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Medicare Drug Program News
Medicare Wastes Millions Assigning Low-Income
Seniors to Costly Drug Plans
Consumer Unions says Medicare should seek ‘Best
Value’ for 6 million seniors
 May
17, 2007 - Medicare’s practice of randomly assigning low-income
beneficiaries to prescription drug insurance plans is wasting millions
in taxpayer dollars because seniors and those with disabilities are
being placed in expensive plans when lower-cost, comparable plans are
available, Consumers Union says.
“Medicare randomly assigns 6 million low-income
Americans to prescription drug insurance plans without checking to make
sure those plans are the best value, or if they even cover the most
commonly used drugs,” said Bill Vaughan, senior policy analyst with
Consumers Union, publisher of Consumer Reports.
“If Medicare expects seniors to shop around for the
best prescription drug plans, why can’t it do the same for low-income
beneficiaries, many of whom are severely ill or disabled?” Vaughan
added.
The House Energy and Commerce Health subcommittee
on Tuesday began examining Medicare’s prescription drug program for
low-income beneficiaries. (See more on hearing below
news story, including links to testimony, Webcast.)
Vaughan said Medicare should assign low-income
beneficiaries to the three or four plans in an area that offer coverage
of the most commonly prescribed drugs, achieve high quality marks, and
offer the lowest price on those drugs. That could achieve up to $2
billion in savings over five years, he said.
“With common-sense assignment of low-income folks
to inexpensive, comprehensive drug plans, Medicare could save enough
money to make the prescription drug benefit much better,” Vaughan said.
Consumers Union has been monitoring monthly price
changes in the Medicare Part D Prescription Drug Plans since December
2005 in five major states for five commonly used prescription drugs. As
part of that work, research found that many Medicare low-income subsidy
beneficiaries are being assigned (1) to plans which cost the taxpayer
millions more than lower-cost comparable plans, and (2) to plans with
serious deficiencies in their drug coverage.
For example, in the Dearborn, Mich., area,
low-income beneficiaries were being assigned to plans that were $525
more expensive than similar plans. In the Boston area, beneficiaries
were randomly assigned to a plan that cost the taxpayer $1,406 more than
the cheaper plans in the area.
Also in Dearborn, those below 150 percent of the
federal poverty level were being randomly assigned to plans where the
annual co-payments for the beneficiary on five common drugs ranged from
$270 to $2,709.
“It defies common sense to believe that a
low-income senior who is scraping by can afford hundreds of dollars in
co-payments for their needed prescription drugs,” Vaughan said. “The
current system is simply hurting the low-income and the taxpayer.”
Vaughan also said that random assignment can be
terribly disruptive for those low-income beneficiaries on Medicaid who
turn 65 and are then randomly assigned to a Medicare drug plan.
“A person on Medicaid who turns 65 can get assigned
to a plan that is not covering her current prescriptions. With today’s
computer capabilities, Medicare ought to be able to intelligently assign
to plans where there is minimum disruption. This is especially important
for those on mental health and cancer medications. But today’s system is
not just random, it’s harmful,” Vaughan said.
House Energy and
Commerce Health Subcommittee Hearing
Hearing Testimony and Webcast
"Medicare Savings Programs and Low Income
Subsidy: Keeping Medicare's Promise for Seniors and People with
Disabilities"
Tuesday, May 15, 2007, 2:00 p.m.
2123 Rayburn House Office Building
Hearing Webcast
Connect to the Archived Video Webcast of this Hearing (100 kbps) or
Download
>>
Windows Media Player is required for Committee Webcasts.
Witness List & Prepared Testimony. Click on
presenter’s name for a pdf file of their testimony.
(pdf files)
Ms. Monica Sanchez
Deputy Director
Medicare Rights Center
110 Maryland Avenue
Washington, D.C. 20002
Ms. Lilla Sassar
Beneficiary
105 West Walnut Street, Apt 122
Syacauga, AL 35150
N. Joyce Payne, Ed.D.
Member, Board of Directors
AARP
601 E Street, NW
Washington, D.C. 20049
John Coburn, J.D.
Director
Make Medicare Work Coalition
Health & Disability Advocates
205 W. Monroe Street, Third Floor
Chicago, Illinois 60606
Gail Clarkson
Chief Executive Officer
The Medilodge Group
1387 Club Drive
Bloomfield Hills, Michigan 48302
On behalf of the American Health
Care Association (AHCA)
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