Saturday, September 23, 2006

Part D Rip-off

I thought I had Medicare Part D all figured out last November after exhaustively checking out all the plans, the drugs they covered and the various deductibles. A second look has shown me I still have a lot to learn. The Medicare Part D law is probably one of the worst pieces of legislation ever passed by Congress. It was written by big insurance and drug company lawyers and not even read by most Congressmen. It has three purposes. Primarily, it was designed to bankrupt MediCare and force the government to abandon Social Security, as we know it. While the so-called Trust Fund (paper debt) of Social Security is budgeted by Congress to around 2040, this new drain of $120 Billion per year to the big drug manufacturers (Its second purpose) will break MediCare unless major changes are made. Third, it all but forces seniors to participate (with escalating penalties for not signing up) and thanks to an extra $99 monthly contribution from MediCare appears to save them between $60 and $98 a month off the full retail price of their total drug bill. Sadly, it also eliminates all previous discounts and takes away all incentive for seniors to shop around for better prices, thus favoring brand name pharmacies over discounters. But I already knew all that.

What I didn’t realize before is that you have to use the http://www.Medicare.gov website step-by-step formula to find out which plan is the best for you and know how to interpret the resulting list. The website designers did an excellent job of interpreting this horrible legislation and revealing the clever tactics of insurers. For example, one popular provider has multiple plans that differ primarily in deductibles. It is reasonable to assume that to determine the difference between two Part D plans from the same provider with the same drug list you could calculate the annual premium and add the $250 deductible to the one that has this deductible. It appears that the plan with zero deductible is a better deal, but it isn’t! The cost of the drugs from the same list, by the same provider is different under each plan and amazingly those who elect to pay the first $250 of drug costs each year wind up spending $375 less by the end of the year than those who took the plan that pays immediately.

The ONLY WAY to compare plans is by the total annual cost column that includes premiums, deductibles, and the cost of your particular drugs. This is provided at medicare.gov and the list is ordered by the total annual cost of the plans. Don’t make the mistake of skipping down to a plan with zero deductible thinking it will be cheaper than one with a $250 deductible by the same provider because you know you need more than $250 worth of drugs. You may save many hundreds more by paying the deductible yourself. It makes no sense but that’s how this law was written, to confuse everyone but the clever coverage providers.

Visit the medicare.gov website again, follow the steps, update your list of drug prescriptions and generate your personal list of local plans. Ask your doctor to put you on a substitute drug that is generic or a cheaper preferred brand of the best plan then recalculate so you can switch to the least expensive plan for you during open season each year between November 15th and December 31st.

Of course, compare the cost of Part D alone plus the premium of a Medigap Part C plan with the cost and coverage of an Advantage plan. The Advantage plan may appear cheaper but often pays much less for extended hospital stays. If you don’t follow the steps above carefully, you could be paying hundreds a year more than necessary for your prescription drugs under Medicare Part D from the same insurance provider. Also, write Congress asking them not to do the same lousy job with national health care. With insurers, drug makers, and our elite medical establishment in control of Congress, no legislation can emerge that will benefit working Americans.

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