POLICY/HEALTH PLANS/PHARMA: Part D–a tale of two headlines

Most Beneficiaries Enrolled in Medicare Rx Benefit Satisfied With Drug Plan, Nearly Two in 10 Experienced Major Problem, Study Finds

or if you prefer

Poll shows 80% of those enrolled in Medicare drug plan satisfied

So go ahead and guess which headline came from a non-profit foundation’s news service and which one was from the inhouse newsletter for the trade group for health plans, which of course run the biggest Medicare PDP (Part D plans).

So when is a series of problems not a problem? Apparently if you don’t care much about consumer problems.

34%, of seniors who have used their drug plans have experienced what they perceived as problems, including 18% who described them as "major" problems and 16% who described them as "minor" problems. The experiences cited as problems included having unexpected costs, not being able to fill a prescription at the pharmacy, not receiving an enrollment card and having to change medications because a prescription is not covered. Ninety percent of seniors who experienced minor problems and 55% who experienced major problems feel the issues were resolved satisfactorily. (my emphasis)

So by my math 9% of Part D recipients have had major unresolved problems. Most consumer companies would freak out if they had that level of unsatisfied customers.

But don’t worry, for the $600 billion over 9 years (or whatever mythical number we’re now being quoted is the cost of Part D) that the taxpayer is spending, we’re sure saving all those recipients lots of cash right? Well not quite all—in fact not even most!

Of seniors who have used their Medicare drug plans, 46% say they are saving money on prescription drug costs, while 34% say they are paying about the same as before the drug benefit and 17% say they are paying more.

Oh well, at least the people who the bill was designed to help are benefiting. On Tuesday the NY Times told us that:

The summer revival in the pharmaceutical industry continued as Merck and Schering-Plough, two major American drug makers, reported second-quarter profits yesterday that were well ahead of analysts’ expectations. Medicare Part D, which offers prescription coverage for people over 65, is fueling the profits, as drug makers benefit from new prescriptions and somewhat higher prices for medicines, Wall Street analysts say. The number of prescriptions has risen 3 percent this year, and growth accelerated in June to more than 5 percent, according to a report from Merrill Lynch. Eventually, Part D could fuel a political reaction if prices continue to rise, but analysts expect the industry’s influence in Washington will delay any changes for years.

And the taxpayer isn’t getting screwed any more than they were going to be already in Part D are they? Well there’s this little nugget too

Overall prescriptions are also increasing, according to data from Citigroup and Merrill Lynch. For the year, total prescriptions in the United States are up about 3 percent, but they accelerated in June, rising 5.4 percent over the previous June. Drug makers have also increased prices for many popular drugs and are paying rebates to the private insurers who run the Medicare Part D program that are lower than the 15 percent rebates they paid to Medicaid.

Well at least the market is working—of course Adam Smith might not notice this as being the kind of free market he was thinking about.

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3 replies »

  1. Please provide some of the negative aspects of part D. I know of one. I signed up early last december prior to the deadline. My enrollement was complete for my wife and myself and after the last 7 months no problems.
    I received a checked from medicare. I called to find out why. The Medicare rep on the phone told me that the plan sponsor cancelled both my wife’s and my plan. Plan sponsor says they did not cancel our plan medicare says they sent us a letter explaining the cancellation any reason why I would be cancelled for no reason at all???
    Can they cancel my part D coverage without any prior notification???? is there no grace period to let me prepare.
    I have the means to cover cost, however I worry about those who have their plan D cancelled and are without the means.

  2. So it’s not a cost-free benefit to the elderly–and the ones who really needed it (the near poor) havent signed up because it’s too confusng, but the taxpayer gets screwed anyway. And PhRMA and AHIP make out like bandits. Just brilliant legislation.

  3. Two things. First, didn’t Medicare itself also have plenty of problems when it first started up in 1965?
    Second, with respect to the “only” 46% of beneficiaries that say they are saving money on prescription drugs under Part D, I always thought insurance was supposed to provide peace of mind that comes with protection against very high costs. Instead, our brilliant politicians, presumably with plenty of input from the AARP, opted to try to make this new benefit a good value relative to premiums paid for as many beneficiaries / voters as possible. If it were designed as insurance with a somewhat higher but still manageable deductible, the much maligned doughnut-hole in coverage, which is the source of so much consternation, could have easily been avoided without bankrupting taxpayers.