Too many questions with Medicare deal

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July 1, 2009

Anonymous The Tribune-Democrat Wed Jul 01, 2009, 01:34 PM EDT

The federal government and drug manufacturers reached an agreement recently that could help close the infamous “doughnut hole” in Medicare benefits.

But will the plan bring real help for seniors on Medicare Part D? And does this effort signal a movement toward sweeping changes in the nation’s health-care system?

The pharmaceutical industry met with President Obama and agreed to spend $80 billion over 10 years to provide expanded drug benefits for seniors on Medicare.

The “doughnut hole” has been a point of controversy for years. Here’s how it works, according to Medicare information sources:

* Seniors on the Medicare Part D program pay the first $295 of their prescription drug costs.

* Then, Medicare pays 75 percent on costs up to $2,700, and also covers most of the cost after a person reaches $4,350 in out-of-pocket expenses.

* Between that $2,700 figure and the $4,350 out-of-pocket level, the individual pays 100 percent of the drug costs – the so-called “doughnut hole” of coverage.

“The existence of this gap in coverage has been a continuing injustice that has placed a great burden on many seniors,” Obama said after reaching the accord with the drug companies.

“This deal will provide significant relief from that burden for millions of American seniors.”

Here’s the fine print on this good news for seniors:

* Drug companies agreed to pay half the cost of brand-name medicines for seniors in the “doughnut hole” situation – not completely close the gap for all Medicare recipients.

* The deal does not include generic medicines, which generally cost less than brand names.

* Democrats in Washington are still negotiating with the pharmaceutical industry to completely close the coverage gap – which would cost more than $60 billion.

* Many seniors would be exempt from the new plan – those already eligible for low-income subsidies for drugs, and those who earn more than $85,000 a year individually or $170,000 for couples.

House Democratic leaders hope to vote on the plan before Congress’ August recess.

We hope more work is done on the plan before that happens.

The possibility is that some seniors on Medicare Part D would see some benefit from this plan.

The certainty is that drug companies supported the plan because seniors would be forced to buy their products.

The bigger question remains unanswered: How does the government plan to fulfill its pledge to cover all of the 50 million Americans who are uninsured, and do so without reaching deeper into the pockets of taxpayers?

Clearly, much work remains before taxpayers and health-care consumers can begin dancing in the streets.

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