By Lambert Strether of Corrente
This post — inspired by this Times article on Medicare Part D (non-paywalled duplicate) — is or was going to be my first foray into actual Medicare, as opposed to #MedicareForAll.[1] I say “was” because in fact my foray failed, as I recoiled in horror when I tried to understand the system. WikiPedia:
Medicare is further divided into parts A and B—Medicare Part A covers hospital (inpatient, formally admitted only), skilled nursing (only after being formally admitted for three days and not for custodial care), and hospice services; Part B covers outpatient services including some providers services while inpatient at a hospital. Part D covers self-administered prescription drugs. Part C is an alternative called Managed Medicare by the Trustees that allows patients to choose plans with at least the same benefits as Parts A and B (but most often more), often the benefits of Part D, and always an annual out of pocket spend limit which A and B lack; the beneficiary must enroll in Parts A and B first before signing up for Part C.
Four parts is three parts too many. It’s clear at the outset that Medicare has a serious neoliberal infestation problem, since complex eligibility determination — we call it “shopping” — is the hallmark of the neoliberal approach to the provision of services. (That’s why “free at the point of care” is essential to any #MedicareForAll program; it’s the only way to blow away the eligibility system, along with its gatekeepers and rent-seekers.) Clearly, doping out what my Medicare coverage should be will be a large, even enormous, tax on my time, and I don’t want to pay that tax just now.
So, a change of course (and a shorter post). First, I’ll provide a brief potted history of Medicare Part D; then I’ll look at the the issues that the Times raises; then — as a #MedicareForAll supporter — I’ll explain why Medicare Part D shouldn’t exist in the first place; and finally I’ll open the floor for readers to share their own experiences.
Medicare Part D was passed by the Bush administration in 2003[2], and is essentially a public-private partnership. It went into effect on January 1, 2006. From The Commmonwealth Fund in July 1, 2006:
Medicare Part D: A Successful Public–Private Partnership
Six years ago, millions of elderly Americans, most of them living on fixed incomes, had few ways to contend with the rising cost of prescription drugs other than to delay getting their prescriptions filled, take fewer pills than prescribed, or save on other expenses by such dire strategies as skipping meals. The problem was clear and the nation resolved[3] to embark on the most ambitious public-private partnership since Medicare was adopted 40 years ago.
For the benefit to succeed, it would demand unprecedented collaboration within the health care community and a commitment to public–private partnerships. In 2003, Congress passed the Medicare Modernization Act, challenging the marketplace to bring affordable prescription drugs—and peace of mind—to elderly Americans like Barbara Stetson[4], an 81-year-old Maine resident who has had three strokes and takes nine medications. She had been “frantic,” she says, unable to afford her medications and depressed by the fear that she had become a burden to her children by living too long—a tragic and all too typical situation.
[T]he new program is working well. Barbara Stetson and millions of people like her are no longer frantic. They have affordable drug coverage at long last.
What happened? The short answer is that both the private and the public partners have taken their responsibilities seriously and have worked exceptionally hard, cooperatively, and effectively to meet and overcome the inevitable problems accompanying the most significant strengthening of the Medicare program since its enactment in 1965.
(Anything that nudges Medicare toward privatization doesn’t “strengthen” it, but never mind that for now.) Fast forward twelve years, and there are… some snags. From the New York Times, the story I mentioned at the beginning:
The Large Hidden Costs of Medicare’s Prescription Drug Program
As a sidebar, the deck:
Premiums have risen very little in the years since Medicare Part D was introduced. But the same cannot be said of the burden on taxpayers.
As NC readers know, although the Times does not, Federal taxes do not fund federal spending; see Fed Chair Beardsley Ruml here. End sidebar. Quoting the Times at length:
Drug benefits are entirely provided by private insurance plans, with generous government subsidies. There are lots of plans to choose from. It’s a wildly popular voluntary program, with 73 percent of Medicare beneficiaries participating. Premiums have exhibited little to no growth since the program’s inception in 2006.
[But] in 2007, Part D cost taxpayers [no, it didn’t] $46 billion. By 2016, the figure reached $79 billion, a 72 percent increase. It’s a surprising statistic for a program that is often praised for establishing a competitive insurance market that keeps costs low, and that is singled out as an example of the good that can come from strong competition in a private market.
Much of this increase is a result of growing enrollment — it has doubled in the past decade to 43 million — and higher drug prices [and why, one might wonder, are they so high?]. But there is also a subtle way in which the program’s structure promotes cost growth.
So, “subtle” is the story; cf. Thomas Frank on how the professional classes love complexity for its own sake. Back to the Times:
When enrollees’ drug costs are relatively low, plans pay a large share, typically about 75 percent. But when enrollees’ drug spending surpasses a certain catastrophic threshold — set at $5,000 in out-of-pocket spending in 2018 — 80 percent of drug costs shifts to a government program called reinsurance. This gives people in charge of private insurance plans an incentive to find ways to push enrollees into the catastrophic range, shifting the vast majority of drug costs off their books. For example, they could be less motivated to negotiate for lower drug prices for certain types of drugs if doing so would tend to keep more enrollees out of the catastrophic range.
Reinsurance spending, which is not reflected in premiums, has been rising rapidly.
The Affordable Care Act hastened this growth. The law requires pharmaceutical manufacturers to pay some of the cost of the drug benefit. (The Bipartisan Budget Act of 2018 further increased how much manufacturers must contribute.) For the purposes of reaching the catastrophic threshold and triggering reinsurance, these industry contributions count as out-of-pocket payments for enrollees, even though they are not.
That means enrollees don’t have to spend as much as they otherwise would to trigger the reinsurance program. Although this is of great benefit to enrollees, it also pushes up taxpayer liability [no, it doesn’t] for the program.
Changing the extent to which manufacturer’s contributions count as enrollee out-of-pocket spending is one potential reform of the program. Other solutions include increasing the liability of insurance company plans in the catastrophic range and decreasing the liability of taxpayers.
This would have the effect of bringing premiums more in line with program spending. Doing so would “return Part D to the market-based program it was intended to be,” [Jeah Jung of Penn State University]. As it stands, there is a substantial divide between what Part D was billed as and what it actually is.
Two fun facts, neither mentioned by the Times: (1) the legislation enabling Medicare Part D forbids the Federal government from using its bargaining power to decrease the price of pharmaceuticals; and (2) the high and rising price of pharmaceuticals is largely due to Big Pharma’s monopoly power. With these two facts in mind, let’s reformulate the Times’s prose in simpler terms:
(1) Medicare Part D, through a familiar “shopping” experience, has fixed drug prices at a low level for years. Hence “consumers” love it.
(2) Medicare Part D enables drug manufacturers to pass on monopoly prices to the Federal Government, which cannot bargain them down. Hence Big Pharma loves it.
(3) Big Pharma has also figured out a way to game Medicare Part D’s complex eligibility requirements (“reinsurance”), making their profits even more grotesquely ginormous than they already are.
(4) Point #3 is what the Times thinks is the scandal, and not point #2, let alone #1 (neoliberalism’s quasi-religious belief in “shopping”).
(5) A system where the price of a product to consumers is regulated by the government, yet the where the cost of the product to the government cannot be regulated, is considered by economists to be “market-based” by “intent.”
Well, my head hurts. So at this point, I’ll appeal to you, readers to help me out with my foray into Medicare by sharing your own experiences. After all, things may not be as bad as I think! Millions depend on it, after all.
NOTES
[1] I’m incentivized on Medicare, since I’ve been “going naked” ever since the Crash — before that, employer-based health insurance was actually a thing for me, a routine thing — and in the near- to medium-term future I’ve got to figure out what to do about this, given whatever Medicare’s monthly costs might turn out to be, per this laughingly named “Medicare 2018 costs at a glance” page at Medicare.gov. It could be that it’s better just to put the money in the bank, and go the medical arbitrage route when or if the time comes. (There is also the question of whether I want to enter our brutal and horrid health care system in the first place; I’d rather die in a ditch in the tropics than be stuck in a bed in a nursing home, in front of a TV I can’t turn off.) You’d think there would be a simpler way.
[2] At the time, there was a good deal of whinging about mean Republicans (Kos; Rep. Louise Slaughter), but, as usual, there were enough Democrat votes to pass it in the Senate: Max Baucus, John Breaux, Thomas Carper, Kent Conrad, Byron Dorgan, Dianne Feinstein, Mary Landrieu, Blanche Lincoln, Zell Miller, Ben Nelson, and Ron Wyden. Why, some of them of them still Senators today! Although not Max Baucus, who readers will remember had protesters arrested in his hearing room; they were protesting his exclusion of any single payer advocates from his panel.
[3] We don’t seem to hear triumphalist rhetoric like “the nation resolved” any more, oddly, or not.
[4] I ran a search on “Barbara Stetson” in Maine, and came up with testimony from a “Barbara Stetson” in this interesting article on a Maine program for preventing falls, which Stetson attended, called “A Matter of Balance.” Buried at the very, very bottom left of the page is — hold onto your hats, here, folks — the fee: $20. Sounds small, but then again, that’s 20 cans of cat food at Dollar Tree. You could eat for practically a month on that! “Free at the point of care” really is important.
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The benefits of Medicare Part D were well distributed – when it was enacted, there was a frenzy for several months at the insurance broker down the hall from my office, he had to hire two or three more staff, just to keep up with enrollments in Part D. And making a hefty commission.
It was yet another Republican scam to convert public funds to private profits. Not surprised that Max Baucus voted for it – he was a very reliable purveyor of pork and patronage.
I’ve been on Part D for about a year and half. I take 6 generic pills for my heart, blood pressure and cholesterol. Under Pard D I pay overall about $20 more per month than I do if I paid cash which includes a discount provided by my pharmacy. It’s also about $30 more than I paid when I worked and had coverage. My pharmacy plan is the same under part D as I had under my employer’s plan. Right now I’m considering to risk future benifits and go back to cash. I just need to shop some pharmacies and online coupons.
Then pay cash or find a better Part D program. For myself it saves me about 30K a year.
Neither of you should have to “shop” for any of your pharmaceuticals. And, what pray tell, do you need over $30,000 per year for? Powdered gold mineral supplements?
That the subject of money is at all entered into the calculus that determines life or death is immoral.
Some medications are shockingly expensive. I know someone on an anti-leukeima drug that costs $14,000 a month and is looking forward to a competitor coming on the market at a mere $9,000 a month.
They should buy their own chemistry lab.
Sounds like the bought a congressmen instead.
Harvoni, a drug produced by Gilead, cost more $1200.00 per tablet. I had to take one table every day. Since each tablet weighs one gram and 28.3 grams is one ounce, this makes Harvoni almost 30 times the price of gold.
Medicare D has a donut hole, I had the choice of liquidating everything I own or stopping treatment before the prescribed 6 months. However, I was saved by a Hepatitis support group which payed the difference between what Medicare allowed and what the drug cost.
What happens to people who suffer from diseases for which support groups don’t exist?
My mother has something like 12 scrips, including one for an inhaler, and she pays over $300 a month for her meds.
I had to get an inhaler once when I had Bronchitis. Fortunately my insurance paid for it. The cost was $575 if I had to pay for it. The inhaler was supposed to last for a month , but after 2 weeks it quit working. That was fine since I fell better by then.
A bit OT, but a sad reminder of the history of the ACA “requir[ing] pharmaceutical manufacturers to pay some of the cost of the drug benefit.”
My only experience is with my low-end Humana-Walmart Part D policy ($20/month)–the cheapest Part D policy of them all.
One prescription has a list cash price of c. $600/month for which I pay $54.00/month plus of course the $20/month premium.
A second prescription has a list cash price of c. $200/month for which I pay $4.00.
But in reality the retail/list/cash prices are bogus, at least for those two meds. The internet is full of discount sites where–without any Part D–I can get prescription number 1 for $62/month and prescription number 2 for $7.00/month. I just pay online and take the receipt to a participating pharmacy (Walmart is one of them) that has my prescription and that’s that.
So, with Part D I am paying $78/month, including the Part D premium.
With no Part D premium and just using the online alternatives I would pay $69/month.
None of my drugs are new or exotic, so my experience may well be different for those who need those kinds of drugs. I have the policy in case I end up needing it. Plus, if you don’t enroll in Part D when you turn 65, there is a penalty attached for every year you were not enrolled if you end up enrolling in the future.
One more point. The list of drugs covered in my Part D plan is 116 pages of complexity with drugs listed in one of five payment tiers. The tiers interact with one another in the sense that co-pays for a tier 2 drug might count in your favor somehow in lessening your co-pay for a tier 4 drug. Something like that
as i understand it they can revise the drugs covered, and what tier they are in, so you have to keep checking before you renew your plan.
It’s actually a penalty that accrues for every MONTH that you are not enrolled. I fell into this category (briefly: 8 months) when my insurance exchange agent failed to enroll me properly (there’s an annual deadline) and the next enrollment window was eight months away.
I too discovered during than period that the scripts I was using cost less than the monthly Part D premiums. However, the Part D penalty is added to each and every subsequent Part D premium payment, until you no longer need health insurance; or say, the Hell with it.
Medicare, and Part D, could well be improved (there is lots of delay, obfuscation, and lack of cost control). But it’s less costly than the private insurance system.
Now, as for the health care system as whole: BEWARE! Lots of price gouging, general incompetence abounds. If you ever need to go into the hospital, bring your own personal doctor AND lawyer to navigate the nonsense.
Wow what a mess. Wife and I are both 65, she got Part D and it’s ginormously complicated. I did not… we went several years paying the TAX to the IRS for not enrolling in Obamacare, also ridiculously complex as well as expensive. With the penalty it was still cheaper for us to self-insure. Even the most catastrophic huge deductible Obamacare was nutso.
Neoliberalism with complexity… the lady who came to our house to explain ABCD brought with her a huge notebook. Several of my older bureaucratic-savvy friends just shook their heads when I asked them to explain a few things.
Insurance is deliberately obfuscatory, a feature not a bug.
And public/private stuff is a Deliberate Debacle. (Double D!)
heard that. i have a couple books on it and my head spins.
I have Part D and it’s been a Godsend, although I think it’s a scam that Medicare can’t bargain and we can’t buy drugs from Canada, or at least, not supposed to. The prices of drugs are criminal but you can often find them cheaper online, or do some research and get the same drug under a different name for less, too. They make up new names and new uses for old drugs.
Another trick is to check out the strength of the pill ordered. A strong pill might be cheaper than a lower strength med, if it is not used as often. If something is refused, try different combinations of attack.
You just have to find what the formulary is of your insurance and is your med on it? Even if it is, that could change at any time. Sometimes, it’s due to being expensive, and other times, I could see no reason at all.
I think Medicare covers the first six weeks in Long Term Care. They keep changing what is offered in the way of home nursing, if any.
You can’t buy from Canada because you are reimporting. I buy one scrip from Australia, but I have a local MD prescribe it.
Because who wants to think about it if you don’t have to, or even if you do.
Everyone believes they will live forever until reality sets in with that first health scare, then it used to be too late to buy health insurance. Medicare is a very good plan but there are things that need to be taken care of in it.
Lambert, do not go without Medicare, once you become eligible. It is still relatively cheap compared with all other options. The biggest problems with Medicare right now are: 1)You have to pay approx. $160 out-of-pocket annually, and there is no ability to pay the amount over time or “extra help” programs for low-income seniors;2)”Practice managers” at doctors’ offices try to make every visit into a Level 5 (highest complexity) appointment, and there is no recourse for complaining, because the doctors don’t want to get involved with the coding issues. Level 5 visits can cost anywhere from $25-$150 or more out-of-pocket, depending on the doctor’s hourly charges. Yes, you do have to “shop” a bit when you have Medicare: use Quest for blood work, since Quest accepts whatever Medicare is willing to pay, use independent facilities for MRIs (they are about one-seventh the cost of hospital-affiliated facilities), etc. Unless you have a chronic health condition, using Medicare Advantage isn’t a smart alternative for anyone on a fixed income.
As for Medicare Part D, there is Extra Help available, depending on your income level. If you only have Social Security for income, Extra Help can usually pick up 50% of the cost of your monthly premium, and prescription costs are limited to a maximum of 15% of the total prescription cost. Also, many Medicare Part D plans want you to pay $60-75 dollars–in addition to the cost of the prescription, after insurance coverage–for the first prescription filled each year. There are still a few plans that don’t require this additional premium, but they are slightly more expensive per month. Even with Extra Help, the Part D insurers are doing everything they can to discourage branded medicine in favor of generics. If you have a situation where the only product available is an expensive, branded medicine, it can become impossible to afford the medication without charity care.
there’s also a monthly premium for part B; you aren’t required to get it but it could save you a lot of money.
If you are eligible for both Medicare and Medicaid, aka dual eligible, then Medicaid will pay your Part B premium, your Part D premium, and enroll you in a Part F type of supplement that will pay deductibles and co-pays–just like private Part F plans.
At least that’s the case here in Iowa. Of course, Medicaid clawback provisions are in play when the beneficiary dies.
Yes, most states have dual-eligible programs; however, the eligibility requirements are incredibly tight. Here in Illinois, if you are a single person over age 65, you are only eligible for Medicaid if your income is less than $12,140.
For those over 65, big difference between Medicaid proper and the Medicare Savings Program under the Medicaid umbrella.
Each state has slightly different on income and asset limits as well as clawback. But the limit numbers seem to be in a similar ballpark.
In Wisconsin, for a single over 65, the counted income limit for Medicaid is around $590 per month or $7,080 per year with total counted assets of less than $2,000 (homesteaded house, 1st vehicle, irrevocable funeral trust are exempt). Stocks, bonds, retirement accounts, savings accounts, funeral accounts over $1,500, any licensed vehicle (e.g., 4-wheeler for farm use or a road camper to sleep in) beyond the first count toward the cap.
QMB under the Medicare Savings Program of the Medicaid umbrella, is the most generous of the plans. It pays the part B premium, the deductibles, co-pays and eliminates any balance billing as long as the provider is informed upfront. Of course that doesn’t stop providers from ignoring that piece. Similar features for the co-pays / deductibles on Medicare Part A. If Medicare doesn’t pay for it, then the back-end Medicaid piece doesn’t pay for it either. Even if Medicare does pay for something that doesn’t necessarily mean that Medicaid will pick up the remaining 20%. It depends.
The monthly counted income limit for QMB for a single over 65 is $990 per month or $11,880 annually. Counted Assets limits are around $7,500.
Then there’s SLMB, SLMB+ and QWDI also under the Medicare Saving Program. Higher limits but a lot less coverage.
If one qualifies for QMB, they qualify for ExtraHelp for prescription drugs.
I have been on Medicare for seven years now. I have never had to pay a dime out-of-pocket because all of my providers accept what Medicare provides as payment in full. When I get my statements I get to see what the suckers, er, “the ordinarily insured” pay. For example, my $1400 colonoscopy was over $4000 “retail.”
I bought a Medicare supplement plan and so far, none of my providers have bothered to bill them for anything.
I also buy my drugs from Canada, which is legal, there are just limitations on how much you can buy at one time. My asthma medicine, which at its cheapest here (Costco) was $305 for two inhalers, cost $98 from Canada … oh, and the inhalers were 25% more potent … and did I mention that for that price I got three, not two? … and they paid for the postage? (The drugs were manufactured under patent, not generic equivalents btw.)
You may not have noticed but Medicare is not free. It does come out of your pocket. There is a monthly premium that comes out of your Social Security check, if you have one. The annual Medicare deductible also comes out-of-pocket. And Supplemental Plans (there are nine of them) require a monthly premium. (Mine is $122/month.) The supplemental plans likely aren’t billing you because they only cover the 25% of costs above Medicare; which, likely in your case, is not often.
Here’s a pretty easy way to remember it, more or less (assuming I haven’t made any major gaffes; it’s been a while since I looked at it):
Part A – Hospital, Skilled Nursing, Home Health, Hospice
Part B – Physician visits and services, usually coupled with Part A, depending on what gets done
Part C – Managed Care (essentially, a giant HMO run by the private sector); if you’re in this, everything* is covered, but you have to stay ‘in-network’. No network? No pay. *in theory
Part D – I know next to nothing about this, other than it covers prescriptions. I’m reading your article for this.
Within these plans, how services are paid for, rates, eligibility, and other stuff is governed by highly complex and complicated rules (ever-changing, too), some seemingly arbitrary, others put in place to curb fraud, waste and abuse. By and large, Parts A and B have negotiated rates for services, though Part A tends to be flat(ish) per incident, while Part B is a fee-for-service model.
This is the barest *glance* at the tip of the iceberg. There’s plenty that can be fixed about Medicare, and plenty that it does right. As usual, much of the crap within Medicare is due to all sorts of neoliberal interests. It’s a labyrinth, and almost organic. What can one expect from a program created 60-odd years ago?
I’ve been on Medicare for 3 1/2 years now. I opted to get my coverage through the Blue Cross/Blue Shield Medicare Advantage program (Part C). It’s essentially a PPO, but BC/BS is the 900 pound gorilla in the Alabama health insurance markets, so there isn’t much competition and practically all doctors and hospitals in the state are “in network”.
I have the basic plan that has no additional cost beyond the Medicare Part B premium deducted from my Social Security check ($125 per month, higher for high income folks). Medicare Part D is included and I’m not paying extra for it. However, as best as I can tell, the Medicare Advantage plan doesn’t add anything to the Part D benefit.
The Part D benefit is a stinking morass of neo-liberalism. There are deductibles and co-pays depending on which of 5 Tiers a particular drug belongs to. These are related to whether or not a drug has generic versions, how commonly prescribed and how expensive it is, and, it appears, the nature of the condition being treated. The formulary is a few hundred pages long and the insurance companies move drugs between Tiers every year so budgeting becomes very difficult.
I’ve been taking one prescription for the past 8 years. When I first enrolled in Medicare I had a $20 co-pay for the first six or seven months of the calendar year. Then my cost jumped to about $300 per month for the rest of the year.
For this year BC/BS changed the Tier for my drug. Since January I’ve paid about $250 per month, but I have no idea if that’s going to go up or down in the next few months. I can tell that in a month or so I’ll be entering the “Doughnut Hole” in Part D, where the cost-sharing generally puts a bigger burden on the patient, but it’s hard to tell exactly how much and I haven’t had the time or motivation to pay that tax on my time.
Fortunately, I can afford the cost, but not everyone is so lucky.
Yes, if I had to pay $250 a month for a drug, I’d go see a naturopath. I know several.
that would be like having no coverage at all.
Not on Part D, because, so far (knock wood, toss salt over shoulder – which one, again?) we don’t need any that it would pay for. I don’t think they pay for saw palmetto. Which I’ve now planted, along with echinacea, just in case.
My wife probably wouldn’t take them, anyway. And I didn’t want to wade through all the verbiage. Worse, I haven’t read their manual, a thick tome that arrives every year. So sometimes there are surprises. On the whole, though, it’s a lot better than nothing.
The best thing about Medicare A, B, D is that as expensive and complicated as it is — it’s still much less expensive and less complicated and covers more than the health care plans available through my employer before I retired. Of course these days nothing is certain for the future.
Hear! Hear!
My Medicare coverage: A,B,D and Supplemental costs me ~$3000/year. Private Insurance would be double that.
HOWEVER, the elephant in the room is Big Pharma AND the U.S. hospital system. Errors and general incompetence abound in medical treatment. Hospital billing earns the Gold Medal!
I’m developing a new ap for Lambert and myself. ditchbnb.com. We could also sell part Ditch policies.
“Plus, if you don’t enroll in Part D when you turn 65, there is a penalty attached for every year you were not enrolled if you end up enrolling in the future.”
This makes Part D not quite “entirely voluntary.” IIRC, that penalty does not go away when one finally enrolls in Part D, so anyone worrying about getting older and needing more drugs either bites the bullet when first eligible or pays the penalty, which grows substantially until enrollment, forever. Note: “substantially” is relative. For me, I couldn’t afford one more thing coming out of my SS check.
As for Advantage plans, I am in a premium-free one because it pays for 2 dental checkups and cleanings annually, and it pays for an annual eye exam and some money towards eye wear. There are trade offs, but right now, those two things make it worth it for me.
Like traditional Medicare, the plan doesn’t cover things like root canals or extractions unless your health is impacted. I had a long-standing sinus problem [2+ years] that turned out to be caused by two of my teeth. If it had been caused by allergy as I had suspected, treatment would have been covered. Since it was a tooth problem and since I had to have some immediate work done with out-of-network providers, I had no coverage. I sold my car to pay for it.
Enough of my grousing.
Good heavens! You are not grousing, judytwoshoes, just telling your story. I am sorry that you had to sell your car to pay for your needed dental care. Proper dental care must be seen as being an integral part of keeping a body healthy. For example, untreated, low grade dental infections that affect the body’s immune system can lead to heart problems.
I took a Medicare Advantage plan when I became eligible last October. It was the most cost effective–only the standard part B social security deduction–and it provided a “qualifying” part D plan. Those two things preclude any future penalties. The providers seemed adequate but, as I was constantly reminded, the Mayo Clinic would not be in my future with that plan.
Having also gone “naked” for the 20 years prior to turning 65, I consume pretty much zero medical “care.” I take no drugs and don’t want any, and nursed a sprained ankle myself at home several years ago. I don’t trust the “healthcare” establishment as far as I can throw it, and, for now, prefer to stay away. I subscribe to the Barbara Ehrenreich school of giving up on “preventive” care.
https://lithub.com/barbara-ehrenreich-why-im-giving-up-on-preventative-care/
The complexities and uncertainties of the current Medicare system come as kind of a shock to people who are on the outside looking in and seeing what seems to be a cheap and easy substitute for “private” insurance in a for-profit “healthcare” world. I know they did for me. I never expected the holy grail of Medicare to be so fraught with anxiety and fear of making the wrong choice. After all, as the part B supplemental insurance salesman said, “You’re not gettin’ any younger. Things happen.”
The current state of the Medicare system is why I routinely opine here that “Medicare for All” should be more an idea of universal “healthcare” than an actual policy proposal. There’s a better, less expensive universal system to be had, but a lot of very fat oxes are going to need to be ruthlessly gored.
On my third Part D insurance plan in 4 years. There really aren’t that many available plans that are affordable in the Chicago area, or that have no deductible to meet. I live on Social Security Disability, which is several hundred more than the average income, but is far less by about $1000 than what’s needed to live a basic life in a high cost area (for which I am extremely thankful to have a housing voucher and a landlord willing to work with me when I got it a couple of years ago).
I don’t see any comments, or mention in the article, about the Part D “donut hole, aka coverage gap.” That was a feature of why the ten year cost was kept low in order to get the law passed, tho if I recall correctly the vote was intentionally kept open for hours in the middle of the night while the Republican leadership twisted arms and threatened congressmen in order to force passage in the end. The “donut hole”, which is due to be phased out next year I think, goes like this: there is a minimum amount where if your prescription costs exceed it, you’re responsible for payment out of pocket until you reach the maximum amount. For 2018 the minimum is $3750 and the maximum is $5000. So once you spend $3750 – which includes the cost of your insurance premium plus the full cost of your presciption, including your copay – you pay a percentage of your plan’s cost with no additional discounts until you reach the maximum amount, which is then considered catastrophic coverage and your costs are substantially less.
For me, the “donut hole” has limited my ability to take the drugs that work best in order to avoid getting hit with higher costs that I can’t afford. The formularies can be a joke as they impose restrictions on some drugs that seems rather arbitrary and don’t include some newer and/or older drugs, i.e. there’s an extended release version of one of my prescriptions that’s not covered, so instead of taking only 1-2 pills per day, I have to take 6 and get up a couple of times while sleeping so I don’t get off schedule. Tell me how that’s supposed to be beneficial to my health?
I refuse to buy a Medicare Advantage plan as I don’t think private insurance companies should be allowed anywhere near something that’s supposed to be for the public’s benefit. I don’t mind paying a monthly premium, but don’t think the money should line some insurance executive’s pockets!
You need to go see a volunteer at your nearby senior center or like facility. The volunteer is free and does not sell insurance. You have serious misunderstandings about how your Medicare coverage works and the options that may be available to you (which are different than for most of us because you are not on so-called “old age” Medicare but are on “disabled” Medicare).
Working backwards:
1. You have it backwards. Almost all of Medicare — Parts A, B and D and any private supplement that I can think of — is run by what you call “private insurance companies.” The exception is Medicare Advantage, which is mostly run by integrated health delivery systems and charities (although some are sponsored by what you call “private insurance companies.”)
2. See if you can change drug plans to get the medicines you think you need. Your doctor can also file an appeal on your behalf with your existing plan. Again, go to the senior center for the help you need
3. Given the income you claim in this comment, it is surprising that you are not eligible for Social Security Extra Help and a State Pharmacy Assistance Program (not available in all states). That would basically eliminate your drug costs no matter how high
Dennis, you are stating that ‘almost all of Medicare …. is run by what you call “private insurance companies.”‘
‘Traditional’ Medicare Parts A and B, is, I believe, totally administered by a government agency. Part D, of course, is administered by for-profit insurance companies, as are the Medicare Advantage (which one can opt for in lieu of ‘traditional’ Medicare) and Medicare Supplemental (which is in addition to ‘traditional Medicare) plans.
I would be interested in knowing the names of ‘charities’ that offer Medicare Advantage plans.
I have zero misunderstanding about Medicare, how it works or what options are available! There is no “old age” Medicare or “disabled” Medicare – there is only one Medicare that is run via our federal government and even the insurance companies who sell Medicare Advantage and Part D plans have to follow the government’s rules. Once someone is declared disabled by Social Security, they have to wait 24 months to become eligible for the one and only Medicare. I also have experience with trying to get my mother covered under an Advantage plan, which is also why I will never use anything except the original Medicare.
To answer your specific items:
1. There is no such thing as “integrated health delivery systems” or ” charities” that offer Medicare plans, so while some insurance companies align with other agencies, i.e. United Healthcare is offered thru AARP, they are still private insurance companies and expect to make a profit or they wouldn’t exist. As such, they have no place in a public policy.
2. As I stated, I’m on my third Part D plan to get the drugs I need at a premium and copay cost I can afford. My doctor has tried appealing on my behalf to no avail so we work within the parameters that exist. The formulary is run by Medicare rather than the different insurance agencies plans, so there is no shopping around to find one that is less expensive or offers what I need without running afoul of the “donut hole” midway thru the year.
3. Given that I didn’t state my actual income, what I will say is that it is more than the official federal poverty level and I don’t qualify for help with anything except the housing voucher.
Overall, Medicare is a good program and should be used as a starting point for discussions about how to ultimately move to single payer. Obviously there is quite a bit of work needed to educate the masses, but I have hope that we will eventually get there.
The calculation for hitting the donut hole is not only based on the patient’s expenditure.
Total drug costs are calculated by looking at the price of the drugs and include the beneficiary cost-sharing as well as the amount paid for by Medicare.
With this formula and the need for an expensive drug it doesn’t take long before one hits the donut hole.
Another punishment for being sick!
I’ve been on Medicare for 2 years now. I enrolled through a Humana Gold HMO Advantage plan, $0 additional premium over the $134/month I pay to CMS.
By and large, pretty pleased. Flu & pneumonia vaccines, $0. Prescription eyeglasses, $200 of $236 paid. Maintenance meds and vitamins, $0. Annual physicals, $0. Eye exam, $85. Only unpleasant surprise was $70 for a DPT booster vaccine?!?!? Seriously, I thought all vaccines were $0 under Obamacare.
I am working to improve my health with lifestyle changes like food and fitness. I look on my prescriptions and will hopefully be able to stop some of them. I am anticipating that changes will help my costs come down. I think that the government is making it too expensive to allow ourselves to be sick. If I am bankrupted by health care costs, at least there will still be Medicaid to add to Medicare.
I’m spoiled by currently being on an indemnity plan (no network) and I cannot imagine paying for insurance yet being at risk for paying full freight by going out of network. I loathe HMOs and PPOs.
There is also the issue that “what if you plan to be an expat?” I really need to get out of the US but perversely lack the time and pocket change to adequately research places that might have me.
Yves:
“what if you plan to be an expat? I really need to get out of the US but perversely lack the time and pocket change to adequately research places that might have me.”
Make the time. If your escape is Europe, then figure it out and compare. When I met you, you appeared to be smart enough to figure this out. Why now, the damsel in distress?
Half the cost in the increase in pharma has been not from usage, it has simply been from price increases. As you should know, Medicare can not negotiate healthcare costs for Pharma. Fight the issue and then fight why pharma is allowed to increase prices on everyday people which is passed along via insurance.
Cost wise for ~ $300 a month for an individual for Medicare Part B, Supplemental, and Part D level 1&2 is not terrible. When you apply those costs to a family of 4, it can be a burden. Fix the issue.
Medicare goes everywhere it is excepted and it is becoming the largest game in town after ESI. Over seas, it will payout up to $50,000; but then, there are other policies you can garner if traveling or your company can kick in too. I travel extensively too.
I know you mean well but you have absolutely no concept as to how chronically time stressed I am. Ten minutes is a lot of time for me. I have no personal leisure time. The last time I had a true social outing (non-family, which I regard as work) was the 4th of July, 2017. I don’t watch TV or movies, I haven’t even known what the current movies and books are for the last 6 years (as in I am too busy to even read reviews). I turn down virtually all conference and TV gigs. Etc.
To add to my note below – I think the community here would understand if you need to take some time to devote strictly to this goal. Better that we miss some content from you in the short term than for NC to suffer long term because you are burned out from living in the US.
Yes. I think this discussion came up a few years ago with Yves. R&R is essential to good health. Better to avoid the doctor visit than have to trust their diagnosis.
As for expat destinations, there is a NC expat commentarian from Uruguay who may chime in. Uruguay fascinates me; nearing energy independence (Wind/Solar), close to interesting travel spots, plenty of Internet access. calmer lifestyle.
Uruguay taxes all income for expats–even Social Security. Not a good place for retirees. There are only a few countries in Central and South America that don’t tax SS for retirees, and they really aren’t the safest places to live. They also tend to peg their currencies to the U.S. dollar so at least you don’t have exchange rate risk. Everywhere else has taxation that kicks in either immediately or, at latest, within 10 years. Then there is the issue of having to learn a new language at age 65 or older. Not easy. Finally, people forget that these days, most countries dislike Americans, unlike, say, 40 years ago when we still had a decent reputation. I’ve looked extensively into becoming an expat. Unless you have family and/or friends in the new country, language capability, an adventurous spirit, and a fair amount of retirement income, Americans are still better off in the U.S. for retirement.
Medicare is not available to for expats seeking health services in their country of domicile. Expats are free to pay the medicare monthly charges, etc but all health care must be delivered in the US.
A modest proposal, to help ensure you stay sane and keep Naked Capitalism viable: ask the community here for help with your plan. I’m sure there’s enough readers that are willing to help with time or funds for your search, given some basic but concrete parameters.
I’m in the unusual situation of having been a Union construction worker (Operating Engineers local 3) long enough to get retiree medical benefits– which include drug & vision, and for $50 more per month, dental. I pay $350 / month, (plus dental), but that covers me and any dependents / spouse (which is why I haven’t divorced my husband, though we haven’t lived together in 10 years). All of the coverages are pretty good. I pay about 4% copay on medical (20 % or 20%) and though I take few drugs, usual co-pay is $10. My ex has some medical conditions which make it quite worthwhile for him.
I would be afraid to go without coverage, since the person without coverage pays the highest conceivable amount for everything (non-negotiated rates)… though this perhaps applies more to medical / hospital expenses.
And I would pay more, if necessary, if in meant that another 30M people would have health care. Medicare for All – or any of the models of the more civilized world.
Thank you, Lambert, for this excellent and oh-so-very relevant post…Neo-liberal time tax….the burden on those least able to afford it…in so many places in our lives…aphids under the ants…
I’m glad Lambert is getting a real world education on Medicare, but disagree that “free at point of care” should be a goal because that’s a weasel word that maintains the possibility that you’ll get the bill later.
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I.e., Medicaid is free at point of care, but if you are over age 55, the state puts a lien on your assets to recover your Medicaid expenses after you die.
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We as a society need to think about fixing sick people the same way we think about fixing potholes — that it’s just something government is expected to do in a civilized society, and that it should be “paid for” from the general government budget, not with user fees. Whether new taxes are required to “pay for” it can only be determined in the context of the overall government budget and economic situation.
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I would not object strongly to a token copay — say $5 per doctor visit, or $5 per prescription, as a political compromise to give individuals “skin in the game.” I do strongly object to having a lien put on my home!
Those Medicaid expenses that result in a lien aren’t free, any more than electricity is free when someone turns on the light but only gets a bill later. In the interpretation of “free” that you apply “$5 at the point of service” wouldn’t exclude the possibility of “and get a lien on your property later.” If your argument is that people don’t have “skin in the game” (their lives!) unless they pay, make that argument, but not on the basis of what “free” means.
I agree there’s sometimes the problem that “free” has come to mean “free stuff that other people don’t deserve” but that’s a problem with how adversaries of the public good are better than advocates at using and capturing the language. We need to take it back, not surrender ground.
A few years ago, on an Amtrak train between Chicago and Denver, I talked most of the night with a man from New Zealand, who happened to be a staff consultant to the head of a NZ medical school. I was fascinated as he filled me in on the NZ system; single payer, government-run.
We talked a lot about prescription drugs and their costs. The NZ system copes by negotiating hard with drug companies and having a list of drugs that are available under the health care system. The ‘problem’ arises when someone, usually a child, has a condition for which only one, insanely expensive drug is available. There is a petition process but someone has to make hard choices. (Of course, in the US, if you are wealthy or have a good employer plan, this is covered. If not, you die. No hard choices here.)
As an aside, my daughter manages health insurance plans for a group of corporations. She told me recently of one employee, who has a child with a rare genetic condition; the drug that controls it ‘costs’ the plan one million dollars annually. Apparently there is a big business in re-insurance to spread the risk.
HR 676 (House M4A bill) fully covers prescription drugs (Section 201)
S 1804 (the Sanders bill) allows for prescription drug cost-sharing up to $200 per year (Section 202).
I thought you would be interested in seeing how the Canadian healthcare system handles prescription drugs – this example is British Columbia:
https://www2.gov.bc.ca/gov/content/health/health-drug-coverage/pharmacare-for-bc-residents/about-pharmacare
Here is the BC process for evaluating if and how a prescription drug will be covered by BC PharmaCare: https://www2.gov.bc.ca/assets/gov/health/health-drug-coverage/pharmacare/drugrevproc2.pdf
Note the inclusion of value for money and both provincial and Canada-wide price negotiations.