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Elders
be aware: The truth about Medicare Modernization Act is in the fine
print
Gema G. Hernandez, D.P.A.
Elders all over the country are asking questions about how the new
Medicare co verage is going to impact their wallets and their quality of
life. The information presented by the media on this subject has been
somewhat confusing. Even organizations that have traditionally advocated
for elders have no unified position that clearly explains to the public
what elders have gained or lost with these changes. To add to the
existing confusion, the President’s budget further increases
uncertainties about the challenges elders would face paying for their
prescription drugs and health needs.
A careful review of
the new Medicare law shows that it does little to reduce the escalating
costs of prescription drugs. The new Medicare plan fails to address the
fundamental problem of drug prices. It prohibits the federal government
from using Medicare’s purchasing power to leverage the cost of
medication. This means that Pharmaceutical companies will not be placed
in any financial jeopardy. On
the contrary, they will be able to further increase prices with no
opposition from their giant customer, the federal government. It
stands to reason that if the federal government is not going to use its
purchasing power to reduce costs, the cost of prescription drugs will
continue to escalate, reaching new heights after 2006 when the new
Medicare plan goes into effect.
It is difficult to
understand why the new Medicare program did not follow the Department of
Veteran Affairs format which effectively negotiates drug prices based on
the total number of participants they serve.
In the case of Medicare, the Center for Medicare and Medicaid
Services (CMS) was not as forceful, perhaps because it was not in the
future best interests of the political appointees that prepared the
plan, to limit or curtail their future employment opportunities. Since
the plan has been adopted, some CMS employees have secured excellent new
jobs as CEOs and CFOs of the same companies they used to regulate.
To further
complicate matters, the President’s budget does not provide funds to
implement the authorized Medicare Modernization Act estimated to cost 50
million. Specifically, if no money is secured how is this plan going to
be implemented? In addition, if there is no mechanism in place to
objectively compare the effectiveness of the various pharmaceutical
plans and products the public will never know if savings, any savings,
have been obtained resulting from the new Medicare program. It is also
important to note that the proposed research to compare pharmaceutical
programs was never intended to include the option of looking at the cost
of prescription drugs purchased in
Canada
. The fact that the administration eliminated that comparison is already
predisposing the outcomes to determine which course of action represents
true savings.
It is important to
notice that while the administration’s emphasis is in the need to
streamline federal and state agencies as a way to reduce costs, the new
Medicare plan supports expansion, if not the actual creation, of private
prescription drug plans (PPD). These PPD plans will be responsible for
negotiating prescription drug prices. Indirectly, elders are being
forced to participate in a private prescription drug plan because this
is the only way they will be able to reduce the cost of their
medication. Directly, the
administration is creating another layer, removing the elder consumer
from negotiating and obtaining the best price.
Elders will also be
facing higher deductibles to be paid out of their limited income.
According to the Congressional Budget Office, the projected rate of drug
price inflation will cause the deductible to rise from $250 in 2006 to
$445 in 2013. Despite the verbal commitment of the administration to
provide funding for Medicare, the average elder will soon be worse off,
with their prescription drug spending rising from 8.8% of median income
in 2006 to 12.3% by 2013 when the baby boom generation starts its
retirement years.
It is clear that for
the Medicare plan to work 32% of all elders must be enrolled in the
Medicare Managed Care plan over the next ten years. The enrollment plan
is now at a level of 9% mainly because many elders do not like the
Managed Care approach to health care. They see this as a way of
rationing health care and limiting options to select doctors, providers
and hospitals. In addition, Managed Care programs have been withdrawing
from a number of geographical areas where the number of elders is not
large enough or where the government reimbursement rate is not appealing
to Managed care organizations. The administration has not considered
them in their plans. How, we may ask, is the administration intending to
reach the 32% goal without forcing elders to accept what they have
already rejected.
For those elders
living in rural areas the new Medicare plan has no room for them either.
For minority populations, what I like to call, culturally distinct
elders, the system is so
complex and so culturally inflexible, that without education and
information they will never understand the options and their rights.
There are no plans to educate the elders because the more they read the
fine print, the more the understand the Modernization of Medicare the
less they like what they see. |