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Explaining the Unexplainable
July 13, 2006 • Volume 6, Issue 28

After the latest report from the Government Accountability Office (GAO), any fair-minded person will have trouble disputing that people with Medicare cannot get the information they need to make an informed choice of a private drug plan (Part D). The report found that Part D call centers gave inaccurate or incomplete answers, or no answer at all, to two out of every three questions asked. Based on those findings, the GAO concluded that people with Medicare "face challenges in obtaining the information needed to make informed choices about the PDP [prescription drug plan] that best meets their needs."

The GAO is not a partisan pubic relations firm. It is the most respected objective analyst that systemically and professionally reviews government programs.

Congress designed the Medicare drug benefit to be delivered through private insurance plans rather than directly through Medicare, claiming that informed consumer choice would lead to a better, customized benefit. Ignoring the overwhelming evidence that the private health care marketplace has failed to provide good, affordable health care coverage and that existing private Medicare HMOs have cost Medicare billions in additional costs, Congress insisted that “one size does not fit all,” as if health care can be treated like a pair of pants.

Although the choice people want is coverage of the drugs they need at a price they can afford, which is what Original Medicare offers for doctor and hospital services, Congress gave them a choice of drug plans that covers different drugs and charges different prices, forcing people to choose a drug plan that may meet their needs today but not tomorrow. The fact that no one can predict their health care needs was a reality ignored by the Congress that passed this benefit program and by President Bush who signed it into law.

Even ignoring the fact that no one can make an informed choice about an unknowable future, the GAO report shows that it is impossible to make an informed decision based on one’s current needs. The report found that Part D plan call centers:

Are the private plans to blame? Absolutely. Plan call center staff need to be much better trained and have the tools necessary to answer callers’ questions accurately, completely and consistently.

Is the Centers for Medicare & Medicaid Services (CMS) to blame? Absolutely, since CMS is not regulating the plans appropriately or demanding that they provide the information people with Medicare need. According to the Arizona Daily Star, CMS Administrator Mark McClellan said, "Medicare has never required drug plan call centers to provide detailed information about the prices of specific combinations of drugs.” So just how are people with Medicare supposed to make informed choices? Let’s not forget that a similar GAO report released in May 2006 found that operators at Medicare's own toll-free help line (800-MEDICARE) often provide inaccurate or incomplete information as well.

But Congress must bear the brunt of the blame for designing a program so complex that even the best trained counselor has to fall short. Part D is a cottage industry of for-profit insurers selling incomprehensible benefit packages to people with Medicare. It is not a Medicare benefit.

There are many tweaks that the Medicare Rights Center (MRC) can and has proposed to make the current Part D benefit hobble along. Yet day after day it becomes increasingly plain that the only way people with Medicare will have the health security they deserve is for Congress to go back to the drawing board and design a real Medicare drug benefit.

A Medicare drug benefit would let people use their Medicare card at any pharmacy, anywhere in the country. A Medicare drug benefit would allow the government to negotiate drug prices, leveraging Medicare’s 43 million members to lower costs for themselves and the American taxpayer. A Medicare drug benefit would guarantee people with Medicare can get the drugs they need.

The evidence is in. This privatized drug benefit does not work. Tell your friends, tell your neighbors, tell your representatives: it is time for a Medicare drug benefit. Use the Medicare Rights Center’s Resources for Understanding and Talking About Fixing the Medicare Drug Benefit.

Medical Record

“CMS asserted that our questions did not reflect the usual questions received by PDP sponsor call centers. As noted in the draft report, we selected topics that were addressed in the Frequently Asked Questions section of the Medicare.gov Web site and regarded by policy experts and beneficiary advocates as important to making an informed plan choice. Furthermore, at a May 2006 meeting with CMS officials, the agency’s Deputy Administrator stated that CSRs [customer service representatives] should be able to accurately answer all of the specific questions we posed during the study” (“Medicare Part D: Prescription Drug Plan Sponsor Call Center Responses Were Prompt, but Not Consistently Accurate and Complete,” Government Accountability Office, June 2006).

The Medicare Payment Advisory Commission (MedPAC), an independent, nonpartisan federal agency that advises Congress on issues affecting the Medicare program, in April 2005 recommended Congress set benchmark payments to Medicare Advantage plans at 100 percent of the fee-for-service costs of Original Medicare. MedPAC said payments to managed care plans are 107 percent that of average per-capita payments based on fee-for-service care. MedPAC estimates the change would save Medicare $1.5 billion in one year and $10 billion over five years (“Policy Issues in the Medicare Advantage program,” MedPAC Public meeting, April 21, 2005).

“Between spring of 2003 and spring of 2004, premiums for employer-sponsored health insurance rose by 11.2%...the fourth consecutive year of double-digit growth. Premiums continued to increase much faster than overall inflation (2.3%) and wage gains (2.2%). Since 2000, premiums for family coverage have increased by 59%, compared with inflation growth of 9.7% and wage growth of 12.3%” (Employer Health Benefits: 2004 Annual Survey, Kaiser Family Foundation, September 2004).

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