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Medicare Drug Program News
Medicare Consumer Groups, Legislators Call for
Medicare-Operated Drug Plan
Advocates release report citing cost, instability,
coverage gaps, fraud in Part D
 Oct. 25, 2007 – Citing excessive costs, gaps in
coverage, instability and fraud in a new report, two consumer groups
this week called on Congress to give senior citizens and others covered
by Medicare the option of a drug program through the Original Medicare
program. Consumers Union and the Medicare Rights Center say this would
eliminate the consumer exploitation that plagues the drug program run by
private insurance companies.
“Seniors and taxpayers deserve the choice of a
Medicare-administered drug plan that covers the safest and most
effective medicines at the best possible price,” said Bill Vaughan,
senior policy analyst for Consumers Union, publisher of Consumer
Reports.
“We know that the private insurance companies
aren’t getting the best deals for consumers on prescription drugs. Let’s
let Medicare – which Americans know, trust and count on for their health
care coverage – offer prescription drug coverage, too.”
“Day after day we see men and women with Medicare
unable to get the medicine they need because of the confusing and
exploitative marketplace that dominates the for-profit drug offerings
from private insurance companies,” said Robert M. Hayes, president of
the Medicare Rights Center, a national consumer service organization.
“It’s time for Congress to offer a
Medicare-administered drug benefit option that would benefit consumers’
health and pocketbooks and bring down the program’s cost for taxpayers.”
In
“The Best Medicine: A Drug Coverage Option Under Original Medicare,”
Consumers Union and the Medicare Rights Center cite numerous independent
research studies that find the current Medicare Part D drug benefit
available only through private plans is unnecessarily costly, has
coverage gaps, is unstable and leaves consumers vulnerable to marketing
fraud because of the number of plans offering such divergent benefit
packages.
The consumer groups report that a
Medicare-administered drug benefit can lower drug prices and reduce the
overall cost of the Medicare coverage program by harnessing the
purchasing power of the 43 million Americans with Medicare to negotiate
prices.
It costs private insurers 9.8 percent of the drug
benefit’s total cost to administer the program, yet it costs Medicare
only 1.7 percent of the total costs to administer hospital and
outpatient coverage.
Prices for the Veterans Administration’s most
commonly prescribed drugs are half as much, or less, than the prices
offered through private drug insurance plans.
Consumers Union and the Medicare Rights Center
recommend using a national evidence-based formulary for a
Medicare-administered drug plan option that would help guide doctors to
prescribe in a way that improves health care outcomes, reduces costs and
facilitates a fair and efficient drug appeals system.
The Veteran Administration’s formulary is broader
than the drugs covered under Medicare private drug plans and also covers
non-formulary drugs prescribed according to evidence-based guidelines.
Legislation Introduced on Tuesday
Legislation to give consumers a Medicare-run drug
option was introduced Tuesday by Senator Richard Durbin (D-IL) and
Representatives Marion Berry (D-AR) and Jan Schakowsky (D-IL).
The Medicare Prescription Drug Savings and Choice
Act would utilize price negotiation and the best evidence about the
safety and effectiveness of drugs to give older adults and people with
disabilities the choice of a stable, consistent and affordable drug
coverage plan.
The consumer groups also report that the current,
private drug plan appeals system is dysfunctional, with a lack of
information from the private plans about the right to appeal, lengthy
delays in the process and the need to use an experienced advocate to
navigate the process.
According to the Centers for Medicare & Medicaid
Services, private drug plan denials are overturned by the independent
review entity in over half of the cases concerning utilization
management (prior authorization, step therapy and quantity limits).
The instability of a Medicare drug benefit
available only through private insurers means fluctuating plan premiums,
drug prices, formularies and utilization management restrictions for
Americans with Medicare, most of whom are locked into their plans for
the year, the report found.
Each year, the poorest, most vulnerable people with
Medicare who get “extra help,” the federal subsidy to help pay drug plan
costs, are forced out of their plans when premiums rise. For 2008, as
many as 1.6 million people will be reassigned to a different drug plan
due to increased premiums.
“The Best Medicine: A Drug Coverage Option Under
Original Medicare,” is available online at
http://www.medicarerights.org/TheBestMedicine.pdf or at
www.ConsumersUnion.org.
Editor’s Notes
How these organizations identify themselves:
Consumers Union (CU), publisher of Consumer
Reports, is an independent, nonprofit testing and information
organization serving only the consumer. We are a comprehensive source of
unbiased advice about products and services, personal finance, health,
nutrition, and other consumer concerns. Since 1936, our mission has been
to test products, inform the public and protect consumers.
Medicare Rights Center (MRC) is the largest
independent source of health care information and assistance in the
United States for people with Medicare. Founded in 1989, MRC helps older
adults and people with disabilities get good, affordable health care.
Founded in 1989, MRC helps older adults and people with disabilities get
high-quality, affordable health care.
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