I suppose the approximately 8 million seniors who enter the Medicare Part D drug coverage donut hole every year will appreciate a check from the U.S. Government for $250 for 2010 expenses. I do wonder, however, how useful this gesture is in reality. The donut hole is valued at about $2,800 in out-of-pocket costs for drugs before insurance coverage kicks in again. And today, seniors must pay full retail prices for prescriptions once they enter this abyss.
I don’t want to be a cynic, but it reminds me a lot of the $600 rebate checks President Bush sent out that started our path toward deficit spending. Did we really need those tax cuts? Do seniors really want and need $250, or should we just fix the problem with discounted drug prices and close the coverage gap? In 2011, seniors will get access to 50% discounts on brand name drugs when they enter the donut hole, and the new healthcare reform law will completely close the donut hole by 2020. Sounds like a long way off if you’re over 65 and in need of 3-4 prescriptions to reduce pain and manage a few health conditions.
There are a few cost containment features to the new Affordable Care Act, such as going after Medicare waste, fraud and abuse. Both the HHS administration and AARP say this alone will extend the financial health of Medicare by 9 years. Not sure what happens after that period of time though. Another cost containment measure included in the law is to reduce payments to insurance companies for Medicare Advantage policies, which supposedly will save the government $150 billion over 10 years – now you have my attention. Only a small percentage of Medicare beneficiaries are in Medicare Advantage plans because most seniors fill in Medicare coverage with retired employee benefits, Medigap insurance or just use basic benefits. But savings are good.
Seniors have a lot to look forward to with Medicare reforms, such as 100% coverage of preventive care, affordable long-term care programs, and pilot programs to improve the quality of care for seniors, including in nursing homes. There is talk that some seniors will have higher premiums due to income levels, but I for one don’t see why that shouldn’t be the case. As we all come to the realization that there isn’t a money tree in Washington, D.C., some of us will have to pay more for our Medicare.
