POLICY: Medicare and HSAs: Ready for Their Close-Ups

My weekly column is up over at Spot-on, and despite trying hard to avoid it, I’ve been forced into the murky waters of Medicare Part D and HSAs. There are no comments there, so feel free to come back here and comment. In addition there’s a new section on Medicare Part D and the Drug Debacle over at TPMCafe which I will at some point contribute to, when Josh Marshall hits the correct button on his keyboard.

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  1. As regards the much-maligned “donut hole,” here’s something for y’all to file under “be careful what you ask for because you might get it.” The donut hole is pretty obviously an attempt to cost-shift onto the patients most able to pay. There’s coverage for the poorest patients, and a fairly nice deal for the healthiest. These are the folks below the first donut hole threshold. There’s also catastrophic coverage for the highest-utilizing and most-sick, i.e. those above the second threshold. In the middle, where probably about 80 percent of the patients are, there’s a coverage gap, where seniors will be paying out of their own pockets for their drugs, thus guaranteeing a revenue stream to the health plans and PBMs.
    That’s my view of why there’s a donut hole.
    But those of us who know what a scam this is do get something of a last laugh. This odd-ball creation is wreaking havoc on the accounting departments at the health plans and PBMs, because for the first two quarters of the year, they will look like they’re losing money on their Part D plans, because they’re paying out a lot in reimbursements, and only getting back monthly premiums. Then in the second two quarters of the year, when they pay out nothing (since most members will be in the donut hole by then) they’ll actually make back what they lost in the first two quarters, plus enough to make it all profitable by the end of the year.
    I listened to UnitedHealth Group’s fourth-quarter conference call to Wall Street analysts last week, and you wouldn’t believe the tap-dance CEO Bill McGuire had to do to explain this. It was almost comical.

  2. Matthew, you know Golden Rule was not the first to market with MSAs, that was Time Insurance Company. You know my agency wrote the first MSA in the USA. Why do you lie about this when I comment on this blog?
    We have 200,000 appointed agents, how many does Golden Rule have? Matthew has joined Hillary to fight the HSA, too pathetic. Don’t you get tired of losing?