Monday, December 28, 2009

More Hole Than Doughnut

Color me skeptical, but I don't think Congressional Democrats quite get it when it comes to Medicare Part D, the prescription drug benefit. The bill as originally passed is defective in several of its provisions, but especially one in which elders who have to take expensive medications often are reduced to choosing between eating and taking their meds because of the so-called doughnut hole, a gap that occurs when a certain dollar level is reached and before the next level kicks in. Enough Medicare beneficiaries have been screaming about this that the Senate has agreed to revisit Part D, something the House has already done. At this point, neither body has really heard what our elders are saying.

From the Washington Post:

Six years after Congress added a prescription drug benefit to Medicare, Democrats in the House and Senate are poised to make a central change that they and most older Americans have wanted all along: getting rid of a quirk that forces millions of elderly patients with especially high expenses for medicine to pay for much of it on their own. ...

The Democrats and President Obama have been clear that the "doughnut hole," as the gap is known, would disappear gradually over the next 10 years. They have not mentioned that Medicare patients would, according to House figures, face a slightly larger hole in coverage during two of the next three years than they do today.

Proponents say the government can afford to eliminate the gap because the pharmaceutical industry would pay for the phaseout. But less than half of the $80 billion that drugmakers agreed to provide, under a health-care reform agreement over the summer with Senate Democrats and the White House, would be used to help fill the gap, according to Senate Democratic aides. Moreover, there are no budget forecasts far enough into the future to show how much the expanded drug benefit would cost the government once the gap is fully closed. ...

...The Kaiser Family Foundation, a health policy organization on whose figures House Democrats relied, estimated that, in 2007, one-quarter of the Medicare patients with drug coverage fell into the gap. Less publicized figures by the Centers for Medicare and Medicaid Services, the agency responsible for the program, show that about half that many fell into it. Kaiser and the agency disagree on how often people who reach the gap stop taking some of their medicine.
[Emphasis added]

You will note that both the House and the Senate are considering, among other things, a gradual phase-out of the doughnut hole over ten years. That's not much solace for those hit with the gap, some as early as May each year. Ten years is a long time to wait for someone who's 65 years old. The excuse is the one we've been hearing when it comes to health care reform right from the start: it's going to cost too much money if we eliminate the gap immediately.

Without a Congressional Budget Office prediction, the only estimate of the cost of filling the gap comes from the Medicare program's chief actuary, Richard S. Foster, who told House Republicans it would be $31 billion over the next decade. No one has analyzed how expensive the expanded drug benefits would become after that, although health-care options prepared a year ago by the CBO provided a clue: It said that, if the gap were eliminated right away, it would cost $134 billion over 10 years. [Emphasis added]

The article isn't clear if that $134 billion includes the $40 billion that the pharmaceutical companies are promising to kick in, but, hey!, I'm an optimist. Let's pretend it doesn't. Then the cost is only $94 billion over ten years, or $9.4 billion a year. How much will be appropriated to the wars in Iraq, Afghanistan and Pakistan (either in the budget or off)? How much gets cheerfully handed over to the Pentagon and their contractor buddies? How much was handed over to the banks and other mega-corporations deemed too big to fail? How much are we giving to the Department of Homeland Security to do its job (especially the TSA and ICE people)? Surely we can find some money that would normally be labeled "earmarks" that would be better spent on our parents and grandparents than on building bridges no one needs or wants. In addition to cutting out the excessive spending I just listed, Congress should let the tax cuts to the wealthy expire, re-implement the estate tax on a more rational basis than zero, and revisit the corporate tax structure.

If the Congress really wants to fix the mess known as Medicare Part D (and I'm not so certain it does), then it should start by eliminating the gap. It should also repeal the provision that forbids the government negotiating with the pharmaceutical companies on prices and it should stop favoring branded drugs over generics. These latter two moves will take some of the financial sting out of the first.

I'm sure there are other ways to finance the elimination of the gap. Mine were generated in just about ten minutes. Please feel free to add to the list in your comments here and to your congress critters.

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