Your Weekly Medicare Consumer Advocacy Update
Fixing Medicare Part D
High Satisfaction with Part D Does Not Mean it Shouldn’t be Improved
Medicare Rights Center President Joe Baker recently contributed to The Hill Congress Blog with a post titled, “Rx for Fixing Medicare Part D.” The post explains that some have misinterpreted a recent survey that finds 90 percent of beneficiaries are satisfied with their coverage to mean that reforms to Medicare Part D should not be pursued. Mr. Baker says that Congress is mistaken in ignoring the potential for cost savings that could be achieved through Medicare Part D reform as well as needed improvements to drug coverage for beneficiaries.
The story of Joyce, an 83-year-old grandmother who called Medicare Rights’ Helpline, illustrates that Part D is far from perfect. Joyce struggles with thousands of dollars in drug costs each year for her twelve medications, while living on a fixed income of just $17,000 per year. During Medicare Open Enrollment, Joyce must sort through 62 drug plans to find one that has her drugs on its formulary, has her drugs in the lowest tier, has her pharmacy as an in-network preferred pharmacy, and has the lowest overall cost. Daunted by this overwhelming process, Joyce did not switch her drug plan for many years, despite annual changes to her drug coverage and costs.
Unfortunately, as suggested by a recent Kaiser Family Foundation study, this is not a unique situation. Legislation has been proposed to implement needed Part D fixes:
- Medicare Drug Savings Act (S. 740/H.R. 1588): proposes to restore drug manufacturer discounts for low-income Medicare beneficiaries, saving $141 billion over ten years without compromising access to medications.
- Medicare Prescription Drug Savings and Choice Act (S. 408/H.R. 928): proposes to create a public drug benefit that would allow Medicare to administer prescription drug formularies and negotiate drug prices, while making it easier for beneficiaries to understand which drug coverage best meets their needs.
Medicare Premiums and Deductibles Hold Steady for 2014
Earlier this week, the Centers for Medicare & Medicaid Services (CMS) announced the 2014 Medicare Part B premium will remain $104.90 per month, the same as in 2013. The Part B deductible will also remain the same at $147.
CMS credits measures introduced by the Affordable Care Act (ACA) for the stable cost sharing beneficiaries will experience next year. These measures include:
- New tools to increase fraud prevention and detection that enhance data coordination among government agencies, enforce stricter penalties for those found guilty of fraud, and stop payments to providers who are being investigated for fraudulent charges
- Incentives for doctors and hospitals to provide better quality care to Medicare beneficiaries, including increased payments to doctors who provide primary care services and to doctors who report their data
- Lowered payments to hospitals with high readmission rates for certain conditions to encourage hospitals to improve quality of care
- Diminished overpayments made to Medicare Advantage plans. Before the ACA, the federal government paid private plans 9 to 13 percent more per person than it would cost to cover a person with Original Medicare. Now, payments to Medicare Advantage plans are being phased down to bring them more in line with Original Medicare payments
These rules are estimated to save the Medicare program billions of dollars over the next 20 years. These cost controls are already taking hold, as evidenced by unchanged Part B cost sharing.
Yesterday’s news on stable Medicare cost sharing adds to the growing list of improvements to Medicare made possible by the ACA, such as cost savings on prescription drugs for beneficiaries in the doughnut hole. According to CMS, “…since the Affordable Care Act provision to close the prescription drug donut hole took effect, more than 7.1 million seniors and people with disabilities who reached the donut hole have saved $8.3 billion on their prescription drugs.” Remember, the doughnut hole began to close in 2010, when the Affordable Care Act was signed into law. Since then, it has closed more each year, and in 2020, the doughnut hole will be eliminated altogether.
Joe Baker, President of the Medicare Rights Center, offered this conclusion, “In other words, the Medicare verdict on the merits of the ACA is in: it continues to deliver for people with Medicare.”
Volume 4, Issue 42
Your Medicare drug plan costs can change every year depending on what plan you have. The following costs contribute to your total annual Medicare drug cost:
- Monthly premium: In 2014, the national average monthly premium will be $32.42.
- Deductible: The maximum deductible in 2014 for Part D plans in $310.
- Copayments or coinsurances: The amount you pay depends on your plan and what coverage phase you are in.
- Deductible phase: You pay the total cost of your drugs until you reach your deductible.
- Initial coverage phase: During this phase, you pay the copayment or coinsurance determined by your plan.
- Coverage gap (doughnut hole): After you have reached $2,850 in total drug costs in 2014, you enter the coverage gap. During this phase, you pay 47.5 percent for most brand name drugs and 72 percent for generic drugs.
- Catastrophic coverage: After you have spent $4,550 out-of-pocket in 2014, you reach catastrophic coverage. During this phase, you pay 5 percent of the cost of each drug, or $2.55 for generics and $6.35 for brand name drugs, whichever is greater. The way Medicare calculates the amount you have spent changes depending on your phase.
- Pharmacy network status: Your costs change depending on whether you order your drugs through a preferred, non-preferred, or mail order pharmacy.
The Medicare Rights Center is one of five organizations to receive a major national grant from the federal Administration for Community Living’s Senior Medicare Patrol (SMP) program. The grant will allow Medicare Rights to expand its Medicare Minute program through a partnership with SMP.
Additionally, Medicare Rights released a formal evaluation of the Medicare Minute program conducted by a Columbia University-trained evaluation team. Medicare Minutes currently reach more than 50,000 people each year, and the program is made successful by:
- Monthly presentations that build rapport among volunteers and audiences
- Passionate volunteers
- Affordability for local organizations
- Simply and clearly presented Medicare topics
- Audiences that are encouraged to participate and are referred to local resources