Medicare Part D - The Drug Plan that Keeps on Failing

It turns out that not only is Medicare Part D a nightmare for those who are trying to select which of the various plans to choose -- it's also a disaster for those who used to have coverage under Medicaid. The poor were automatically transferred from Medicaid coverage to Medicare, without the ability to choose among plans. Now, they are not able to get any drugs in many places, and the states are having to bail them out. We learn from the LA Times:

Critics said the program, which Bush has touted as the most significant advance in Medicare in 40 years, was fast becoming a public health emergency. California officials said that as many as one-fifth of the 1 million elderly, poor or disabled state residents who were switched into the federal program on Jan. 1 could be wrongly denied their medications because of flaws in the program.

In Illinois, Gov. Rod Blagojevich, a Democrat, took action similar to Schwarzenegger's, ordering state funds to be used to provide emergency drug coverage for the elderly. Arkansas Gov. Mike Huckabee, a leading figure among Republican governors on health policy issues, took a similar step Wednesday. Nine states, including California, have stepped in to fill the gaps in the federal program.

Bush has staked considerable political capital on the Medicare program, and Democrats were quick to seize on its problems. Sen. Hillary Rodham Clinton (D-N.Y.) criticized the program at a news conference as "a bad policy poorly implemented."

It also turns out to be almost impossible to compare coverage. I've been trying to assist my mother-in-law in selecting a plan. Some companies express the co-pay as a percentage of the cost of the drug. Others express it as a dollar amount. When it's a dollar amount, the savings depend upon the order in which you buy your drugs. For example, let's take a plan with a $20 co-pay for drugs up to $2,250. (Nothing is covered between $2,250 and $5,100, which is the so-called doughnut, and all plans are about the same for covered drugs over that).

Suppose you have several prescriptions that cost $18.00 a pop. You also have several prescriptions that cost $150.00 per pop. And, a few that cost about $50.00 per pop.

Now, if you buy all your $18.00 prescriptions first and they add up to the $2,250 before you have purchased any of the higher priced drugs, the drug plan will pay you nothing because the cost of the drug is less than the co-pay. On the other hand, if you buy all your $150 drugs first to exhaust the $2,250, the drug plan will save you $1,950. (15 prescriptions at $150 less 15 prescriptions at $20 co-pay). If you buy your $50 drugs first, you will save $1,350 (45 subscriptions times a savings of $30 each).

Of course, you can't dictate when you buy which drugs. That's determined by when your prescriptions run out. The carriers don't let you buy in advance. So, unless you know the exact timing of your future purchases, there's no way to evaluate the plans.