Seniors Still Awaiting Medicare Drug Benefit Post 2

/ May 11th, 2011/ Posted in Health / Comments Off on Seniors Still Awaiting Medicare Drug Benefit Post 2

Coverage for 50 percent of an enrollee’s pharmacy costs to a maximum benefit payable of $1,000 the first year, rising each year to a maximum benefit of $2,500 by 2009.

A catastrophic benefit for drug charges in excess of the maximum. The details of this program have not been worked out yet. Clinton and Gore have budgeted $35 billion to pay for this benefit from 2006 to 2010.

Premium support for low-income beneficiaries. Those under 135 percent of the poverty level would receive full payment support. Those between 135 percent of poverty and 150 percent of the poverty level would receive partial premium support based on a sliding scale.

Relying on private-sector pharmacy companies, such as pharmacy benefit management companies (PBMs) to administer the program and negotiate lower costs for seniors — including discounts for the drugs that seniors would be left to pay for because they exceeded the plan’s annual maximum.

A cost of $184 billion over seven years that includes a Congressional Budget Office (CBO) cost estimate of $130 billion for the government portion of the basic plan, an administration estimate of $35 billion for the catastrophic plan, and an additional CBO estimate of $19 billion in Medicaid spending in order to help subsidize low-income enrollees for the basic plan.

In the first year, an enrollee would pay $312 ($26 per month for 12 months) to get a benefit that would pay 50 percent of the individual’s drug costs to a maximum of $1,000 in total pay-out.

The Clinton/Gore pharmacy proposal is part of a series of administration reforms to the existing Medicare program. Generally, Clinton and Gore would continue with the existing Medicare fee-for-service plan with some modest changes, arguing that the existing plan is affordable because there are substantial budget surpluses coming in future years that will pay for the system.

Their approach is to take the 1965 program, make some relatively minor changes, and then pour expected budget surpluses into it to keep it afloat — to them the budget surpluses mean we don’t need to go through the pain of any kind of dramatic reform.

The Republican Approach
The Republicans have entered the Medicare outpatient prescription drug debate with an incomplete outline for a plan of their own.

Although many key areas of the plan are sketchy, my analysis of what the Republicans have said, as well as discussions with others, leads me to conclude that the final congressional Republican plan will propose the following:
Creating additional voluntary drug options for Medicare-eligible consumers to buy, rather than expanding the existing Medicare plan to cover basic drug costs, as Clinton/Gore would do. These options would be provided by private insurance companies offering Medicare supplement programs and would be purchased in the private market by beneficiaries.

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