covered through Big Pharma cos. discount programs — like GSK’s Orange Card, the TogetherRx program which is a consortium of many pharmas (AZ, GSK, Janssen, Aventis, Abbott, Ortho-McNeil, Novartis, BMS), and others. You rightfully describe other aspects of the bill as being PR, and this "poorest seniors" aspect is, as well.All Congress would have had to do to extend Rx access to a greater number of seniors would have been to extend an already successful program that gets too-little PR in our sound-bitten era of "Big Tobacco, Big Oil, Big Pharma" to more seniors. The pharmas would extend the programs more in today’s environment. I’m no defender of all of Big Pharma’s practices, as you know–but Congress could have prevented the huge bureaucratic mess that will be the 2-year discount card program prior to the 2006 implementation of PDIMA. I am working with a pharma on their approach to the card (Phase I of PDIMA) and have attended two meetings in Baltimore with DHHS on the implementation schedule and requirements — and it really will be a bureaucratic mess that will add administrative costs to our already-costly system. This is even before the actual "modernized Medicare" kicks in in 2006. I cannot fathom the bureaucratic mess, donut hole and all, that will play out then.

Now I agree with Jane that there’s alot bundled in the bill that’s not helpful towards covering the poorest seniors. But while Medicaid does cover the very poorest seniors, there is another tranche of seniors who don’t have coverage and don’t do well. CMS reports that 76% of seniors have drug coverage. But that means that 24% do not. Of those that do not 19% of seniors without drug coverage spend between $1,000 and $1,999 a year on drugs and 4% spend more than $2,000. And of those that do have drug coverage 6% pay between $1,000 and $1,999 and 2% more than $2,000. So if you’re following along at home, 31% of seniors are paying more than $100 out of pocket a month on drugs. I don’t have the exact numbers to correlate drug coverage with income but the Stat Abstract reports that the median income of households over 65 was $23,000 in 2000, and 30% had incomes less than $15,000. So it’s pretty good bet that if your a senior with less than $1,100 a month in income, you’re likely to be paying over $100 of that in drug costs.

I’m sure Janes’s correct to say that the money could have been better spend subsidizing a discount card, even thought these programs don’t cover anything like the 30% of seniors who need help. Dan Burton would agree that the premiums and the donut hole combine mean that these costs won’t go to nothing, but there will be subsidies of premiums for the very poor and the bill is going to make the situation better for those who are spending hundreds a month on drugs. If I was the Administration I’d be pushing this very hard. What else can they do?

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