According to an independent analysis that was released last Monday, 19 million people are expected to collect savings from Medicare’s new prescription drug benefit, but 10 million others will have to pay the same if not more for their medicines.
The Kaiser Family Foundation reports that low-income Americans will be the biggest beneficiaries; they will receive government assistance that is projected to reduce their drug spending by 83 percent in 2006, when the program begins. The most assistance will go to the poor, and those whose drug bills exceed $5,100 a year.
For those that are between, there is help, but also a large gap, known as the “doughnut hole” – in which the government will not pay anything.
Prescription drugs are a key aspect in the medical care of many individuals, especially the elderly. Since Medicare does not cover most outpatient prescription drugs, elderly Americans often have trouble affording the drugs they need to stay healthy.
Diane Rowland, Kaiser’s executive vice president, told AP reporters, that another important issue is whether the new plan meets the expectations of the public. More than a third of those who enroll in the drug benefit will pay annual premiums expected to be around $420 and have no savings.
For 7.5 million people there will be no visible savings, because they spend little or no money on prescription drugs; but another 2.4 million people could see significantly higher costs because they are projected to lose more generous prescription drug coverage from their employers.
Nationwide, about one in 12 Medicare beneficiaries age 65 and older reported they could not afford to fill at least one prescription in the previous year, according to HSC’s 2001 Community Tracking Survey.
Dr. Mark McClellan, the Medicare chief, told reporters the number of people who might lose employer sponsored drug coverage would be smaller than the 2.7 million used in the Kaiser report, but the administration had not made their estimate public as of yet.
In addition to the premium, participants will pay the first $250 in prescription expenses. After that, the government will pay 75 percent of the next $2,000 in drug bills. Above $2,250 in prescription costs, the “doughnut hole” opens and beneficiaries will pay the entire bill until it reaches $5,100. At that point, called the catastrophic limit, the government will pick up all but 5 percent of the costs.
Bush’s Medicare plan prevents consumers from learning about the types of drugs offered by an insurer prior to selecting a coverage plan. Additionally, insurers may change the list of drugs that they will cover at will, even though enrollees are only allowed to change their plan once a year. The uncertain nature of drug lists is of particular concern to African Americans, who sometimes have different responses than whites to certain types of drugs.
A Congressional Black Caucus Foundation executive told AP reporters, "Thus health outcomes and the quality of care for African Americans could be severely compromised by formulary restrictions. Formulary restrictions that would force African Americans to obtain drugs not covered by their Medicare plan could have an adverse effect on African Americans struggling to afford their share of payments for unique and/or costly medication needs."