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Medicare Drug Plan: More Trouble

With a new round of difficulties expected when the new Medicare Part D drug program’s transitional period ends April 1, consumer advocates have launched a “Campaign to Fix the Part D Disaster” and released a study showing that Illinois seniors and taxpayers could save billions of dollars if Medicare was allowed to negotiate prices with drug companies.

Meanwhile, service providers in the Make Medicare Work Coalition, consisting of hundreds of public and nonprofit agencies which have been counseling seniors and people with disabilities regarding drug plan options, will hold a summit meeting March 31 in Oak Brook.

On April 1 the plan’s transitional period ends and insurance companies will stop paying for drugs not on their formularies. “We expect to see a spike in issues when people realize their plans don’t cover all the drugs they take,” said John Coburn of Health and Disability Advocates, one of the conveners of the Make Medicare Work Coalition.

Many will have to undertake the effort of filing for appeals and exceptions, and some of these will end up in federal court, said Lynda DeLaforgue of Citizen Action/Illinois, which is spearheading the Fix Part D coalition.

“So we’re back in an HMO-type situation, with insurance companies overruling doctors’ prescriptions and making medical decisions for patients,” DeLaforgue said.

Also in April, thousands of seniors who qualify for Medicare’s “extra help” program will be automatically enrolled in drug plans, potentially repeating the chaos that ensued from automatic enrollment of low-income seniors in January.

DeLaforgue said many seniors are now experiencing “sticker shock” and finding themselves in the plan’s “donut hole” — where they pay for 100 percent of drug costs — much sooner than they expected.

Us. Representatives Jan Schakowsky (9), Danny Davis (7), and Dan Lipinski (3) joined groups representing consumers, seniors, and labor at the launch of the Campaign to Fix Part D on March 27. They released a report by the Institute for America’s Future which says Congress’s failure to provide a Medicare-administered drug plan option and its prohibition on negotiating drug prices will cost Medicare beneficiaries and taxpayers in Illinois $32 billion over the next decade.

Most of that amount comes from higher drug prices, said Jeff Cruz, co-author of the report. The current program “does nothing to keep prices down, in fact it encourages them to raise prices,” Cruz said, noting that the Congressional Budget Office has projected drug price increases of 8 percent a year, more than double the rate of inflation. Negotiated prices would keep increases closer to the rate of inflation, he said.

Cruz cited a Consumer’s Union report projecting that by next year, the average Part D participant who had no previous drug coverage will be paying more out-of-pocket for drugs than they did in 2003 without the plan.

The Campaign to Fix Part D is calling on Congress to require Medicare to negotiate drug prices, establish a Medicare-administered plan as an alternative to private plans, and prohibit insurers from dropping medications from their formularies during enrollment terms. The group is calling for extending the deadline for enrollment and closing the “donut hole” in Part D coverage.

DeLaforgue notes bipartisan concerns about Part D raised in the recent congressional budget debate, with resolutions passed by the Senate advocating extending enrollment and negotiating prices. She said President Bush has opposed extending the deadline and House leadership has “dug in their heels” on any changes in the plan.

“We will be working in Illinois congressional districts this summer,” she said, listing Mark Kirk(10), Jerry Weller (11), and Speaker Dennis Hastert (14) as “members of congress who especially need to hear from us.”

Meanwhile, hundreds of service providers are signed up for the Make Medicare Work Coalition’s 2006 summit, 9 a.m. to 3:30 p.m. on Friday, March 31 at the Doubletree Hotel in Oak Brook. The coalition is a collaborative project of Health and Disability Advocates, Progress Center for Independent Living and the Suburban Area Agency on Aging.

So far Part D is a good deal for people who didn’t have coverage previously, said HDA’s Coburn. “It’s better than paying 100 percent yourself,” he said. For people who had coverage, especially low-income people and people who are sick or have disabilities, “the transition is extremely rough,” he said. “It’s the most vulnerable who have been impacted most negatively.”

For Coburn, one “untold story” is the role of social service agencies who have been consumed with counseling seniors and people with disabilities. While Medicare has provided some agencies with funding for counseling, many nonprofits have taken on the task without funding.

“We all had full workloads before this,” he said. “At one point we were doing more than just counseling people on drug plans.”

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Category: health, seniors

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