D Is for Dizzying

(originally published by Metroland, Volume 30 - Number 49 - December 6, 2007)

It’s the Medicare Part D shopping season, and many senior citizens are frustrated by a prescription-drug program that some say was designed to confuse and exploit them

“Good afternoon, Crestwood Pharmacy,” said Jagat Patel as he answered a phone that never seemed to stop ringing. Christmas music played from a radio atop a small refrigerator stocked with pharmaceuticals. This time of year is a busy one for Patel, owner of the Albany pharmacy. Open enrollment for the Medicare Part D prescription-drug-benefit program began on Nov. 15 and runs until Dec. 31. Patel told Metroland that his store has been receiving calls from dozens of customers who are seeking more than just his assistance filling their prescriptions—they are asking for his help in selecting the right prescription-drug plan.

Part D, which went into effect Jan. 1, 2006, offers its recipients a dizzying array of 50-plus prescription-drug plans provided by private companies. Each plan may have two or three options sporting different lists of covered drugs and different out-of-pocket costs. This proves confusing to many recipients, mostly senior citizens, who have turned to Patel and other pharmacists for help with deciphering which plans might work best for them—one reason why the phone at Crestwood Pharmacy is rarely silent.

“It’s a challenge to figure out which plan is the best one for a particular person, especially nowadays with these new drugs, new generics coming out,” said Patel. “It all should be the same anywhere they go. Now you have discrepancies: Why should one plan be better than the other as far as coverage? Why should one company charge higher premiums than the other?”
It makes no sense, many critics agree, that Medicare Part D offers so many choices. At least, it makes no sense if Part D had been designed to help the recipients. As Michael Burgess, director of New York State Office for the Aging argued, this is not the case.

“This Medicare Part D was written for the benefit of those who wanted to sell [drugs], rather than for those that have to buy,” said Burgess. “That’s why it’s so difficult for the senior; it wasn’t written for them.” It was written, he continued, to create a free market for the drug companies. “That’s why we have 55 plans.”

The New York State Office for the Aging operates a toll-free hotline to assist New Yorkers with any health-insurance questions they may have. Call volume, Burgess said, has tripled since the Medicare open-enrollment period began. The agency was handling 60 to 80 calls a day; now that number has skyrocketed to 200 to 300 calls, even hitting the 400 mark a few days this year.
Even if a senior is satisfied with their drug coverage, the premiums are increasing for 2008. The Center for Economic and Policy Research issued a report last week that highlighted the increase in premiums for Part D plans across the nation. New York ranked fourth in the country with an average 22.35-percent increase.

“We call it ‘bait-and-inflate,’ ” said Burgess. “They got the people in, and now they’re raising the premium.”

As an example, the Humana Standard plan started out with a $4.10 monthly premium in 2006.
Now in 2008, clients can expect the same plan to cost $29.60 a month.

“Humana started out at a low premium because they wanted to get a lot people to join their Medicare Part D plan,” said Burgess. After securing that customer base, he said, “We’re seeing what’s happened.”

Further, Part D plans have developed a unique phenomenon, known as “the doughnut hole,” in which recipients can get stuck with unwieldy drug expenses. Under Part D plans, drug coverage extends to $2,500. After that, recipients are responsible for the next $3,000 of expenses before they can qualify for “catastrophic coverage” and their drug benefits kick back in. Some plans have a smaller gap in coverage, but the trade-off is a higher monthly premium.

“As confusing as it is to you and I, imagine the seniors that are all of the sudden put into a situation where they have to make a decision which they know nothing about,” Patel said. He said that he has seen the effects of stress on the health on his clientele manifested in anxiety and high blood pressure. “I don’t think as a health-care system we’re moving in the right direction. We’re actually moving in the opposite direction from where we want to go.”

Burgess said that he would support a standardization of plans, such as EPIC, the drug program offered to New York’s lowest-income seniors. He wrote a letter earlier this year to the New York congressional delegation calling for standardization of drug plans, which directed attention to some dubious sales and marketing tactics employed by some of the private companies selling Part D drug plans, but he doesn’t expect any changes to the program until the national political climate has shifted. Even if a proposal passes Congress, he said, that legislation would likely just be vetoed by President George Bush.

“We’re not satisfied with the notion that because we have to have choice and free enterprise that you can confuse people to the point of frustration,” said Burgess, “It’s like walking into a supermarket and having 55 choices for toothpaste, you finally just take one and leave.”

Approximately 133,000 Medicare beneficiaries live in Albany, Rensselaer, Schenectady and Saratoga counties combined.