TheRubins.com

The New Medicare Prescription Drug Discount Cards- Part II of a II Part Article

(12/30/12)- Starting January 1, 2013, beneficiaries with the doughnut-hole coverage will be responsible for paying 47.5% of the cost of brand-name drugs and 79% of the cost of generics for the "hole" costs. These proportions will narrow until 2020, when seniors will pay 25% of the cost of both brand-name and generic drugs.

(8/10/11)- The Health and Human Services Department projects that the average premium for Part D coverage under Medicare for 2012 will be about $30 a month, or just about in line with the $30.76 average premium charged this year. Medicare expects to see costs drop as a number of best-selling drugs, including Pfizers & Co.cholesterol lower drug Lipitor, lose their patent protection and become available as generic drugs.

(1/2/11)- CVS Caremark has agreed to buy Universal American's Medicare Part D unit, which focuses on the federal prescription benefits program. When the purchase is consummated CVS will have a total of 3.1 million members, up from its present 1.2 million members.

According to the latest data available from the Centers for Medicare and Medicaid Services there are over 28 million Medicare beneficiaries enrolled in Part D plan coverage.

(11/23/10)- Starting in 2011 Medicare Part D beneficiaries who fall into the "doughnut hole" will begin to pay less for their prescription drugs. It will fall to 50% for brand-name drugs in 2011 and 7% for generic drugs. The doughnut hole will be gradually eliminated under the new health-care law that was passed in 2010. Those who fell into the doughnut hole in 2010 will be receiving a $250 check from the government to help cover this expenditure.

Starting in 2011, singles with a modified adjusted gross income of more than $85,000 a year, and couples who exceed $170,000, will pay between $12 and $69.10 more in monthly premiums for Part D coverage.

(10/9/10)- Kaiser Family Foundation analysis finds that the average Medicare beneficiary will have a choice of 33 Part D stand-alone prescription drug plans in 2011, despite a 30 percent reduction in the total number of stand-alone plans available nationwide. Premiums for stand-alone prescription drug plans will rise by 10 percent, on average, to $40.72 per month in 2011 if beneficiaries stay with their 2010 plans, the analysis shows.

Under present Medicare Part D coverage, seniors pay a $310 deductible, then 25% of their drug costs until they reach $2,840 in total prescription drug expenses for the year. After that, beneficiaries must pay for drugs out-of-pocket until expenses exceed $6,440. This is the so-called " doughnut hole". After reaching that expense level a beneficiary pays 5% of the drug costs for the rest of the year.

Under the new health-care reform bill beneficiaries will receive a 50% discount on brand-name drugs, and a 7% discount on generics when they reach the "doughnut hole" level. By the year 2020 the " doughnut hole" will be entirely eliminated.

(6/2/10)- It turns out that CVS Caremark supplied incorrect prices to the Medicare prescription drug comparison Web site. The price was 4% lower than the company's SilverScript Medicare prescription drug 2009 card holders were actually charged. CVS attributed the mistake to a computer error.

The erroneous low pricing error also appeared on SilverScript's website and other commercial sites. The company said that generic drug prices were not affected by the error.

CVS notified the federal regulators at the Centers for Medicare and Medicaid Services about the error in January. CVS sent letters of apology to customers in late March. The company offered refunds to customers but only to those who specifically applied for the refund.

Judith Stein, executive director of the nonprofit Center for Medicare Advocacy, said that customers "should all get their money back" or get the advertised lower prices for the year.

(3/21/10)- Medicare Part D beneficiaries who fall into the "doughnut hole" pay the full cost of their drugs when their expense exceeds $2,830 until it reaches $6,440. Once the cost of the drugs exceeds $6,300 they pay only 5% of the additional cost for their drugs.

Under the provisions of the pending medical health-care bill Medicare Part D beneficiaries would pay only 50% of the cost of their drugs that fall within the "doughnut hole". The drug companies estimate that this provision will cost them over $80 billion in lost profit over a 10-year period of time.

Under the provisions of the pending health-care legislation, the government would provide a 25% subsidy to the Medicare Part D beneficiaries over the next few years bringing the total discount to 75%.

The legislation would also provide a one-time $250 rebate to people who pay the full cost of their drugs in the coverage gap.

Under the pending legislation the pharmaceutical industry would pay a $2.5 billion fee in 2011, $3 billion from 2012 to 2016, $3.5 billion in 2017, $4.2 billion in 2018, and $2.8 billion in 2019 and thereafter.

PhRMA, the drug industry trade group is in the midst of a multi-million dollar advertising campaign in favor of passage of the health-care reform bill..

(12/8/09)- When prescription drug coverage was extended to Medicare beneficiaries as Part D of the Medicare Modernization Act of 2003, it was feared that many employers would drop drug coverage under company health care insurance plans for their retirees.

It was estimated that the drug coverage costs about $1,900 per recipient. Actuaries calculated that if the government provided a subsidy of at least $800, employers would not stop covering retirees under their plans.

The Act created a $600 tax-free benefit, since this was the equivalent of $800 cash for employers. It is estimated that employers cover about 7 million retirees who might otherwise gone into Medicare Part D.

In the search to help reduce the cost of any new health-care reform legislation, it was estimated that as much as $5 billion could be saved over the next 10 years by eliminating this subsidy.

Is Congress being shortsighted in eliminating this subsidy, when in the long term it will cost more, since more retirees will be forced to join Medicare Part D?

(11/4/09)- The pending health-care legislation in both the Senate and the House deal with the "doughnut hole" issue that was created when Medicare Part D was created in 2006, but each of the bills offers a different solution.

The House bill, promoted by Representative Henry A. Waxman, Democrat of California, would include new rebates to cut prices for more than 6 million low-income older people who were transferred from Medicaid to the Medicare drug benefit program in 2006.

The "doughnut hole" lack of coverage means that Part D beneficiaries must pay the full cost of their drugs when spending on the drugs reaches $2,700, until it exceeds $6,100. Once the spending level exceeds the $6,100 level, the government picks up 95% of the cost of the drugs.

The House bill would authorize Medicare to negotiate drug prices directly with the drug manufacturers. The Senate Finance Committee bill specifically precludes giving Medicare that power.

The Senate Finance Committee bill provides for a 50% discount on brand name drugs for individuals who fall into the donut hole. The House version of the bill would add industry rebate money to close the gap altogether by 2019.

(6/14/09)-Between 2006 and 2009, the weighted average premium paid by beneficiaries for stand-alone Medicare Part D coverage has increased by 35 percent, from $25.93 per month in 2006 to $35.09 in 2009. Between 2008 and 2009 alone, the average enrollee paid 17 percent more in premiums – the largest one-year premium increase to date.

(12/25/08)- Beneficiaries who are thinking of joining a Medicare Part D drug-insurance plan will have to be aware of a possible "curve ball" in determining which plan they should enroll in for this coming year. Incidentally the 31st of December is the last day for most of them to select which plan they will sign up with for the coming year.

Most corporate workers are already aware of this practice when they do not order a drug on the company's "preferred" drug list. In connection with Medicare beneficiaries it is known as "reference-based pricing". This system comes into play if the beneficiary wants to buy a brand name drug when an equivalent generic drug is available.

Under the reference-based pricing system, the beneficiary will have to pay a much higher amount for choosing the brand name drug. Typically that payment will be the difference between the price of the brand name drug and the generic version of that drug, plus the co-payment.

The problem is compounded by the fact that many consumers are unable to ascertain which drugs have this system attached to it. For next year, 30 insurers will be using reference-based pricing in 63 separate drug plans, which represent nearly 10% of all Part D plans, according to the Centers for Medicare and Medicaid Services.

About 3 million people are enrolled with companies that use the reference-based system, or about 12% of all Part D participants according to Avalere Health LLC, a health care consulting firm.

(11/8/08)- In 2009, the doughnut hole will start when the beneficiary who belongs to Part D has spent a total of $2,700 up from $2,510 this year. The beneficiary must than pay the full cost (unless he/she has purchased insurance to cover the hole) until his or her own out-of-pocket cost reaches $4,350. After that, Part D will pay 95% of the cost.

(10/30/08)- An estimated 14% of the 24 million Americans enrolled in Medicare Part D fell into the "doughnut hole" in 2007, according to a study conducted by the Kaiser Family Foundation, a nonprofit health-care policy research group headquarter in Menlo Park, Calif.

According to the Kaiser study, those at greatest risk of hitting the hole were seniors taking medications for chronic conditions. The study also concluded that one in six seniors stopped taking their medications once they hit the doughnut hole got which is at the $2,510 level in 2008.

Insurers have already started their advertising campaigns for the coming enrollment period for Medicare Part D, which begins on November 15th.

(11/27/07)- Starting in January 2008 the "doughnut hole" for Medicare beneficiary Part D members begins when a patient's total drug costs have reached $2,510. This includes the amount spent by the patient for his/her out-of-pocket deductible costs and co-payments plus the portion paid by Medicare. The beneficiary must then pay 100% of the next $3,216 that is spent for his/her drugs.

Once a total of $5,726 has been spent, and only then, does the "catastrophic" portion of the Medicare Part D Plan come into effect so that the patient only has to pay 5% of the drug costs, with Medicare Part D picking up the remaining 95% of the cost.

According to Wolters Kluwer, a research consulting firm, about 4.2 million people reached the "doughnut hole" in 2007. There were a total of about 24 million people who were signed up for Medicare Part D plans in 2007

According to a chart appearing in Family Practice News, Oct. 1, 2007; Vol. 37, No. 19, the following are the percentages of all Part D prescriptions according to class of the drug: Antihypertensive-25%; Lipid regulators-7.4%; Antidepressants-5.1%; Diabetes drugs, noninsulin-5.0%; Analgesics-4.9%; antiulcerants-4.2%; Anti-infectives, broad-3.0%; Thyroid hormones-3.0%; Antithrombotics-2.9%; Seizure disorder drugs-2.5%.

With the membership enrollment period now open for Medicare Part D plan changes and re-enrollment it has been noted that the average premium for the top three plans are set to rise 27% from the 2007 levels. Many of the insurers will require the members to shoulder a larger share of the costs of the drugs that are covered under the plan.

In addition to the increase cited above, many members will see significant cutbacks on coverage of their medications during the "doughnut hole" gap. On the other hand there will be some plans in which there will be significant decreases in their premium charged.

To find out which plan may be best suited for your own particular needs the CMS will offer new tools on its PlanFinder Web page site that will include report cards that rate plans based on a range of factors. You can find those tools on the mymedicare.gov or medicare.gov Web site. Customer service, drug pricing, how easy it is to get prescriptions filled, comparison of out-of-pocket costs, and pharmacy networks in the area are a few of the topics included in the new tools.

There are about 24 million beneficiaries that are signed up for Medicare Part D drug coverage by the private insurers. UnitedHealth Group and Humana Inc hold about 44% of this market between the two of them.

Nearly one person in five who are enrolled in a plan will see increases of $10 or more a month in their 2008 plan premiums, according to the Kaiser Family Foundation. About 25% of all enrollees who have stayed with the same plan since 2006 will face a minimum 50% increase in their original premium cost.

An example of one of the plans that will show a decrease in its premium if the one offered by CVS Caremark Corp., which will be 24% lower in 2008, or $20.71 a month.

Many of the plans will limit the number of generic drugs they cover in their formulary that provide some benefits during the doughnut hole coverage gap. This gap begins after beneficiaries and their plans pay $2,150 in drug costs, at which point plans are not required to pay benefits until the enrollee has spent $4,050 out of pocket.

In 2007, most plans that had gap coverage included all generic drugs in their benefit, In 2008 however, about half of the plans will reduce their benefits and cover only some generics.

The average premium for stand-alone plans with gap coverage will be more than twice that of the basic plans.

To see Part I "The New Medicare Prescription Drug Discount Cards"- Part I

FOR AN INFORMATIVE AND PERSONAL ARTICLE ON PRACTICAL SUGGESTIONS WHEN SELECTING A NURSING HOME SEE OUR ARTICLE "How to Select a Nursing Home

by Allan Rubin
updated December 30, 2012

http://www.therubins.com

To e-mail: hrubin12@nyc.rr.com or rubin@brainlink.com

Return to Home

TheRubins.com