Entitled to Know

A new issue brief from the Center for Economic and Policy Research confirms the bad news that seniors who get their prescriptions under Part D already feared...their costs for drugs are skyrocketing.

According to "Changes in the Costs of Medicare Prescription Drug Plans, 2007-2008" , the average Part D premium will rise by 24.5 percent from 2007-08 meaning an average premium price of $293 per year, or $57.70 more than last year.

The report also finds that an average of 20% of the private plans offering doughnut hole coverage last year are dropping that coverage in 2008...leaving more seniors vulnerable to huge out-of-pocket costs. Combine all of this with increases in co-pays, ever-changing formularies, and pricing tiers and it’s easy to understand why seniors find the Part D morass so hard to navigate.

And without fundamental reforms to the prescription drug program, these problems will only get worse over time.

It’s Medicare Open enrollment time again. A painful annual ritual for American seniors who, in order to receive prescription drug coverage under Medicare’s privatized Part D program, must wade through pounds of statistics, charts and cost analyses just to determine if their current plan will even serve their needs next year.

Why, is this so complicated? Welcome to the world of privatized Medicare where each year most of these private insurers switch their formularies (in other words, drop drugs), require generics and increase premiums and co-payments. 75% of seniors will face a premium increase this year if they don’t switch plans.

However, it truly could be hazardous to beneficiaries’ fiscal and physical health if they don't shop around rather than stick with their current plan out of loyalty, confusion or fear of the unknown.

According to the National Seniors Law Center, the premium for the least expensive plan in New York will go up 167%, 90% in Florida and 44% in Pennsylvania. More than 2.5 million low-income seniors must switch plans this year to avoid having to pay out-of-pocket costs for the first time.

A survey by the consulting firm, Avalere Health, reports that in many states Part D premiums are doubling for the second year in a row. The popular Humana PDP Standard Plan charged $6.44 a month in Maryland when it first marketed its plan to seniors, two years ago. Last year’s premium doubled to $13 and now the premium will more than double again to $27.20. More than 80% of Part D enrollees are in the top ten drug plans and all but two have raised their premiums. AARP’s Medicare RX Plan-Saver is the most popular plan and, according to Avalere’s research, will increase its premium an average of 65% in 2008.

But as the insurance industry knows very well, it’s human nature is to stick with what you know. So far, that has been true for Medicare beneficiaries even to their detriment. The increasingly daunting task of analyzing a myriad of private drug plans’ (52 drug-only plans nationwide in 2008) formularies, co-payment, and premium schedules each and every year is an absurd burden which benefits insurers not seniors.

It didn’t have to be this way. Seniors want and need a prescription drug benefit under Medicare which would provide stable and consistent coverage which manages costs with no gaps in coverage like the so-called “doughnut hole”. What they’ve gotten with this privatized program is an overly complicated process that puts insurers’ bottom lines ahead of seniors’ needs.

For more information on how to navigate the Part D enrollment maze here is a link to our Frequently Asked Questions guide.

You can also find out more about the privatization of Medicare and Part D on our website.

Only in Washington could a 14% increase in prescription drug premiums for seniors be "spun" to sound like good news. That’s CMS’s strategy in announcing next year’s Part D premium hike. The administration’s logic goes something like this: since Part D isn’t costing as much as we first predicted seniors shouldn’t really mind double-digit premium hikes.

Here are the basics on the 2008 Part D premium: starting January 1 seniors’ average Part D premium for basic coverage will increase from about $22 this year to $25 next year. What CMS doesn't tell you is that in addition to this premium hike, beneficiaries will also face higher deductibles and a growing “doughnut hole” which will remain unchecked as long as healthcare costs continue to skyrocket.

By 2014, the Medicare's Trustees expect monthly Part D premiums to increase to $64.26 , the deductible to rise 75% to $457, and the $2,850 “doughnut hole” to become a yawning gap of almost $4,983.75.

CMS is also quick to remind everyone that if seniors don’t want to pay more they can just go shopping for another plan. As if choosing a drug plan for each of the first two years hasn’t been confusing enough!

It's really been a good week for drug makers. Not so great for seniors facing high prescription drug bills. Consider this interestesting pair of stories today.

A new report by Families USA shows the prices for drugs in the Part D program are rising at four times the inflation rate. This mirrors earlier findings on what seniors enrolled in Part D are really facing.

Not so coincidentally, the Associated Press reports that first quarter profits for three top pharmaceutical companies showed double-digit jumps. One analyst, Steve Brozac with WBB Securities says, "The demographics lean toward the pharmaceutical industry, no doubt about it."

After this week's Senate negotiation vote it's clear Washington does too.

By Maria Freese, NCPSSM Policy Director

The failure of the Senate to take up S.3 today is another clear sign that the drug lobby still carries a lot of weight in Washington.

So great is their fear of the power of negotiations, drug companies and their allies pulled out all the stops to deep-six a bill that barely scratched the surface of improvements that need to be made to the Part D drug program. Tens of millions of dollars have been spent on advertising and lobbying to kill a bill that does nothing more than repeal the current prohibition against Medicare negotiating with drug companies to get the best price for seniors. Since the Secretary has already said he will not exercise negotiating authority even if it is given to him, one has to wonder exactly why the drug companies are so afraid that they wouldn’t even allow the bill to come up for debate.

A profit-making enterprise doesn’t spend that kind of money unless a lot more is at stake – billions of dollars that come from the pockets of every single senior who has signed up for a drug plan. Seniors understand what’s at stake in this debate. They cast their votes in November against the status-quo, business as usual, business comes first thinking that says industry profits are more important than what’s best for American citizens and taxpayers.

A vast majority of voters want negotiation…a majority of the Senate does too. Unfortunately today, millions of dollars spent by the drug industry seemed to matter more.

Want to know how your Senator voted? Here’s a link to the final vote count. But don't be surprised to see Majority Leader Harry Reid's vote listed as "No" He switched his vote at the end as a procedural move to allow possible future consideration of S.3. Something our 4 million members and supporters will be working hard to ensure happens.

Hard to believe but it's true. The Senate won't even debate allowing Medicare to negotiate for lower drug prices. Senate Republicans blocked this critical vote showing once again that Drug Industry lobbying trumps seniors' needs. Following is a statement from our President/CEO, Barbara Kennelly.

“The vast majority of Americans want Medicare to negotiate for lower prescription drug prices. Seniors and their families know there is no logical reason the federal government should be prohibited from negotiating with drug makers except to preserve industry profits. Part D is legislation written by and for industry and drug makers have spent millions ensuring it will remain so. Senators were given a chance to correct their mistake and put seniors’ needs ahead of corporate profits. Unfortunately today, they made the same mistake twice and American seniors will continue to pay the price"

The National Committee and its 4 million members and supporters will continue to push Congress to make desperately needed reforms to the flawed Part D legislation. More than 200-thousand letters will go to Capitol Hill this week reminding lawmakers that this debate is not over and seniors will continue to fight for a prescription drug plan that works for its beneficiaries.

The Senate is debating the Part D Drug Negotiation bill, S.3, this morning. Chances are there won't even be a vote on this legislation because the GOP has threatened to block a full debate and vote. What a shame.

The Senate has a chance to fix a mistake made in the first Part D legislation which ties Medicares hands and prohibits negotiation for lower prices on prescription drugs. This is legislation written by industry and for industry and drug makers have spent millions making sure it stays that way.

We'll have more as the morning business continues.

The Senate Finance Committee passed the Part D drug negotiation bill late Thursday night allowing the federal government to negotiate with drug companies for lower prescription drug prices. The committee's vote was 13-8. The Associated Press has coverage of the debate. The full Senate is expected to vote sometime this week.

It will be a busy week with activities planned in advance of the Senate vote...more on that soon.

Keep your eyes open for activity in the Senate over the next few days on Medicare drug negotiation legislation. The Senate Finance Committee will markup S.3, the Medicare Prescription Drug Price Negotiation Act of 2007 at 6:40p tonight and the bill is expected before the full Senate next week. Language in the Senate bill doesn’t go as far as HR 4, the House version (which the President says he’ll veto) and according to the New York Times today the White House is also working against this Senate bill.

The vast majority of Americans support allowing Medicare to negotiate for lower drug prices but the drug industry has spent millions in advertising and lobbying to stop any changes which might allow the government to use the purchasing power of 43 million seniors to lower their drug bills. Unfortunately, money talks…soon we’ll see who the Senate is listening to. Seniors or Pharma?

Here is our latest News Release and position paper on the importance of price negotiation to our members and beneficiaries nationwide. Medicare Monitor also has a number of posts detailing the latest activity in the Senate.

It's hard to believe but there are still 3-4 million low income seniors not enrolled in Medicare's Part D, even though they qualify for subsidies. CMS has got to do a better job in reaching out to these folks.

We're certainly not fans of the Medicare Modernization Act (which created Part D) but there are a variety of reasonable changes which could be made by Congress to improve that law and specifically, Part D...changes which would provide seniors the benefit promised by Congress. Congressman Lloyd Doggett from Texas has offered a bill which tackles a couple of important issues.

His legislation would streamline the subsidy application process and raise the asset limits. Currently Part D penalizes many low income seniors for having limited financial assets. Seniors shouldn't be punished for saving responsibly. We think the changes proposed in this bill are good common sense approaches to fix inequities in the current Part D program. We'll join the Congressman at a news conference to endorse this legislation this afternoon.