Cat's Blog – A Blog About Nothing

Actually, the gift to seniors was a ruse for providing a handout to the pharmaceutical and health insurance industries.  I am referring to the mandated drug insurance program known as Medicare Part D.

This is my first year as a recipient of Medicare.  I received this explanation of benefits from Wellcare, my provider for prescription medication.

Drug payment stages:

Stage 1 – Yearly Deductible – Because there is no deductible for the plan, this payment stage does not apply to you.

Stage 2 – Initial Coverage – You begin in this payment stage when you fill your first prescription of the year.  During this stage, the plan pays its share of the cost of your drugs and you pay your share of the cost.  You generally stay in this stage until the amount of your year-to-date “total drug costs” reaches $2,850.00.  As of 01/31/2014, your year-to-date “total drug costs” was $xx.xx.

What happens next?  Once you have an additional $2,8xx.xx in “total drug costs”, you move to the next payment stage.

Stage 3 – Coverage Gap – During this payment stage, you receive a discount on brand name drugs and you pay 72% of the costs of generic drugs.  You generally stay in this stage until the amount of your year-to-date “out-of-pocket costs” reaches $4,550.00.  When this happens, you move to payment stage 4, Catastrophic Coverage.

Stage 4 – Catastrophic Coverage – During this payment stage, the plan pays most of the cost for your covered drugs.  You generally stay in this stage for the rest of the calendar year (through December 31, 2014)

Some things that I would like to point out.  Notice that there is no percentage defined for the discount on brand name drugs in Stage 3. If one is fortunate enough to be prescribed generic drugs which are relatively cheap, then one would receive a 72% discount on those drugs.   Also, the amount of “out-of-pocket costs” is high, $4,550.00.   In 2012, the maximum monthly payout for Social Security was $2,346.00.  This payout was based on the maximum amount taxed which is $110,100 in 2012.  There has been a slight increase since 2012, but not much.  According to the Social Security administration, the average monthly benefit is about $1,300.00 (2013).  This benefit must cover the cost of food, shelter, clothing, medication, and all other expenses.  Do the math.  Most seniors will not make it out of Stage 3, the stage known as the “donut hole”.  Once in the “donut hole”, do seniors not take their medication as prescribed because they can’t afford this added expense?

Stage 1 and Stage 2 are nothing more than teasers as Stage 3 offers little in the way of benefits for non-generic drugs.  There is no pleasure in a donut “hole” because there is nothing there to bring pleasure.  Same goes for Medicare Part D.

There will be relief from this pharmaceutical giveaway as the Affordable Care Act (Obamacare) eliminates the donut hole by year 2020.

The original Medicare Part D bill had seniors paying 100% of the cost of their medication during Stage 3.   This is what the Republicans gave to seniors, a forced insurance policy that cover’s very little.  The Democrats and President Obama have put an end to this giveaway to the pharmaceutical and the health insurance industries.

One other note:  Unlike Walmart and other big retailers, in the original Medicare Part D bill, the government was not permitted to negotiate the price of drugs.